The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT), allowed deletion of addition on unexplained cash deposits as there was no due verification of records by Assessing Officer (AO).
On the basis of AIR information that the appellant, Ashesh Sidharth Agarwalhas deposited cash amounting to Rs.5 crores in bank accounts, a notice under Section 143(2) of the Income Tax Act followed by notice under Section 142(1) of the Act alongwith questionnaire was served upon the assessee regarding certain unexplained cash deposits.
No document has been filed by the assessee in reply to the AIR. In the absence of any detail submitted by the assessee neither capital gain earned by the assessee could be worked out. Having no other alternative, the addition was made by the AO on the basis of the figures furnished by the department as per AIR/CIB, which was, in turn, deleted by the First Appellate Authority. Hence, the instant appeal has been preferred.
The AO in the remand report objected mainly on four counts: (i) The appellant has not maintained sales/purchase registers; (ii) The appellant has not purchase/sales invoice; (iii) The appellant had no transportation details/delivery challan; (iv) The appellant did not file suits instituted against him by the creditors.
The Counsel for the assessee submitted that the details were furnished before the AO during the course of assessment proceedings and since the data being voluminous in nature, the same has not been placed before the CIT(A). Enough evidence including bank account statement, bank book and cash book of the appellant’s business were duly furnished before the authorities below.
It is clearly evident from the reply of the remand reportsubmitted by the assessee that these documents had not been duly verified by the AO. On the other hand, the same has not been placed before the First Appellate Authority because of the data being voluminous in nature. Therefore, fact remained that neither these documents were verified by the AO nor by the CIT(A).
A Bench consisting of Pradip M Jagtap, Vice President and Madhumita Roy, Judicial Member observed that “Merely because the books of accounts have been subjected to tax audit under Section 44AB of the Act and the Auditor had certified the books of accounts to be in order, the contention made by the assessee cannot be stated to be full proof. In that view of the matter, we do not find the impugned order deleting addition made by the AO to be justified.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
