Unexplained Cash Deposits from Dairy Business: ITAT Sets Aside Ex-Parte Order [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the ex-parte order on unexplained cash deposits from the dairy business and remanded the case for fresh adjudication.

Vinodbhai Dahyabhai Patel,appellant-assessee,was a dairy products business owner. For the Assessment Year 2017-18, he filed his return on 28-03-2018, reporting an income of Rs. 7,99,660/-. The return was selected for scrutiny after cash deposits totaling Rs. 11,17,55,600/- were made in his Bank of Baroda account, including Rs. 1,39,14,120/- during the demonetization period.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

During the assessment, the assessee explained the cash deposits from dairy product sales. However, the Assessing Officer(AO) found Rs. 42,97,253/- to be unexplained and added it as unexplained income under Section 69A, demanding tax on it.

The assessee then appealed to the Commissioner of Income Tax(Appeals)[CIT(A)], who gave six hearing dates between 09-02-2021 and 12-03-2024. The assessee only asked for one adjournment and failed to submit any documents or represent the case on the other five occasions. As a result, the CIT(A) dismissed the appeal for non-prosecution.

Aggrieved by the order the assessee appealed before the tribunal.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The Revenue counsel, stated that the assessee had failed to provide any details before the AO, and thus, the appeal was liable to be dismissed.

The two member bench comprising T.R.Senthil Kumar(Judicial Member) and Narendra Prasad Sinha(Accountant Member) reviewed the case and noted the assessee counsel’s assurance that the assessee would submit the required details and evidence to the CIT(A).

As a result, the ex-parte order was set aside, and a cost of Rs. 5,000/- was imposed, payable to the Income Tax Department within 10 days. The case was remanded to the CIT(A) to hear the appeal on its merits, ensuring the assessee receives a fair opportunity to present their case.

In short,the appeal filed by the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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