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Judgment
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :
This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-NFAC, Delhi [‘CIT(A)’ in short] dated 19.06.2025 arising from the assessment order dated 20.12.2019 passed by the Assessing Officer, New Delhi under Section 143(3) of the Income Tax Act, 1961 (‘the Act’) concerning Assessment Year (A.Y.) 2017-18.
The grounds raised by the assessee are as under :
“1)That the Hon'ble Commissioner of Income Tax (Appeals) has erred in the law as much as on the facts of the case in dismissing the appeal of the appellant and sustaining the addition of Rs. 1,10,43,000/- u/sec. 68 read with section 115BBE of the Income Tax Act, 1961 without providing an adequate opportunity of being heard and without considering the request of adjournment filed by the appellant and thus, the appellate order passed by the Hon'ble Commissioner of Income Tax (Appeals) is liable to be quashed being in violation of principles of natural justice.
2)That the Hon'ble Commissioner of Income Tax (Appeals) has erred in the law as much as on the facts of the case in sustaining the additions of Rs. 1,10,43,000/- u/sec. 68 of the Income Tax Act, 1961 read with section 115BBE of the said Act made by the learned Assessing Officer with regards to the cash sales of Dry and Wet dates made by the appellant for the period from 01.04.2016 till 8th Nov., 2016 and the cash in hand available as on 8th Nov., 2016 and deposited in the bank account during the demonetisation period by treating the same as alleged to be unexplained cash credits in the book of the appellant.
3)That the Hon'ble Commissioner of Income Tax (Appeals) while sustaining the aforesaid addition failed to appreciate the facts that out of the cash deposit of Rs. 1,10,43,000/-, Rs. 25,40,744/-represents the opening cash balance as on 01.04.2016 of which no addition could be made by the learned Assessing Officer and that the appellant in support of the cash sale of Rs. 1,36,17,599/- till 8th Nov., 2016 had filed various documents ie. cash book, customer daily challans paid at the time of imports of dates, copy of Audited Balance Sheet and Profit & Loss Account wherein the purchase and sales have been duly reflected, VAT returns etc. which have not been any cognizance and arbitrarily rejected by the learned Assessing Officer without carrying out any independent enquiry or investigation in this regards.
4)That the Hon'ble Commissioner of Income Tax (Appeals) while sustaining the addition made by the learned Assessing Officer has failed to appreciate the fact that the appellant is in the business of import and trading of dates for the past many years wherein his sale or purchase have been accepted in past and once it is an accepted fact that the appellant if engaged in the business of trading of dates, the learned Assessing Officer cannot dictate the assessee as to how he should carry on his business ie. whether to make sale in cash or credit etc or to take decisions as a prudent businessman as per the circumstances prevailing in the market
5)That the Hon'ble Commissioner of Income Tax (Appeals) while sustaining the aforesaid addition of Rs. 1,10,43,000/- have further failed to appreciate the fact that though the addition of Rs. 1,10,43,000/- was made by the learned Assessing Officer by treating the cash sales as unexplained cash credits in the books but at the same time, he has accepted the books of accounts duly audited by independent Auditor, the opening cash balance, trading results, sale and closing stock etc. which is evident from the fact that the additions u/sec. 68 of the Act have been made only on the returned income which includes the aforesaid sales of Rs.3.32 crores and thus the cash deposited in the bank account against cash sales could not be treated as undisclosed income u/sec. 68 without bringing any credible evidence in support of such allegation.
6)That the Hon'ble Commissioner of Income Tax (Appeals) has erred in law as much as on the facts of the case in sustaining the additions of Rs. 1,10,43,000/- made by the learned Assessing Officer u/sec. 68 of the Act without appreciating the facts that the addition u/sec. 68 of the Act has resulted into double taxation of the same amount once in the form of cash sales already included in the business income as declared by the appellant and again by way of unexplained cash credit on total deposit arising from cash sales u/sec. 68 at higher rate specified u/sec. 115BBE of the Act.
7)That the Hon'ble Commissioner of Income Tax (Appeals) further failed to appreciate the fact that the learned Assessing Officer did not find any defect in the books of account produced before him and also not reached the conclusive evidence that the books of account are either incorrect or incomplete.
8)That the Hon'ble Commissioner of Income Tax (Appeals) while sustaining the aforesaid addition made by the learned Assessing Officer have failed to appreciate the facts that the learned Assessing Officer has applied the provisions of Section 115BBE of the Act in the facts and circumstances of the case of Appellant and determining the tax-liability as per the aforesaid Section without appreciating that provisions of Section 68 were not applicable in the facts of the case, the provisions of Section 115BBE of the Act could also not be invoked.
9)That the appellant assails his right to file additional ground(s) of appeal, if required, and add or amend /delete any ground of appeal at the time of hearing of the appeal.
It is, therefore, kindly prayed that the aforesaid unwarranted addition of Rs. 1,10,43,000/-made by the learned Assessing Officer and sustained by the Hon'ble Commissioner of Income Tax (Appeals) may kindly be deleted after providing an opportunity of being heard to the appellant.”
Brief facts of the case are that assessee is engaged in the business of trading. Assessee e-filed its return of income for A.Y. 2017-18 on 02.11.2017 declaring income of Rs.3,25,500/-. The case was selected for scrutiny under CASS with one reason “Cash deposit during demonetization period” and statutory notice u/s 143(2) on 14.08.2018, notice u/s 142(1) on 23.07.2019 was issued. In response to the details on ITBA by the assessee placed on record. On perusal of ITS data of the assessee, it was revealed that assessee had deposited Rs.1,10,43,000/- in cash during the demonetization period. Vide notice u/s 142(1), assessee asked to furnish detail of cash deposited in the bank accounts. The assessee had not furnished complete details. The assessee explanation was that the cash deposited by assessee, was made from his cash sale. The AO being not satisfied, treated the cash deposits during the demonetization period as unexplained cash credit u/s 68 r.w.s 115BBE of the Act and added the same to the total income of the assessee.
Aggrieved, assessee is before us.
At the outset, learned Counsel of the assessee stated that the CIT(A) has passed an ex-parte order and prayed for setting aside the order to the file of CIT(A) for fresh adjudication.
Per contra, learned DR did not raise any serious objection and relied upon the order of authorities below.
We have heard the rival submissions and perused the material available on record. We find that the CIT(A) had given opportunities to the assessee and in absence of any response from the assessee, the CIT(A) passed an ex-parte order. We are of the considered view that the CIT(A) should have given reasonable opportunities to the assessee to represent the case and therefore, we are of the view that the issue of cash deposit be set aside to the file of the CIT(A) for fresh adjudication. The CIT(A) is directed to accord three effective opportunities to the assessee and assessee is likewise directed to avail the opportunities and submit documents/evidence as required by the CIT(A). The appeal of the assessee is decided in aforesaid terms.
In the result, appeal of the assessee is allowed for statistical purposes.