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The Income Tax Officer, Ward 1 (3) , Nashik Versus Shri Vijay Pundlik Kadam

2015 (10) TMI 2249 - ITAT PUNE

Unaccounted cash deposits - peak cash deposits in the said Savings Bank A/c - CIT(A) deleted the addition relying upon the additional evidence - Held that:- There was total non-compliance of the assessee before the Assessing Officer. The assessee failed to appear on any of the dates of hearing, except on one date to seek adjournment of the hearing. The Assessing Officer had issued show cause notice to the assessee, which was not replied to by the assessee during the course of assessment proceedi .....

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proceeded to decide the issue after examining the relevant facts. The facts as brought out by the assessee before the CIT(A) were that he was running a pathology lab and was also looking after the land of his family. The case of the assessee before the CIT(A) that Axis bank was used for deposits and withdrawals of amount in respect of agricultural activity of the family. A summary of receipts and payments in the said bank account have been filed before the CIT(A), which have been accepted in to .....

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enquiries, but then the enquiries should be complete and the explanation of the assessee should not be accepted on its face. On perusal of the order of CIT(A) reflects that no proper enquiry has been made by the CIT(A) and in the absence of the same and in view of violation of Rule 46A of the Rules, the matter needs to be adjudicated after following the procedure as envisaged in the Statute. However, since no information was filed before the Assessing Officer and in the absence of the assessee .....

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Department : Shri Sanjay Pungalia, ACIT ORDER PER SUSHMA CHOWLA, JM : The captioned appeal filed by the Revenue is against the order of CIT(A)-I, Nashik, dated 27.05.2013 relating to assessment year 2009-10 against order passed under section 144 of the Income Tax Act, 1961. The assessee has also filed Cross Objection against the appeal of the Revenue. 2. Both the appeal of the Revenue and Cross Objection filed by the assessee relating to the same assessee were heard together and are being dispos .....

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. 3) Whether on the facts and in the circumstances of the case, the Ld. CIT(A)-I, Nashik was justified in relying the additional evidences produced by the assessee at the time of appellate proceedings which is violation of Rule 46A of the IT. Rules which had not forwarded to the A.O. for actual verification. 4) The appellant prays that the order of the Ld. CIT(A)-I, Nashik may please Be cancelled and the order of the Assessing Officer may please be restored. 5) The appellant prays leave to add, .....

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deletion of addition of ₹ 17,04,000/-. 6. The preliminary issue raised by the Revenue in this regard is whether the CIT(A) was justified on relying upon the additional evidence produced by the assessee at the time of appellate proceedings, which was in violation of Rule 46A of Income Tax Rules , 1962 (Rules) since the same was not forwarded to the Assessing Officer for verification. 7. Briefly, in the facts of the present case, the assessee had furnished the return of income declaring tota .....

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, there was no compliance. Thereafter, the Assessing Officer issued letter to the assessee dated 02.12.2011 that in the absence of information being filed by the assessee, assessment would be completed under section 144 of the Act. The assessee failed to appear and hence, the Assessing Officer completed the assessment under section 144 of the Act. As per the information available on record, the assessee had deposited cash totaling ₹ 17,04,000/- in his savings account with Axis Bank. The as .....

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to time. The plea of the assessee before the CIT(A) was that he was not given proper opportunity of hearing before finalization of assessment. The CIT(A) vide para 8.3 notes that the assessee had filed submissions vide letter dated 26.12.2011, in which he had replied to the questionnaire under section 142(1) of the Act along with which, the assessee had enclosed the copy of savings bank account. The Assessing Officer had passed the assessment order on 23.12.2011. The CIT(A) deliberated on the is .....

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thereof, the CIT(A) thought it fit to enquire into the impugned additions. The claim of the assessee was accepted on the basis of summary of receipts and payments filed by the assessee. The CIT(A) noted that the peak of the cash deposit and cash withdrawals in the savings account was ₹ 5,78,100/-. The CIT(A) further notes the agricultural land owned by the family of the assessee and after giving credit of ₹ 3,93,750/-, made addition of ₹ 1,84,350/- as unexplained deposit in Ax .....

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. The Revenue is also aggrieved by the order of CIT(A) in not allowing an opportunity of verification to the Assessing Officer as envisaged under Rule 46A of the Rules in relation to admission of additional evidence. The learned Departmental Representative for the Revenue stressed that no such explanation was filed before the Assessing Officer by the assessee and the enquiries, if any, made by the CIT(A) were insufficient. 11. The learned Authorized Representative for the assessee in reply, poin .....

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ct any details furnished in respect of cash deposit in savings account with Axis bank. 12. We have heard the rival contentions and perused the record. The Revenue in the present appeal is aggrieved by the order of CIT(A) in admitting additional evidence under Rule 46A of the Rules without following the provisions of the said Rule. Rule 46A of the IT Rules provide as under : 46A. (1) The appellant shall not be entitled to produce before the Deputy Commissioner (Appeals) [or, as the case may be, t .....

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ant was prevented by sufficient cause from producing before the [Assessing Officer] any evidence which is relevant to any ground of appeal ; or (d) where the [Assessing Officer] has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. (2) No evidence shall be admitted under sub-rule (1) unless the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)] records in writing the reason .....

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in this rule shall affect the power of the Deputy Commissioner (Appeals) [or, as the case may be, the Commissioner (Appeals)] to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 27 .....

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cient cause from producing the evidence which he was called upon to produce by the Assessing Officer ; or (c) where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal ; or (d) where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. 14. As per the first exception where any evidence was so .....

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ces has to establish the reasonableness of his non-production of the evidence called upon by the AO during the assessment proceedings and in case he is not able to justify his non-production of the relevant evidence called upon by the AO during the assessment proceedings, the same cannot be admitted as additional evidence. Under clause (c) to Rule 46A(1), in all such cases where the assessee was prevented by reasonable cause from producing any evidence which is relevant to establish the case of .....

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al. 15. Under sub-rule (2) to rule 46A, it is further provided that no evidence shall be admitted under sub-rule (1) by the CIT(Appeals) unless he records reasons in writing for its admission. Under sub-rule 3 to rule 46A, it is further provided that the additional evidence before being admitted, would be confronted to the AO, who inturn would examine the evidence or documents or cross-examine the witness produced by the appellant. Further, the said sub-rule also provides that the AO can produce .....

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er. The assessee failed to appear on any of the dates of hearing, except on one date to seek adjournment of the hearing. The Assessing Officer had issued show cause notice to the assessee, which was not replied to by the assessee during the course of assessment proceedings. The Assessing Officer had AIR information of cash deposit of ₹ 17,04,000/- in savings account of assessee with Axis Bank. In the absence of any explanation received from the assessee, the said sum was added as income of .....

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