TMI Blog2021 (11) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in the case of Bhai Chand N. Gandhi [ 1982 (2) TMI 28 - BOMBAY HIGH COURT] - Therefore, provisions of section 68 of the Act cannot be invoked on various deposits/credit found recorded in the bank account of the assessee in absence of books of the assessee maintained for that previous year. The assessee submitted confirmation from the purchaser of paddy before the authorities below and this was the best possible evidence under his command to establish that the impugned amount was actually sale proceeds of paddy, which was purchased from open market/farmers and sold the same without maintaining any books of account to M/s. Rameswar Agro Industries Pvt. Ltd. Even as a man of ordinary prudent, one cannot disagree with the contention of the assessee that even if he is a director in the purchase company i.e. M/s. Rameswar Agro Industries Pvt. Ltd., he cannot be refrained from making sale of paddy to the company in which he is a director. Cautious about the provisions of section 40A(2) (3) of the Act, wherein, the department has right to examine the expenses and payments made to related parties by the related parties but it is not the allegation of the AO in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its are very well explained from the sale of agricultural products being deposited in the bank account. 2. Addition of ₹ 1,15,028/-. For that the AO has failed to taking into consideration the evidences in support of claim of rebate u/s. 80C of the IT Act even though the appellant has submitted the same, thereby the addition ought to be deleted. 3. At the time of hearing, Ld. A.R. of the assessee did not press Ground No. 1(a) and Ground No. 2 of appeal. Therefore, these grounds are dismissed as not pressed. 4. Apropos Ground Nos. 1(b) (c) of appeal, facts are that during the course of assessment proceedings, the Assessing Officer noticed that the assessee had made cash deposits as under: i) Axis Bank A/c. No.551010100067713 (wrongly taken by AO -919937020925) ₹ 27,49,000/- ii) Bank of Baroda A/c No.27650100002950 ₹ 1,53,000/- iii) Yes Bank A/.c No.009390100005513 ₹ 50,000/- iv) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view that we should quash the order passed by the Appellate Tribunal and direct the Appellate Tribunal to hear the appeal filed by the assessee afresh and decide it on its own merits. 6. I find that although the Ld. CIT(A) in the impugned order has not discussed anything regarding the issue and dismissed the appeal ex parte, but the issue can be decided after hearing both the sides and materials available on record in view of the judgment of Hon'ble Gujarat High Court in the case of Shree Nirman Foundation Charitable Trust (supra). Ld. D.R. did not object to the hearing of appeal on merits. Accordingly, I proceed to decide the appeal on merits after hearing both the parties. 7. At the outset, Ld. A.R. of the assessee submitted that the Assessing Officer has invoked wrong section i.e. section 68, which is not attracted in the present case. Since the provisions of section 68 of the Act applied in this case is no more res integra, therefore, on technical ground, the appeal has to be allowed. 8. Even otherwise, on merits, Ld. A.R. of the assessee submitted that the AO called upon the assessee to substantiate the source of deposits of the alleged amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. A.R. further submitted that in this case section 68 of the Act is not attracted at all. He relied on the following judicial pronouncements: i) Baladin Ram, vs. CIT, 71 ITR 427 (SC) ii) Anandram Raitani vs. CIT, 223 ITR 544 (Gau) iii) Smt. Madhu Raitani vs. ACIT, 45 SOT 231 (Gau) iv) Smt. Manasi Mahendra Pitkar vs. ITO, 73 Taxman.com 68. v) Mehul vs. Vyas vs. ITO, 80 Taxman.com 311 vi) Amitabh Bansal vs. ITO, 175 ITD 401 (Del) vii) CIT vs. Bhaichand H Gandhi, (1983) 53 company cases 400 (Bom) 10. Ld. DR submitted that the assessee has failed miserably to furnish necessary documents either before the AO or before the Ld. CIT(A), therefore, the addition is justified and do not call for any interference. Ld. D.R. submitted that invoking of section 68 as alleged by Ld. A.R. is not a basis to intervene the order of the Ld. CIT(A). He also pointed out that it is not clear that the complete confirmation was produced before the AO, therefore, this confirmation cannot be relied. 11. Placing rejoinder to above, Ld. A.R. referred to page No. 37 38 of paper book, containing confirmation and ledger account of M/s. Rameswar Agro Industries Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f books of the assessee maintained for that previous year. 15. In view of foregoing discussion, I am satisfied that the assessee submitted confirmation from the purchaser of paddy before the authorities below and this was the best possible evidence under his command to establish that the impugned amount was actually sale proceeds of paddy, which was purchased from open market/farmers and sold the same without maintaining any books of account to M/s. Rameswar Agro Industries Pvt. Ltd. Even as a man of ordinary prudent, one cannot disagree with the contention of the assessee that even if he is a director in the purchase company i.e. M/s. Rameswar Agro Industries Pvt. Ltd., he cannot be refrained from making sale of paddy to the company in which he is a director. However, I am cautious about the provisions of section 40A(2) (3) of the Act, wherein, the department has right to examine the expenses and payments made to related parties by the related parties but it is not the allegation of the AO in the present case. I am also not in agreement with the contention of Ld. DR that if sale has not been shown by the assessee in the return of income, then entire amount has to be taxed i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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