2020 (11) TMI 980 - AT - Income Tax

Addition u/s 69 - As per assessee advance finance charges on loan granted by financier for purchase of truck which were collected in advance and added to the cost of truck for the purposes of funding by the financier and further an amount of insurance being paid by the finance company on behalf of the assessee for acquisition of the truck which has been added to the cost of the truck for the purposes of granting/funding loan - HELD THAT - One more opportunity need to be granted to the assessee to produce relevant evidences to substantiate contentions as are made with respect to advance finance charges collected by financier which is added to loan amount as well insurance paid by financier on behalf of the assessee to insure the truck purchased by the assessee. Thus, we are remitting the matter back to the file of the AO for fresh adjudication of the matter denovo. The assessee is directed to produce relevant documentary evidences before the AO to justify his stand. The AO shall admit evidences filed by the assessee which shall be adjudicated on merits in accordance with law. Needless to say that the AO shall give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice. The ground number 3 filed by assessee in memo of appeal is allowed for statistical purposes. Addition towards cash deposits unexplained - HELD THAT - The complete cash book is not filed and it carries mainly cash receipt from coal business. In any case , the cash book now filed before the tribunal need verification by the authorities below and we are remitting the matter back to the file of the AO for fresh determination of the issue as to the verification of bonafide of explanation of the assessee with respect to sources of cash deposit in Axis Bank claimed to be from business of truck plying. The assessee is directed to produce all relevant evidences of receipts , expenses etc. from the truck plying business to support and justify its stand. The AO is directed to admit all evidences filed by assessee in its support and the same be adjudicated denovo on merits in accordance with law. Needless to say that the AO shall provide proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law, in denovo proceedings as directed by us. This ground of appeal bearing number 4 filed in memo of appeal filed with tribunal is allowed for statistical purposes.

Summary

Issues involved:
1. Assessment validity and additions made without proper consideration.
2. Justification of income determination from truck plying business.
3. Addition under Section 69 and its justification.
4. Addition maintained by Commissioner of Income Tax (Appeal) and its validity.
5. Additional grounds for appeal.
6. Dismissal of certain grounds not pressed.
7. General nature of certain grounds not requiring separate adjudication.
8. Challenge to additions made by authorities below.
9. Requirement for additional evidence to substantiate contentions.
10. Cash deposits in Axis Bank account and justification of sources.
11. Remitting matters back to Assessing Officer for fresh adjudication.
12. Verification of bonafide explanations by the assessee.
13. Direction for production of relevant evidences.
14. Adjudication on merits in accordance with law.
15. Providing adequate opportunity to the assessee in accordance with principles of natural justice.

Analysis:

1. The appeal challenges the assessment validity and additions made without proper consideration. The appellant contested the assessment framed under Section 143(3) as bad in fact and law, highlighting unjustified income determinations from the truck plying business and additions made under Section 69. The grounds raised were thoroughly examined, leading to the dismissal of certain grounds not pressed and others deemed general in nature.

2. The income determination from the truck plying business was a key issue. The Assessing Officer assessed the income under the presumptive regime, invoking Section 44AE of the Income-tax Act. The appellant's explanations regarding investments in the truck were not accepted, leading to additions under Section 69. The appellate tribunal directed the appellant to produce relevant documentary evidence to substantiate their contentions, remitting the matter back to the Assessing Officer for fresh adjudication.

3. Another contentious issue was the cash deposits in the Axis Bank account. The appellant failed to disclose this account initially, and explanations regarding the sources of cash deposits were deemed insufficient. The tribunal directed the appellant to provide details of income from truck plying and cash book to justify the cash deposits. The matter was remitted back to the Assessing Officer for verification of the bonafide explanations and production of all relevant evidences for further adjudication.

4. Throughout the judgment, the importance of providing adequate opportunity to the assessee in accordance with principles of natural justice was emphasized. The tribunal allowed certain grounds for statistical purposes, highlighting the need for thorough examination and adjudication on merits in compliance with legal provisions.

5. In conclusion, the appeal was partly allowed for statistical purposes, underscoring the significance of due process, substantiated contentions, and adherence to legal principles in tax assessments and appeals.

This detailed analysis outlines the key issues raised in the appeal, the tribunal's considerations, and the directions provided for further adjudication, ensuring a comprehensive understanding of the judgment.