2022 (7) TMI 428 - AT - Income Tax

Cash deposits during the demonetization period - assessee having two PAN - AO passed the assessment u/s 144 for failure to submit the ITR and details - CIT(A) set aside the order - HELD THAT - Cash deposits are made out of the cash sales of the assessee and have been duly recorded in the books of account and reflected in the P L Account of the assessee submitted before the Revenue Authorities. We also find merit in the arguments of the Ld. AR that considering the peculiar circumstances to this business cash being received by the dealer in automobiles for making payments to various authorities such as registration charges, insurance, life tax etc. - The cash is collected from the customers as reimbursements and hence it does not form part of the revenue of the assessee. We also note that from the paper book submitted by the AR that the Account Number has been typographically wrongly mentioned in the Note-9 in Schedule to Balance Sheet as on 31/3/2017 appended to financial statements, but the balances are properly disclosed in the books of accounts thus, mere a typographical error of the account number of the bank account does not mean that the assessee has not disclosed proper information about the bank account details. The assessee while filing ITR-V has disclosed the bank account ending with No. 38301 in the list of bank accounts which was demonstrated by the Ld. AR before us. We also note from the records available before us that the income appearing in Form 26AS with another PAN was also shown under the head other income by the assessee while filing the return of income. In view of the above facts, we find no infirmity in the order of the Ld. CIT(A) and hence no interference is required.

Summary

Issues:
Appeal against order of Ld. CIT(A)-1, Guntur regarding cash deposits during demonetization period, multiple PANs, unexplained cash deposits, and undisclosed bank account.

Analysis:
1. The appeal pertains to the Revenue challenging the Ld. CIT(A)'s decision favoring the assessee in an assessment for AY 2017-18. The Revenue raised several grounds, including failure to produce certain submissions before the Ld. AO, acceptance of additional evidence by Ld. CIT(A) without allowing AO to examine under Rule 46A, and lack of substantiation regarding cash deposits and income from other sources.

2. The Ld. CIT(A) deleted the additions made by the Ld. AO, prompting the Revenue's appeal. The Revenue contended that the assessee did not cooperate during assessment, produced additional evidence before Ld. CIT(A) without AO's examination, and held two PANs, violating tax laws. The Ld. DR supported the Ld. AO's order.

3. The assessee, through the Ld. AR, argued that the bank account number discrepancy was a typographical error, with the correct account duly disclosed. The cash deposits were from sales and accounted for in the books, with a portion being reimbursements. The income from other sources was properly disclosed. The Ld. AR emphasized no misrepresentation in income.

4. Upon review, it was found that the assessee had responded to the show cause notice, with cash deposits reflecting sales and reimbursements. The typographical error in the account number did not affect the disclosure of bank details. The income from other sources was correctly reported. Consequently, the Ld. CIT(A)'s decision was upheld, finding no flaws.

5. The Cross Objection raised by the assessee was supportive and required no adjudication. The appeal of the Revenue was dismissed, and the assessee's Cross Objection was disposed of in the judgment delivered on June 28, 2022, by the Appellate Tribunal ITAT Visakhapatnam.