2024 (10) TMI 773 - AT - Income Tax

Addition u/s 69A - unexplained money - HELD THAT - It is an arbitrarily exercise of powers at the end of the revenue. There is no logic or reasoning given for not accepting these cash deposits. The assessee was in such a line of business, where it has to sale pulses, wheat gram, flour and related products in cash. The other argument given by assessee that cash was recorded and, therefore, section 69A cannot be invoked. For buttressing this proposition Roop Fashion case relied upon on identical circumstances the Revenue disbelieved the cash sales Tribunal has examined this issue in detail and then, compared the total sales of A.Ys. 2015-16, 2016-17, 2017-18 and deleted the addition. The cash was recorded in the books hence it cannot be termed as unexplained cash. Only thing which was required to be explained was the source of such deposits, which assessee has explained i.e. out of sale proceeds, deposits have been made. Thus, we are of the view that addition made by AO and confirmed by the ld. CIT(Appeals) is not sustainable. Decided in favour of assessee. Non payment of TDS - assessee has contended that actually it has paid the TDS vide Challan - AO disbelieved this version of the assessee on the ground that it failed to furnish copy of the Challan - HELD THAT - We are of the view that once assessee has explained the BSR Code, details of payments, AO should have verified. Now the assessee has placed copy of the Challan whereby a sum stands deposited. Considering the above details, we delete this addition. Decided in favour of assessee.

Summary

Issues Involved:

1. Addition under Section 69A of the Income Tax Act for unexplained money.
2. Addition for non-payment of TDS.
3. Jurisdictional issue regarding issuance of notice under Section 143(2).

Issue-wise Detailed Analysis:

1. Addition under Section 69A of the Income Tax Act for unexplained money:

The primary issue in this appeal was the confirmation of an addition of Rs. 1,29,23,200/- under Section 69A of the Income Tax Act, 1961, by the Assessing Officer (AO), which was upheld by the Commissioner of Income Tax (Appeals). The AO treated the deposits made by the assessee during the demonetization period as unexplained money, arguing that the assessee failed to substantiate the source of these deposits with proper documentary evidence. The AO noted that despite the assessee's claim that the deposits were from sales turnover, there was no substantiation with books of accounts or other relevant documents. The Tribunal, however, observed that the assessee's business involved regular cash transactions and that similar deposits were made in the previous financial year without any objection from the revenue authorities. The Tribunal found that the AO's disallowance lacked specific reasoning and was arbitrary, especially since the majority of the cash deposits during the year were accepted. The Tribunal concluded that the cash was recorded in the books, and hence, Section 69A could not be invoked. The addition was deleted as the assessee satisfactorily explained the source of deposits as sales proceeds.

2. Addition for non-payment of TDS:

The second issue was the addition of Rs. 1,04,060/- for non-payment of TDS. The AO made this addition because the assessee failed to furnish evidence of actual payment of TDS. The assessee contended that the TDS was paid via Challan No. 281 with a specified BSR Code, but the AO disbelieved this due to the absence of the Challan copy. The Tribunal found that the assessee provided sufficient details for verification, and a copy of the Challan was later presented. Given this evidence, the Tribunal deleted the addition, indicating that the AO should have verified the payment details provided by the assessee.

3. Jurisdictional issue regarding issuance of notice under Section 143(2):

The assessee raised an additional ground regarding the jurisdictional issue, arguing that the notice under Section 143(2) was issued by an officer who did not have jurisdiction over the case, and the assessment was completed by another officer. The Tribunal noted that this objection was neither raised before the AO nor pleaded as a ground before the CIT(A). Addressing this issue would require discovering new facts and a remand report. However, since the Tribunal had already decided in favor of the assessee on the merits of the additions, it did not admit this additional ground for adjudication, deeming it unnecessary to explore further due to the lack of complete facts on record.

Conclusion:

The Tribunal allowed the appeal, deleting the additions made under Section 69A and for non-payment of TDS, and did not admit the additional ground regarding the jurisdictional issue. The order was pronounced in open court on 07/10/2024.