IN INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH B BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No.519/AHD/2019 Asstt.Year 2013-2014 Dharti Zinc ITO, Ward-3 Plot No.35, GIDC, Motipura Vs. Himatnagar. Himatnagar Sabarkantha. (Applicant) (Responent) Assessee by Shri Sanjay Thakkar Revenue by Shri Jagdish, CIT-DR Dateof Hearing 24/09/2019 Date of Pronouncement 01/10/2019 ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Assessee is in appeal before Tribunal against order of ld.CIT(A)- 2, Ahmedabad dated 12.10.2018 passed for assessment year 2013-14. 2. Registry has pointed out that appeal filed by assessee is time barred by 101 days. In order to explain delay, assessee has filed affidavit of its partner Shri Bhupendrakumar Ramabhai Patel, and accountant Shri Sandipkumar Vinbhai Patel. It is deposed in both affidavits that father of Shri Sandipkumar Vinubhai Patel was diagnosed with cancer and admitted to civil hospital at Ahmedabad on 24.3.2018. On account of sudden illness of his father he could not come to office and failed to hand over appeal papers to Shri Kalpit Mehta, CA. According to ITA No.519/Ahd/2019 2 deponent Shri Bhupendrakumar R. Patel, this fact came to his notice when Shri Kalpit Mehta called him about non-filing of appeal against order of ld.CIT(A). 3. On due consideration of above affidavits, along with medical report of Shri Vinubhai Manibhai Patel, father of Shri Sandipkumar V. Patel, we are satisfied that assessee was prevented by reasonable cause for not filing appeal with Tribunal within time limit. Therefore, we condone delay and proceed to decide appeal on merit. 4. Now we take appeal of assessee. Grounds of appeal taken by assessee are running into six pages. Thus, they are not in consonance with Rule 8 of Income Tax (Appellate Tribunal) Rules, 1963 - they are descriptive and argumentative in nature. In brief, grievance of assessee is that ld.CIT(A) has erred in confirming addition of Rs.22,03,288/- and Rs.34,61,500/- which was added by AO with aid of section 68 of Income Tax Act. 5. Brief facts of case are that assessee has filed its return of income on 27.09.2013 declaring NIL income. assessee firm at relevant time was engaged in manufacturing and trading of zinc oxide. It has achieved turnover of Rs.10.46 crores and GP at 8.69%. On scrutiny of accounts, it revealed to AO that assessee has taken advance of Rs.22,03,288/- from six persons. details have been noticed on page no.4 of assessment order. He further found that assessee has deposited Rs.34,61,500/- in cash on different dates in bank account with Bank of Baroda, Motipura Branch, Himatnagar. ld.AO has confronted assessee for furnishing identity of creditors, genuineness of transaction, and their credit-worthiness with regard to loan of Rs.22,03,288/-, and with regard to cash deposits in bank ITA No.519/Ahd/2019 3 account, he directed assessee to explain source of such deposits. In response to query of AO, assessee has filed explanation qua each creditor, submitting therein that they have sufficient source of funds out of which they have given above loan to assessee through account payee cheque. With regard to cash deposit, it was submitted that assessee has achieved turnover of Rs.10.46 crores in day-to-day business. It required cash which were used for payment to labourers, repair expenses and certain other small factory expenses. Therefore, this cash were deposited through cash book. For sample check, assessee submitted cash book. Somehow, AO was not satisfied with explanation and made addition. On appeal, according to assessee, it has submitted its reply through online portal and evidence to this effect is filed before us. ld.CIT(A) has observed that assessee did not make any submission, and therefore, concurred with AO. 6. With assistance of ld.representatives, we have gone through record. Section 68 of Income Tax Act contemplates that where any sum is found credited in books of assessee maintained for any previous year, and assessee offers no explanation about nature and source thereof, or explanation offered by assessee is not, in opinion of AO satisfactory, then sum so credited in accounts may be treated as income of assessee of that previous year. 7. perusal of record would indicate that out of Rs.22,03,288/-, sum of Rs.7,61,738/- was received from Brijesh S. Patel. While giving explanation, assessee submitted that he was employee of assessee, but currently he is doing job in another company; whenever required, assessee used to take money from this employee who was trading in agriculture produce also, and alleged confirmation was also submitted. AO ITA No.519/Ahd/2019 4 expected assessee to produce depositors, but assessee failed to produce. AO further noticed that he was drawing salary of Rs.15,000/- and it is not possible for him to advance sum of Rs.7,61,738/-. Thus, AO was not satisfied with genuineness of transaction as well as credit-worthiness. Similar are facts with regard to other depositors also. On appeal, stand of assessee was that it has filed explanation through email on portal of department, but somehow this explanation did not land in office of CIT(A). Before us also, copy of mail sent online has not been placed on record. From record, we find that AO has started inquiry in month of November, 2015, when he issued notice under section 133(6) to Brijesh S. Patel. Thereafter he fixed hearing in month of February 2016 and passed assessment order on 23.3.2016. It appears that there was no sufficient time before AO for conducting proper inquiry. Therefore, he has sent notice in very short span of time, and after reply of assessee on 23.2.106 much time has not been left with AO for conducting inquiry. Therefore, without conducting full inquiry, he made addition. On appeal, ld.CIT(A) had not gone into any explanation of assessee which were submitted through on- line, and evidence to that effect has been filed before us. Faced with above, we deem it appropriate to remit both issues to file of AO for re-adjudication. Needless to say, observations made by us will not impair or injure case of AO and will not cause any prejudice to defence/explanation of assessee. 9. In result, appeal of assessee is allowed for statistical purpose. Order pronounced in Court on 1st October, 2019 at Ahmedabad. Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 01/10/2019 Dharti Zinc v. ITO, Ward-3 Himatnagar