Tribunal directs reassessment of unexplained cash deposits, emphasizing proper notice and opportunity for the assessee.

The Tribunal allowed the appeal for statistical purposes, directing the Assessing Officer to re-examine the issue of unexplained cash deposits by considering the opening balance and earlier withdrawals after verifying the books of account. The ex parte order by the CIT(A) was also addressed, emphasizing the need for proper service of notice and opportunity for the assessee to present their case.

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Issues Involved:
1. Ex parte order by CIT(A) without verifying service of notice.
2. Addition of unexplained cash deposits by the Assessing Officer.
3. Availability of cash balance for deposits.
4. Levy of interest under sections 234A, 234B, and 234C.

Issue-wise Detailed Analysis:

1. Ex parte order by CIT(A) without verifying service of notice:
The assessee contended that the CIT(A) erred in passing an ex parte order without verifying the service of the notice of hearing. The CIT(A) had mentioned that multiple hearing notices were served, and the assessee/AR either appeared and sought adjournment or filed a letter for adjournment. However, on the final hearing date, neither the assessee nor the AR appeared or sought adjournment. The assessee argued that the notice for the final hearing was not served at the correct address, leading to the non-appearance. The Tribunal acknowledged this contention and noted that proper opportunity was not granted to the assessee to explain the source of the deposits.

2. Addition of unexplained cash deposits by the Assessing Officer:
The primary issue was the addition of Rs. 19,92,389 to the total income of the assessee as unexplained cash deposits under section 69A of the I.T. Act. The assessee had explained the source of Rs. 86,27,558 out of the total deposits of Rs. 1,06,19,947 but could not substantiate the remaining amount. The Tribunal observed that the Assessing Officer did not examine the cash book to verify the availability of cash balance with the assessee for redepositing in the bank account. The Tribunal referred to similar cases where earlier withdrawals were considered for redeposit and remitted the issue back to the Assessing Officer for re-examination, directing to give due credit to the opening balance and earlier withdrawals after verifying the books of account.

3. Availability of cash balance for deposits:
The assessee argued that there was sufficient cash available from earlier withdrawals and the opening balance to cover the unexplained deposits. The Tribunal noted that the Assessing Officer did not consider the cash book or fund flow statement to verify the claim. The Tribunal cited similar cases where cash withdrawals were presumed to be available for redeposit unless contrary evidence was provided. The Tribunal directed the Assessing Officer to re-examine the availability of cash balance and give due credit to the opening balance and earlier withdrawals.

4. Levy of interest under sections 234A, 234B, and 234C:
The assessee objected to the levy of interest under sections 234A, 234B, and 234C. However, the Tribunal did not provide specific observations or directions on this issue in the judgment.

Conclusion:
The Tribunal allowed the appeal for statistical purposes, directing the Assessing Officer to re-examine the issue of unexplained cash deposits by considering the opening balance and earlier withdrawals after verifying the books of account. The ex parte order by the CIT(A) was also addressed, emphasizing the need for proper service of notice and opportunity for the assessee to present their case.

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