2009 (3) TMI 589

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....s. In so far as the assessment under reference is concerned, i.e., for the assessment year 1997-98, the respondent assessee had not filed any return of income. The Assessing Officer was of the view that income from the sale of lottery tickets invested as fixed deposits in different banks, as well as, interest derived by the respondent assessee on the aforesaid fixed deposits had escaped assessment.   2. A notice under section 148 of the Income-tax Act, 1961, was issued to the respondent assessee onMarch 22, 2004, after getting appropriate approval. The aforesaid notice was served on the respondent assessee onMarch 24, 2004. In response to the aforesaid notice, the respondent-asses-see filed a return (for the assessment year 1997-98) d....

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....penalty proceedings were also initiated against the respondent-assessee under section 271B of the Income-tax Act, 1961, as he had failed to get his accounts audited.   5. Dissatisfied with the determination rendered by the Assessing Officer, as also penalty proceedings initiated against him, the respondent-assessee preferred an appeal before the Commissioner of Income-tax (Appeals),Faridabad. Before the aforesaid appellate authority, the respondent-asses-see asserted that investments in the nature of fixed deposits were made by him in different banks out of cash received from vendors (of the lottery tickets). To substantiate his aforesaid claim, the respondent-assessee relied on a confirmation of all the vendors on plain paper, along ....

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....ors by deputing Inspectors, and had arrived at the conclusion that the same were genuine. As also the fact that the present controversy in respect of the assessment year 1997-98 was identical to the controversy which was earlier adjudicated upon for the assessment year 1996-97, the Commissioner of Income-tax (Appeals), Faridabad, arrived at the conclusion that it could not be held that the FDR deposits made in the name of the respondent-assessee valuing Rs. 49,76,000 in the Bank of Maharashtra and Rs. 76,00,000 in the Punjab National Bank had been made from out of unexplained funds. The Commissioner of Income-tax (Appeals),Faridabad, accordingly, deleted the aforesaid addition made in the income of the respondent-assessee based thereon. &nb....