TaxTMI 
TaxTMI 
2013 (11) TMI 151
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....opening and his show cause notice issued to the assessee by determining the nature and quantum of income which he himself imagined to be escaped and finalized the assessment on the other reasons which were never recorded for issuance of notice u/s 148 which is not justified under the law. Addition of Rs.1306000/- for cash deposited out of cash in hand from cash book. 4. The learned CIT(A) erred in confirming the addition of Rs.1306000/- for depositing of cash in the bank account. 5. The learned CIT(A) failed to appreciate that the appellant maintained Cash Book duly audited under companies act and the AO as well as CIT(A) has not found any discrepancies in the Cash Book maintained by the appellant. Therefore just because the appellant deposited money in the bank account out of the earlier cash in hand as per cash book and out of prior withdrawn money from its regular bank account that cannot be the basis to make arbitrary addition of Rs.1306000/- u/s 68 which is unjustified and may be deleted. 6. The learned CIT(A) erred in confirming the addition of Rs.1306000/- without appreciating the fact that the AO failed to poin....
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....record as called by him." Ground Nos. 1 to 3 2. The relevant facts are that the assessee a Pvt. Ltd. Company is engaged in the business of Financing and Share Trading business. It was earning income from interest and share trading business. The assessee company filed its return of income for the assessment year under consideration i.e A.Y. 2001-02 declaring a loss of Rs.2,611/-. The return was processed u/s 143(1) of the Act. Subsequently proceedings were initiated u/s 147 of the Act and assessment was framed by making an addition of Rs.39,12,000/- by the AO. The aggrieved assessee preferred first appeal but could not succeed. Besides, questioning the additions made by the AO, the assessee had also questioned the validity of notice issued u/s 148 of the Act on the basis of information received from investigation wing of the department. 3. In support of the grounds the ld. AR submitted that the information received from investigation wing was vague and general, on the basis of which even a prima facie view cannot be taken that the assessee was providing accommodation entries to the beneficiaries. The AO without application of his mind has issued notice u/s 148 of the Act ba....
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.... tax has escaped assessment is required to form, sufficiency of which cannot be questioned in a Court of law. We are of the view that there was sufficient material in possession of the AO under which any prudent person would have reasons to believe that income assessable to tax has escaped assessment. We thus hold that the AO was justified in the present case in initiating proceedings u/s 147of the Act read with Section 148 of the Act. The ld. CIT (A) has thus rightly upheld the action of the AO in this regard and the validity of notice issued u/s 148 of the Act. The same is upheld. Ground nos.1, 2 and 3 are thus rejected. Ground nos. 4, 5 and 6 6. In these grounds the assessee has questioned sustaining of the addition of Rs.13,06,000/- on account of unaccounted cash deposit in bank. 7. The contention of the ld. AR remained that the ld. CIT (A) has failed to appreciate that the assessee had maintained cash book duly audited wherein no discrepancy was found. Just because the assessee had deposited money in the bank account out of earlier cash in hand as per cash book and out of prior withdrawn money from its regular bank account, the addition u/s 68 of the Act cannot be mad....
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....he assessee regarding the source of the deposit as well as genuineness of the cash book already filed. Ground nos. 4, 5, & 6 are accordingly allowed for statistical purposes. Ground nos. 7, 8, 9, & 10 10. In these grounds the assessee has questioned the validity of addition of Rs.26,06,000/- on account of credits appearing in the bank account, sustained by the ld. CIT (A). The ld. AR pointed out that the authorities below without examining the contents of the confirmation filed by the parties have made and sustained the addition. He submitted that before the authorities below the assessee had filed complete addresses and income particulars of the persons from whom such credits appears. The AO has not pointed out any discrepancy in the confirmations of the parties furnished by the assessee in support. Besides their confirmations, the assessee had also furnished their bank accounts. The AO had specifically called for bank statements of all the persons along with their ITR and balance sheet which were duly submitted before him. The ld. AR referred page nos. 102 to 106 of the PB where confirmations of the parties filed before the AO have been made available. The ld. AR pointed ou....