TaxTMI 
TaxTMI 
2018 (8) TMI 1547
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....n law and circumstances of the case in rejecting the explanation provided by the assessee in the proceedings u/s 263." 3. The brief facts of the case show that the assessee is an individual deriving the income from business filed his return of income on 23/3/2012 for Rs. 1,59,850/-. Assessment u/s 143 (3) of the Act was passed on 28/2/2014 determining total income of Rs. 209850/- whereby only addition made is of Rs. 50,000/- on account of low house hold expenditure. The Ld. Assessing Officer noted that the assessee has deposited Rs. 10,10,000/- in his saving bank account in ICICI Bank. However, no addition was made on account of the above deposit. During the course of assessment proceedings, the assessee was asked by the A.O. vide letter dated 18/11/2013 vide Para No. 4 to show that what is the source of the amount deposited as cash in the bank account. The assessee was also asked to produce books of accounts, cash book etc. The assessee explained to the Ld. Assessing Officer that Rs. 4,10,000/- is received from his various customers and Rs. 5 lacs was received for housing loan from his wife. The assessee explained that Rs. 3 lacs in trenches of Rs. 1 lac each was received on di....
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....drawal in cash till 7/3/2011 to the date of bank statement made available on record. Therefore, according to him, the cash was not available with the wife of the assessee. With respect to the deduction under Chapter VI A, assessee has claimed deduction of Rs. 1,97,000/- but has furnished no documentary evidence but before CIT the assessee could produce the details of the premium paid of Rs. 193668/- and, therefore, CIT agreed for deduction of Rs. 1 lacs. However, excess deduction claimed by the assessee of Rs. 97,000/- was held to be wrongly allowed. The Ld. CIT further held that the case of the assessee was selected under scrutiny only to examine the cash deposit of Rs. 10,10,000/- which was not even examined by the A.O. Therefore, he held that the order passed by the ld. Assessing Officer is erroneous and prejudicial to the interest of the Revenue. It was further directed to the A.O. to make fresh verification on the points and decide the issue afresh. 5. By this order, assessee is aggrieved and hence, filed this appeal. Before us, the Ld. AR submitted a paper book containing 34 pages. It was stated that notice u/s 142(1) placed at Page No. 9 & 10 shows that a specific query h....
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.... replied by the assessee. He further submitted that the assessee has explained in one line that he has received Rs. 5 lacs from Housing Loan from his wife and deposited in bank on 1/3/2011. There is no reference that how his wife got the sum of Rs. 5 lacs, it was not at all enquired. He, therefore, stated that there is no enquiry made by the Assessing Officer during the assessment proceedings. He further submitted that with respect to the deposit of the wife, it is apparent that she does not have the source correlated with the date of the deposit and subsequent deposit of cash by her. The Ld. DR further submitted that cash flow submitted by the assessee also does not support the case of the assessee. He referred to Page No. 18, the has shown turnover of Rs. 9,73,726/- where as the turnover shown by the assessee in income tax return is Rs. 14 lacs. He further stated that the order of the Ld. Assessing Officer is without making any inquiry but merely collecting the papers. Therefore, the order is passed without application of mind and without doing any enquiry for which the selection of scrutiny was made. 7. In the rejoinder, the Ld. AR submitted that with the new inserted explana....
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....sessee, ld A.O did not raise any further question about the capacity of his wife to deposit the above sum. Further, with respect to the loan of the wife, the Ld. CIT has conclusively held that she was not having enough cash with her for deposit with the assessee. With respect to the advances received from the customers, it was also noted by the CIT (A) that the money was not used purchase of material but was deposited with in HDFC Bank Housing loan account or as an investment. As the case of the assessee was selected for scrutiny to examine this aspect only, the ld AO should have at least made enquiries, which a person of reasonable prudence would have made. According to us, the ld AO failed to do so. He even failed to even reconcile the amount deposited with the amount explained by the assessee, which is also found short by Rs. 1 lakh. With respect to non-availability of cash with the wife of the assessee, he did not examine whether such cash is available with her or not. He even did not care to see whether there are such books available with the wife of the assessee or not. Therefore, there is no inquiry from the ld AO on this aspect, which a person of ordinary common sense would....