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TaxTMI 
TaxTMI 
TaxTMI 
2018 (9) TMI 1466
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....ay, which is not possible. Assessee did not sale any asset. 1.3. Cheques were issued from cash deposited in bank a/c to share brokers indicate purchase shares for investors. (2) Learned CIT(A) had erred in rejecting that bank transactions are share trading business transactions and business profit @ 25% may be taxed. (3) The assessee craves for liberty to amend, modify and add any grounds of appeal or furnish additional evidences. 2. Subsequently, an application for revised and additional grounds has also been preferred by the assessee on 15.06.2018 during the pendency of the matter before this Ld. Tribunal which is as follows:- 1. On the facts and circumstances of the case the order passed by Id. CIT(A) is bad in law. 2. On the facts and circumstances of the case and in law the proceedings initiated u/s 147/148 are not valid. Without prejudice to above 3. On the facts and circumstances of the case and in law Ld. CIT(A) erred in confirming the ex-parte assessment made by Ld. AO u/s 144/148, without considering the reasons recorded. 4. On the facts and circumstances of the case and in law Ld. CIT(A) erred in sustaining addition of Rs. 44,55,520/- by rejectin....
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.... craves leave to re-serialize and renumber all the grounds which are placed in the Annexure attached. 4. The facts leading to this case is that through AIR information was received that the assessee has deposited cash to the tune of Rs. 44,42,920/- in his bank account with HDFC Bank Ltd. Unjha. The case was reopened on the basis of such information followed by issuance of notice u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") which was served upon the assessee on 29.3.2013. Subsequently, notices u/s.143(2) and 142(1) of the Act dated 02.07.2013 along with questionnaires asking for certain details were issued to the assessee. The assessee, however, not attended upon which letters dated 16.09.2013 & 11.10.2013 followed by show-cause notice dated 29.11.2013 were served upon the assessee personally on 05.12.2013 with the following contents:- "Sir/Madam, Sub : Scrutiny assessment proceedings for A.Y. 2006-07 in your case - Show cause notice - reg. Please refer to the above. Notice u/s.148 of the I.T.Act was issued on 28.03.2013 and duly served upon you on 29.03.2013. In response to the said notice, neither you have filed return of income nor was f....
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....pinion that the AO has sufficient material on record and reason to believe that income had therefore the reopening of the assessment proceedings for Asst.Year 2006-07 was justified. Ground of appeal No.1 is therefore dismissed." 6. Before us, this particular aspect of reopening of assessment was argued by the Ld. Representative for the assessee. He has taken us to page No.17 of the paper-book being the reasons of reopening of assessment u/s.147 of the Act issued by the ITO, Ward-2, Patan which is as follows: "Reasons for reopening of Assessment u/s.147 of the Income-Tax Act 1961 1. Information made available through Annual Information Return in the case of assessee showed Cash deposit of Rs. 4442920/- in a savings bank account during the financial year 2005-06. This fact shows assessee is having return of income for AY 2006-07 relevant for AY 2005-06. 2. In view of the above, I have reasons to believe that to the extent of transacting of Rs. 4442920/-, income has escaped assessment. As such assessment for AY 2006- 07 is required to be reopened in terms of provisions of section 147 of the IT Act, 1961 by invoking the provisions of section 148 of the IT Act since there is a....
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....ties or error is found in the observation made by the Ld.CIT(A) while justifying reopening of assessment which calls for interference by us. Thus, this particular ground of appeal preferred by the assessee has no leg to stand upon, hence dismissed. 7.3. We, now therefore, proceed to deal with the merit of the matter. It appears from the records that before the Ld.Appellate Authority two affidavits were filed, one affirmed by the assessee and the other by Shri Pragneshbhai K.Patel by way of additional evidence along with other documents. 7.4. The Ld.Advocate appearing for the assessee at the time of hearing of the instant appeal taken us to those affidavits at page Nos.30 to 34 of the paper-book affirmed by the appellant and page Nos.35 to 37 of the paper-book, affirmed by Shri Pragneshbhai K.Patel which are reproduced below: "Affidavit I Rajesh Babulal Patel, aged 47 years, residing at Zaveriparu, Station Road, 'Unjha, solemnly affirm as under. I was born on 18/03/1968 and studied upto 12th Standard at Unjha, Dist. Patan. I was belonging to economically weaker family and therefore after 12th I did not study further and started job at the age of 18 years. Initially I s....
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....ested in investing in high yield equity/ securities. In the year 2005 to 2008 the equity market was bullish i.e. rising whereby every day the index of share market was increasing which attracted the inventors to invest in share market. The investors mostly have money, in the form of cash whereas the brokers did not accept cash as per the provisions of Income Tax Act and SEBI (Security & Exchange Board of India) Rules. To earn commission from brokers Pragneshbhai planned to open bank accounts in my name and in name of friends and relatives to deposit cash of investors and then to transfer the funds by A/c payee cheques to brokers. Therefore, the cash, cheques either debit or credit appearing in bank a/c mentioned do not belong to me. I had never seen in my life Rs. 45,00,000/-. I had earned in my life Rs. 2,500/- to Rs. 15,000/- per month till date. There is no question of owning this much huge fund by me. 1 further state on oath as under: Why notice u/s.148 not replied : I am staying at Unjha, which is rural area and in Unjha there is no income tax office, I did not file return of income u/s 139(1) since his income was below taxable limit. I did not have knowledge of Income T....
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.... transactions in above accounts. The paper book contains additional evidences and therefore, the same along with my this affidavit may please be forwarded to the concern A.O., Patan Ward for verification, examination and further inquiries and submit remand report to Hon .CIT(A) -7, Ahmedabad, so as to render justice to me on the ground of natural justice and pray. My affidavit may be considered over and above facts and circumstances mentioned Supra , as an application for additional evidences under Rule 46A of I.T.Rules,1962. I have prepared this affidavit with sound mind and having complete knowledge of facts of the case. And whatever stated above is true and correct to the best of my knowledge and belief. Place : Unjha Sd/- Date : 21.9.2015 (Rajeshbhai Babulal Patel) "AFFIDAVIT I Pragneshbhai K, Patel, aged Adult, residing at Motomadh, Molot Chora, At-Village- Unjha, Dist. Mehsana solemnly affirm as under, I am doing .Share broking business at Unjha, Dist. Patan (Gujarat) as unregistered sub broker of various registered brokers. My modus operandi is, I find out investors who are interested in investing in equities/ securities of various companies. I, introduce t....
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....onth in his life. The bank A/c No.1791000035238 and 01791000039574 with HDFC bank , station road, Unjha branch were opened by me and were operated by me, to facilitate the investors who had cash and no cheques. The said modus operand! was adopted by me to earn brokerage from brokers. The other accounts with HDFC bank mentioned above were also operated by me for the purpose of facilitating the investors to deposit cash in these accounts and transfer a/c payee cheques to broker- Sunidhi Securities & Finance. Therefore, the transactions of cash deposited in bank A/c No. 1791000035238 and 01791000039574 are not belonging to Rajeshbhai Babulal Patel, it is not his cash money. He never had any income in his life equivalent to cash deposited in bank A/c. These cash money belonged to investors and not to Rajeshbhai and as well not to me. I have prepared this affidavit with sound mind and having complete knowledge of facts of the case. And whatever stated above is true and correct to the best of-my knowledge and belief. Place: Unjha Sd/- Date :21.9.2015 (Pragnesh Patel )" 7.5. The Ld.representative of the assessee submitted before us those two the affidavits, one filed b....
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....m producing the evidence c) Where the ITO has made the order without giving sufficient opportunity In the present case, none of circumstances given in this rule are covered for admission of additional evidence. The assessee has completely failed to provide the reasons which prevented him from producing the evidences before the A.O. during the assessment proceedings. 5. Further, it is respectfully submitted that the assessee has mentioned that Unjha is a rural area and there is no income tax office there and thus he did not file any return of income. Here it is crucial to submit that Patan Income tax Office is only 30 Kms. away from Unjha town and Unjha is not a rural area. The Unjha city being the biggest jeera APMC market in ASIA and there are many Chartered accountants and Income tax practitioners who are regularly practicing there. Unjha is in no means a rural area and that far away from Patan that the assessee faced any hardship to appear before the AO during the assessment proceedings. 6. Therefore, it is respectfully submitted that as no material evidence is there on record to verify the claim of the assessee that additional evidences submitted by the assessee should....