TaxTMI 
TaxTMI 
2019 (4) TMI 1649
X X X X Extracts X X X X
X X X X Extracts X X X X
....one as the same has been passed without jurisdiction. Further to be mentioned that the assessment order passed by Income Tax Officer Ward-4, Khanna is also bad in law as explained above since Income Tax Officer Ward-5, Khanna had no jurisdiction. Thus he could not have transferred the file the Income Tax Officer Ward-4, Khanna. Thus the impugned order merits to be quashed on this score. 3. The impugned order merits to be quashed on the grounds that the Assessing Officer had wrongly issued notice under Section 147 on the assumption that the cash deposits made by the appellants constituted undisclosed income of the appellants which has not been proved by the Assessing Officer. Since it is an admitted fact that no addition have been made on the basis of the reasons recorded for re-opening the assessment under Section 148 of the Income Tax Act, thus the addition could not be made on a ground which was never the basis of the re-opening of the case. 4. The Authorities below ought to have considered the plea of the appellants that the addition of Rs. 17,25,135/- made by them is unjustified as the same did not pertain to the assessment year for which the assessment procee....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Total cash withdrawal from bank 86,20,000/- Total Rs. 1,86,49,863/- Payments Total cash deposited in bank 1,06,29,400/- Capital withdrawals 36,000/- Expenses 1,63,334/- Sundry creditors 78,09,722/- Total Rs. 1,86,38.456/- Closing cash in hand 11,407/- 6. The A.O. asked the assessee about the source of cash brought forward amounting to Rs. 17,25,135/-. In response, the assessee explained as under: Date Particulars Debit Credit 16.10.2007 By amount out personal saving 850000 By amount from father 350000 By amount from Surinder Singh 250000 By amount from Varinder Singh 200000 31.03.2008 By Net profit 75135 Total Rs. 1725135 Also as per balance sheet as on 31.03.2008 the assessee has shown cash in hand of Rs. 17,25,135/- on the asset side. 7. The A.O. after considering the submissions of the assessee observed that the assessee had shown net profit of Rs. 75,135/- for the year ending on 31.3.2008 i.e. the preceding year, while the cash in hand was of Rs. 17,25,135/-. He made the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eopening the assessment in the case of the assessee on the basis of evidence in his possession cannot be said to be unjustified. Having said so, the action of the Assessing Officer in reopening the assessment in the case of the assessee is, therefore, upheld. In the result, the grounds No. 1, 2, 3 and 4 of appeal taken by the assessee are dismissed." 9. As regards to the merits of the case, the assessee submitted that the assessee furnished detailed capital account having opening balance as on 1.4.2008 amounting to Rs. 17,25,135/-, which was disclosed in the Balance Sheet as on 31.3.2008. It was also stated that no addition was made on the basis of the reasons recorded for reopening the assessment u/s 148 of the Act and that the assessee furnished the explanation of the opening balance with evidences, the said amount was the closing balance as on 31.3.2008, relating to the preceding year relevant to the assessment year 2008-09, so there was no reason to treat the same as unexplained for the year under consideration. It was also submitted that the A.O. at the most could have examined the availability of cash balance as on 1.4.2008 from the Balance Sheet as on 31.3.2008 instead....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the opinion that the assessee failed to prove the source of opening cash in hand by proving the credit worthiness of his father, Sh.Surinder Pal Singh and Sh.Veer Varinder Pal Singh Shahi even during appellate proceedings. No documentary evidence to prove the creditworthiness of these persons has been produced even during appellate proceedings apart from the documents which have already been considered by the Assessing Officer. As the assessee had absolutely failed to prove the creditworthiness as well as genuineness of transaction in the case of his father as well as in the cases of Sh. Surinder Pal Singh and Sh. Veer Varinder Pal Singh Shahi with acceptable documentary evidence, the opening cash in hand shown by the assessee cannot be said to be explained. In other words, the cash deposits in the bank account of the assessee to the extent of opening cash in hand which were explained by the assessee with opening cash in hand cannot be said to be explained. However, I am of the opinion that the Assessing Officer should have made the addition under section 69A of the Act instead of section 68. The mistake of the Assessing Officer is corrected accordingly. The judicial pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Act only on the basis of the information received. The A.O. mentioned that the assessee had deposited a sum of Rs. 1,06,29,400/- in his saving bank account. However, no addition was made for the said amount and the explanation of the assessee was accepted. The A.O. made the addition of Rs. 17,25,135/- which was opening cash in hand brought forward from the preceding year. In my opinion, when the closing balance as on 31.3.2008 i.e. the preceding year was considered to be genuine and correct, then there was no reason to doubt the same balance taken by the assessee on 01.04.2008 as opening cash in hand for the year under consideration. In that view of the matter, the addition made by the A.O. and sustained by the Ld.CIT(A) deserves to be deleted. Moreover, the assessment was reopened by the A.O. on the basis of the information received from Investigation Wing. 14. On a similar issue, the Hon'ble Delhi High Court in the case of Signature Hotels Pvt. Ltd. Vs. I.T.O. & Another (supra) held as under: "that the reassessment proceedings were initiated on the basis of information received from the Director of Income-tax (Investigation) that the petitioner had introduced....