TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 226
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....3,41,81,656/- during the year under consideration, whereas the assessee has filled return of income on 29.03.2011 for A.Y 2010-11 of Rs. 1,49,070/-. The A.O. reopened the assessment under section 147 of the I.T. Act that income of Rs. 3,41,81,656/- has escaped assessment for failure on the part of the assessee. A notice was served upon the assessee, in response to which, assessee stated that return filed originally on 29.03.2011 may be treated as return filed in response to notice under section 148 of the I.T. Act, 1961. During the re-assessment proceedings the Bank accounts statements were requisitioned under section 133(6) of the I.T. Act, 1961 from 12 Banks details of which were noted in para-2 of the assessment order. The assessee has not filed any details in response to notice under section 142(1) of the I.T. Act, 1961, issued time to time. Hence, summons under section 131 of the I.T. Act, 1961 were issued and statement of assessee was recorded on oath. During the course of statement, assessee has admitted to have opened 12 Bank Accounts in different Banks which were operated by him through his proprietary concern M/s. Rama Trading Co. and M/s. Shri Govind Enterprises and M/s.....
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....ely. Thus, the total credits in these Bank accounts were to the tune of Rs. 10,95,72,416/-. The explanation of assessee was same. The A.O. made the addition on account of commission earned on these deposits and made addition of Rs. 2,32,434/- and completed the re-assessment proceedings. 3.3. The assessee in his appeals before the Ld. CIT(A) challenged the above additions and that assessment order have been passed against the Rule of Natural Justice and in A.Y. 2010-2011 assessee also raised the issue that no reasons for reopening of the assessment have been supplied to the assessee. The Ld. CIT(A) noted in the appellate order that no specific ground have been raised challenging the reopening of the assessment under section 148 in A.Y. 2008-2009. It was raised for the A.Y. 2010-2011 that A.O. has not provided copy of the reasons recorded for reopening of the assessment and there is non-application of mind. The Ld. CIT(A), however, noted that assessee has not raised this issue and that A.O. is expected to dispose of all the objections when assessee raised the objection before him. Copy of the reasons are given only when asked for by the assessee. The Ld. CIT(A) referred to Judgment ....
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....o the total deposits made in the bank account of the assessee. 12. As regards the issue of validity u/s 148, the assessee did not raise this issue before the assessing officer not did he filed any objections against the reopening. Therefore this issue cannot be raised at this stage. Moreover as held in the case of Home Finders Housing Ltd, reported in 256 Taxman 59(SC), even if the assessee had asked for the said reasons and had filed objections, non compliance of the decision of the Hon'ble Apex Court in the case of GKN Drivshafts India Ltd. (supra) could not have made the assessment order void ab-initio. As regards the reasons recorded, the standard operating procedure of the department has been discussed in the decision of Mayur Bhai Mangal Das Patel of Hon'ble ITAT Ahemdabad, confirmed by Hon'ble Gujarat High Court and reported in 93 taxman.com 220 Gujarat. 13. On merits the electricity companies do not accept cash payments tor its bills above a threshold amount. The assessee claims to be engaged in issuing cheques for payment of electricity bills of clients against cash received from them. Such activity is opposed to public policy and is an illegal activity. Without ....
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....e submission of the Learned Counsel for the Assessee. The Ld. CIT(A) has specifically mentioned in the appellate order that in response to notice under section 250 of the Income Tax Act Shri S.C.Singhal, C.A. attended the hearing and he was heard. The Ld. CIT(A) in para-10 of the appellate order as reproduced above also mentioned that assessee has made a request for adjournment many times which were granted and ultimately there were no compliance to the notice of hearing. The Counsel for Assessee was also replied about the dates of hearing fixed for hearing of the appeals in response to the request for adjournment made by the Counsel for Assessee. Therefore, contention of Learned Counsel for the Assessee is without merit that no reasonable opportunity of being heard have been given to the assessee. Section 251(2) of the Income Tax Act, 1961 provides "The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such assessment or reduction." This provision does not require the Ld. CIT(A) to issue any formal notice to the assessee for enhancing the assessment. The ....
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....ancement of unexplained cash deposits in the Bank accounts of the assessee. 8. We have considered the rival submissions. There is no dispute with regard to the legal proposition that the First Appellate Authority cannot consider new source of income. However, in the present case the A.O. reopened the assessment because it was found that there were cash deposits in several Bank accounts of the assessee which do not match with the returned income shown by the assessee. The A.O, therefore, reopened the assessment on having reason to believe that income chargeable to tax on account of unexplained cash deposits in the Bank accounts of the assessee has escaped assessment. The A.O. called for the details of the Bank accounts from the assessee, but, the assessee did not produce the same. The A.O, however, requested the details of Bank accounts under section 133(6) of the Income Tax Act, 1961 and ultimately assessee agreed that he was maintaining 12 Bank accounts in assessment year 2010-11and 02 Bank accounts in assessment year 2008-09. The assessee explained that he is working as a commission agent of sale of cloth and chemical and was also engaged in business of discounting of Cheque/Dem....
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.... CIT(A) to enhance the addition on account of unexplained cash deposit in the Bank accounts. 10. On the other hand the Ld. D.R. submitted that since assessee failed to give list of the persons on whose behalf electricity bills were paid and what was the business of assessee for earning commission income, therefore, assessee failed to explain the source of the cash deposited in the Bank accounts. Therefore, additions have been rightly made against the assessee on merit. The Ld. D.R. relied upon the Judgment of the Hon'ble Punjab and Haryana High Court in the case of Sudhir Kumar Sharma vs., CIT 46 taxmann.com 340 (P&H) in which there was huge cash deposited in the Bank accounts of the assessee. The assessee failed to give list of the persons who advanced cash to him along with their conformations in respect of the said cash credit. The addition under section 68 of the I.T. Act 1961, was confirmed. The decision of the Punjab and Haryana High Court in this case has been confirmed by the Hon'ble Supreme Court by dismissing the SLP which was reported in 69 taxmann.com 3219 (SC). The Ld. D.R. also similarly relied upon Judgment of the Hon'ble Delhi High Court in the case of Rajiv Jain v....
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....commission income only. The assessee also did not produce any evidence or explanation before the Ld. CIT(A) with regard to source of the cash deposits in his Bank accounts despite show cause was given to him for enhancement to the returned income. Even before the Tribunal no evidence is produced to support the explanation of assessee that it was the amount of other factory owners or businessman which were deposited in the Bank accounts of assessee for making further payment on their behalf. In the absence of any evidence, material or explanation in this regard, we are of the view that assessee failed to substantiate the explanation given before the authorities below, therefore, assessee failed to establish the source of the cash deposits in the Bank accounts of the assessee. We, therefore, do not find any merit in this ground of appeal of assessee. The same is accordingly dismissed. ISSUE NO. 4 : 12. Whether addition under section 68 on account of cash deposits in the Bank accounts is maintainable ? 13. Learned Counsel for the Assessee submitted that Ld. CIT(A) has made addition under section 68 of Income Tax Act, 1961, despite assessee did not maintain any books of accounts. T....
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....xplain the source of the cash deposits in the Bank accounts was not substantiated through any evidence or material on record. The assessee merely stated before A.O. that return of income filed originally may be treated as return filed in response to notice under section 148 of the Income Tax Act, 1961. The assessee never asked for the copy of the reasons for reopening of the assessment from the A.O. as per remand report of the A.O. It appears from the findings recorded by the A.O. in the assessment order that despite there were cash in Crores of Rupees found to have been deposited in the Bank accounts of the assessee and assessee failed to explain the source of the cash deposits in the Bank account of assessee, the assessee choose to remain silent before the A.O. as regards reopening of assessment because the A.O. without any reasons and justification and in collusion with the assessee completed the formality just by making addition an account of small commission. The A.O. in A.Y. 2010-11 as against the total unexplained cash deposit of Rs. 24.34 crores made addition of Rs. 19,47,247/- only. In A.Y. 2008-09 despite there were unexplained cash deposits in the Bank accounts of assess....