TaxTMI 
TaxTMI 
2021 (10) TMI 664
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....erred in sustaining the addition of Rs. 4,74,040/-. 5. That the levy of interest u/s. 234A, 234B and 234C is unjustified and hence liable to be deleted." 2. Briefly the facts of the case are that the assessment in this case was completed U/s. 148 r.w.s. 143(3) of the Act dated 31.10.2015 wherein the addition of Rs. 3,82,079/- was made on account of unexplained source of cash transactions on account of credit card usage and another addition of Rs. 4,74,040/- was made on account of unexplained source of share transactions and assessment was completed at total assessed income of Rs. 9,64,820/- as against the returned income of Rs. 1,08,700/-. On appeal the ld. CIT(A) has confirmed the said additions and against the said findings, the assessee is in appeal before us. 3. In respect of ground Nos. 1 and 2, the ld. AR submitted that these grounds of appeal are related to the proceedings under section 147/148. It was submitted that the assessment was illegal and against the law because the Assessing Officer has not supplied the copy of reasons recorded for issue of notice u/s. 148. The Assessing Officer is under legal obligation to supply the reasons for filing of suitable r....
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....nd of the assessment year for which the notice is issued, otherwise the entire assessment proceeding shall be treated as invalid and without issue of any notice. 6. It was submitted that the Assessing Officer in his remand report submitted on the objection to the assessee about supply of the reasons recorded for issue of notice u/s. 148. He submitted that the reasons were appraised to A.R. as per order sheet entry dated 12.10.2015 and 15.10.2015 but he didn't utter a single word about supply of reasons. The law requires supply of reasons not about the appraisal of reasons. 7. Per contra, the ld. D/R submitted that similar contentions were raised by the assessee before the ld. CIT(A) and the ld. CIT(A), after calling for the remand report from the Assessing Officer, has held that the said contention is not factually correct as the reasons for reopening the case of the assessee was duly brought to the notice of the assessee through the order sheet entry. In this regard, our reference was drawn to the findings of the ld. CIT(A) which read as under: "3.1.2(ii) During the appellate proceedings, the appellant challenged the reopening u/s. 147 of the Act. The submission....
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....ords, it has been gathered that before recording reasons that income has escaped assessment, the AO has issued notice u/s. 133(6) of the I.T. Act but the assessee did not comply with the same. It is evident that the information was available on ITD database regarding financial transactions made by the assessee during the year under reference. The assessee did not file his return of income for the year under reference. The assessee was specifically asked to explain the transactions reflected in ITS data and a specific query was raised by the AO but the same was remained unanswered by the assessee. Therefore, the contention of the assessee that the notice u/s. 148 of the I.T. Act was issued only on the basis of AIR information without any concrete evidences is totally incorrect. 3.5 Approval for issuing notice u/s. 148 of the I.T. Act was accorded by the Additional Commissioner of Income-tax, Range-2, Jaipur after considering the material available on records and duly satisfying with the reasons recorded by the AO. Thus, this claim of the assessee that the approval was granted by the Additional Commissioner of Income-tax without application of mind in mechanical manner is to....
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....uch proceedings and as such, no objections have been filed against such an action on part of the Assessing officer during the course of assessment proceedings. Therefore, where the reasons were never sought by the assessee at first place, the assessee cannot be allowed to take the plea that reasons were not supplied to him or the reasons have not been supplied within a reasonable period of time taking support from the directions of the Hon'ble Supreme Court in case of GKN Driveshafts (supra). The mandate of the directions and the course of action to be followed is that when the notice is issued u/s. 148, the assessee on receipt of such notice is required to file the return of income, where he so desires, he can seek reasons for issue the notice u/s. 148 and on such request of the assessee, the AO has to supply or communicate the reasons to the assessee and the assessee is at liberty to file objections and where such objections are filed, the AO is required to dispose off such objections by way of a speaking order. In the instant case, as we have held above, there is no requisition on part of the assessee seeking the reasons for issuance of notice u/s. 148 and therefore, the man....
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....h are going to be used against the assessee behind his back. Here in this case, during the course of assessment proceedings, the assessee again and again requested to provide the copies of the documents because the matter is quite old one and he is not having any proper details as required by the Assessing Officer. In support of this, we are enclosing herewith some letters by which the assessee has continuously requested to provide the copies of the documents and information so that the proper submission can be made to the satisfaction of Assessing Officer but he didn't provide the same and completed the assessment. 12. It was further submitted that during the course of assessment proceedings, the assessee has tried to explain the source of this amount by way of an affidavit of acknowledgment of gift by the mother of the assessee who has gifted Rs. 5,00,000/- (Five Lacs) to him but the ld. Assessing officer has not accepted the same without mentioning any cogent reasons and made the addition. It was submitted that during the course of assessment proceedings, the Assessing Officer never cross examined the deponent. He simply refused to accept the contentions made in the affid....
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....ther revealed from the Income & Expenditure ending on 31/3/2008 that the assessee has shown net profit of Rs. 1,08,700/- on total gross total receipts of Rs. 2,64,900/- from job work charges & brokerage on account of manufacturing of jewellery and the same income has been shown in the e-ITR filed in response to the notice u/s. 148. The assessee has failed to furnish complete details of job work charges & brokerage and claims of different expenses debited to the I&E Account. The AR has admittedly submitted that the assessee has no record in possession to explain the source of cash payment made towards credit card bills although he has time and again taken repeatedly a plea to provide certified copy of AIR/CIB data instead of explaining the source of the cash credit even after the data were shown to him vide order sheet entry dated 12/10/2015 during the course of assessment proceedings. The A/R has admittedly further submitted that the assessee did not remind to make cash payment towards credit, card bills. Moreover, the A/R has failed to explain the genuineness, identity and creditworthiness of the cash gift in form of an affidavit of mother of the assessee, who is a house lady havi....
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....ed. 17. It was further submitted that despite of several requests, the Assessing Officer not provided the copies of document or evidences he is having in his possession which was used against the assessee. This also shows the intention of the Assessing Officer against the assessee. The assessee is entitled to get all the evidences and copies of the documents which are going to be used against the assessee behind his back. Here in this case, during the course of assessment proceedings, the assessee again and again requested to provide the copies of the documents because the matter is quite old one and he is not having any proper details as required by the Assessing Officer. In support of this, we are enclosing herewith some letters by which the assessee has continuously requested to provide the copies of the documents and information so that the proper submission can be made to the satisfaction of Assessing Officer but he didn't provide the same and completed the assessment. 18. It was submitted that the Assessing Officer is under legal obligation to supply the evidences which he wants to be used against the assessee but despite of request of the assessee the same were not....
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.... DR has drawn our reference to the findings of the ld. CIT(A) which read as under:- "3.3.2 (i) It is seen that the AO made the addition on account of undisclosed investment in share transaction. It was noted by the AO that the appellant has shown income from job work charges and brokerage on account of manufacturing of jewellery in its return of income. However, no investment/income was shown in the return of income. It was submitted by the appellant before the AO that he has no record in his possession to explain the source in share transaction. In absence of any explanation/documentary evidences filed, the AO treated Rs. 4,74,040/- as income of the appellant from undisclosed sources. (ii) During the appellate proceedings, the appellant again failed to bring any evidence on record to explain the source of investment in share transactions. Considering this, it is held that the AO was justified in treating Rs. 4,74,040/- as income from undisclosed sources. Hence, this ground of appeal is dismissed." 22. We have heard the rival contentions and perused the material available on record. Admittedly, the addition of Rs. 382,079/- has been made basis reasons recorded ....
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.... Ashok K Chanara, name of the bank which has issued the credit card, the transaction amount of Rs. 3,82,079/- and date of transaction i.e., 31.03.2008. The question for consideration is whether this piece of information is sufficient enough to fasten the tax liability on the assessee. To our mind, the AIR information so received by the AO could be a starting point for further examination and verification and cannot by itself be held as conclusive and definite. Once the assessee has expressed his inability to provide the necessary explanation in view of the fact that the matter is pretty old and he doesn't remember making any cash payment and doesn't even have in his possession the necessary records in terms of bank and credit card statements and has requested the AO to share the relevant information in order to examine and submit necessary explanation, it was incumbent on part of the AO to carry out further enquiries directly with the bank and credit card company and sought details of the credit card number, in whose name the credit card has been issued, as to how two names are appearing in the AIR statement and also sought copies of detail of the transactions in form of tr....