TaxTMI 
TaxTMI 
2023 (1) TMI 627
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....sioner of Income Tax (Appeals) XXVIII, New Delhi has grossly erred both in law and on facts in upholding the assumption of jurisdiction by the AO to frame the impugned assessment despite the fact that both the initiation of proceedings u/s 147 of the Act and assessment framed u/s 143(3) of the Act dated 31.3.1998 were illegal, invalid on account of the following reasons: i) That notice u/s 148 dated 19.09.1997 was served on the chartered accountant of the assessee and not on the assessee; ii) That no reasons were recorded prior to the issue of notice u/s 148 of the Act; iii) That no notice u/s 143(2) of the Act was issued prior to the framing of assessment u/s 143(3) of the Act dated 31.03.1998; 1.1. That the conclusion of the learned Commissioner of Income Tax (Appeals) that aforesaid ground raised are too late in the day as original order of assessment has been upheld by Tribunal and order of Tribunal has acquired finality overlooks the following judicial pronouncements relied upon by the appellant: a) 113 ITR 22 (Guj) P.V. Doshi vs. CIT b) 194 ITR 548 (Born) Inventors Industrial Corpn. Vs. CIT c) 281 ITR 366 (All) Ab....
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....und of litigation. In the earlier round, the matter travelled upto Tribunal and the Tribunal was pleased to restore the issue back to the Assessing Officer ("AO") for re-consideration. However, the AO yet again assessed the income at Rs.1,41,36,186/- vide order 24.12.2009 u/s 144 of the Income Tax Act, 1961 ("the Act"). 4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A) who vide impugned order dated 18.03.2013 partly allowed the appeal of the assessee. Thereby, on merit of the addition, Ld.CIT(A) granted substantial relief to the assessee. However, Ld.CIT(A) rejected the grounds related to validity of reopening of the assessment. 5. Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal. 6. Apropos to Ground Nos.1 & 1.1, Ld. Counsel for the assessee vehemently argued that Ld.CIT(A) was not justified in rejecting the grounds, related to issue of notice u/s 148 of the Act. He contended that before the authorities below, the assessee had taken specific ground that it had not received any notice and the notice u/s 148 of the Act was served upon its Chartered Accountant and not upon the assessee. He relied upon various ca....
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.... Rekha Gupta, Proprietor of M/s Akriti Investments and Sh. SKC, assessee who is managing the group, however, were not able to 'explain the source of cash deposits in this bank account during their statement recorded u/s 131. He however confirmed in his statement dated 8.8.1995. "this diary is mostly in the hand writing of Mr. Rakesh Kumar, my Asstt. And in this diary transactions of all companies managed and controlled by us have been mentioned." 12.2 The AO has made the said addition by observing that wife of the appellant Mrs. Rekha Gupta is a mere graduate without having any proper background in the account/finance/share transactions. She is basically a house wife and, knew nothing about the business as his evident from her statements. The statement of Smt. Rekha Gupta recorded' u/s 131 on 11.12.1995 is not only very only interesting but revealed too. Extracts are reproduced below:- "I do not know that, account No. of Akriti Investments when opened I cannot tell and what types of transactions are made in it, I do not know anything." 16. When asked about loans given on her behalf of her companies of which she is a Director and what rate....
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....is not tenable, keeping in view the statement of Mrs. Rekha Gupta and, appellant. However as I have held above that assessee is engaged in the business of giving hawala loans I hold that Mrs. Rekha Gupta wife of the appellant was only another entity of the appellant. I thus direct that 5% commission be also applied on the amount assessed as income. Hence out of an addition of Rs. 90,38,572/- addition of Rs. 4,51,930/- is confirmed and appellant gets relief of Rs. 85,86,642/ - and ground is partly allowed." 12. The only grievance of the assessee is the rate of commission applied by the authority below. The AO had infact made addition of the entire sum of Rs.90,38,672/- on the substantive basis in the hands of the assessee and the protective basis in the hands of the wife of the assessee. So far the decision of Ld.CIT(A) for applying 5% of the total addition as income of the assessee is backed by binding precedents. The Ld.CIT DR could not controvert the finding of Ld.CIT(A) by bringing any other binding precedents to our notice. Therefore, the decision of Ld.CIT(A) for estimating commission income cannot be faulted. However, under the identical facts, the Co-ordinate Bench of the....
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.... deposits in the bank account. 18. Ld. Counsel for the assessee submitted that Ld.CIT(A) was not justified in sustaining the addition. The assessee does not wish to press Ground No.5 due to smallness of the amount of addition. However, he submitted that looking to the smallness of the amount of addition, Ground No.5 raised by the assessee is dismissed as not pressed. 19. Ground No.6 raised by the assessee in respect of levy of interest Rs.7,88,126/- u/s 234A of the Act, Rs.5,40,116/- u/s 2344B of the Act and Rs.288/- u/s 234C of the Act. The levy of interest is consequential in nature, we hold accordingly. 20. In the result, the appeal of the assessee is partly allowed. ITA No. 3740/Del/2013 [ Assessment Year : 1995 - 96 ] 21. Now, we take up the Revenue's appeal in ITA No. 3740/Del/2013 for the Assessment Year 1995-96. The Revenue has raised following grounds of appeal:- 1. "In the facts and circumstances of the case, the Ld. CIT(A) grossly erred in restricting the addition made by the AO on account of cash deposits to only 5% of the total deposits even though the assessee has not provided plausible explanations with the necessary documentary evidences. ....