TaxTMI 
TaxTMI 
2023 (3) TMI 477
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....ts and circumstances of the case. 2. That in any view of the matter the assessing officer had no jurisdiction to pass block assessment order in absence of valid action u/s 132 of the income tax act as well as mandatory requirements were also not complied with for framing a legal and valid assessment therefore the assessment and assessing officer's action as confirmed by the Commissioner of Income Tax (Appeals) are totally unjustified and invalid. 3. That in any view of the matter undisclosed income/undisclosed investment was not determined on the basis of any search material and the lower authorities simply proceeded as if it is a normal assessment therefore the assessment so framed and confirmed is unjustified and illegal. 4. That in any view of the matter the Commissioner of Income Tax (Appeals) has erred in confirming a part sum of Rs. 1,80,000.00 out of the addition of Rs. 3,00,000.00 on account of low withdrawal for house hold expenditure made by the assessing officer by ignoring the correct facts of the case, which is highly unjustified and illegal, hence part of the addition as maintained deserves to be deleted. 5. That in any view of ....
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....e of the appeal by hearing the learned DR. 5. Ground no. 5 is regarding the addition sustained by the learned CIT(A) of Rs. 6,70,000/- on account of unexplained cash found during the course of search and seizure action. There was a search and seizure action under section 132 of the Income Tax Act carried out on 27.08.2009 in the business and residential premises of M/s Kesarwani Zarda Bhandar group cases and its partners. Since, the assessment year under consideration was the year of search therefore, the assessment was completed under section 143(3). The AO has recorded in the assessment order that during the course of search and seizure proceedings cash amounting to Rs. 6,70,000/- was found from the possession of the assessee but was not seized as per annexure 5 of the panchnama stated to be belonging to the assessee. In the statement under section 132(4), the assessee explained the source of said cash as withdrawal from M/s Kesarwani Zarda Bhandar from time to time. During the assessment proceedings, the assessee was again asked to explain the source of said money and in reply, the assessee submitted that the assessee gave a sum of Rs. 12 lac to her daughter and son-in-law fo....
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....roceedings. The assessee has explained that the source of money is withdrawn from M/s Kesarwani Zarda Bhandar however, in between the assessee has given a sum of Rs. 12 lac to her daughter and son-in-law which was later received back. Therefore, it was the money of assessee and not any loan or advance taken from anybody. The learned AR has further submitted that the facts remain that this amount of Rs. 6,70,000/- found at the time of search was out of withdrawal made by the assessee from the bank from time to time which was out of the amount received from M/s Kesarwani Zarda Bhandar. The AO and the CIT(A) has discarded the opening and closing balance and treated the same as nil, despite the assessee has sufficient cash balances. He has referred to the cash flow statement at page no. 22 of the paper book and submitted that the assessee was having sufficient cash even after making the deposits in the bank account. The learned AR contended that the assessee has been regularly filing return of income which were subjected to scrutiny under section 143(3) of the Income Tax Act for last so many years wherein the assessee has been declaring the income ranging from Rs. 18 to 28 lacs. Theref....
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....enses. The size of the family of the appellant consisted of self, his Wife, and two school going children. The appellant was residing in his own house at Sahson, Allahabad which is 20Km away from the city of Allahabad and is the remote and backward area. During the year under consideration the appellant had shown no withdrawals for house hold purposes while her husband had also shown no withdrawals for household expenses. The appellant had however furnished a cash flow chart before the AO showing withdrawal for the AO showing withdrawal for household consideration at Rs 150,000/- but the AO did not accept the same. The cash flow chart submitted by the reveals the opening cash balance of Rs 985,671/-5 withdrawal from bank of Rs 755,000/-. Against this the only outgoing was Appellant for FY 2008-09 on account of house hold expenditure of Rs 150,000/- resulting in closing as on 01-04-2008 and cash balance of Rs 15,90,671/- as on 31-03-2009, However no expenditure on "Terahavin bhoj" performed after the death of Late Bhairo Nath Kesarwani, who died on 29-10-2008, was reflected in the said cash flow chart of the appellant for FY 2008-09. In the assessment orde....
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.... the appellant to have cash balance of Rs 985,671/- in hand as on 01/4/2008 particularly when there is no evidence with the department to show where the same was utilized elsewhere and was not available with the appellant in the year under consideration .The amount withdrawn from bank shown at Rs 755,000/- appearing in cash flow statement of the appellant has not been doubted by the AO but the same was not considered by the AO for the purpose of house hold expenses without any reason. Accordingly, the opening cash balance shown in the cash flow chart of the appellant for the year under consideration at Rs 985,671/- is accepted as correct. The family of the appellant owns agriculture land and agriculture produce is consumed by the family members. Further the appellant was living in family owned household for which no rent is required to be paid. The appellant was residing at Phaphamau, Allahabad which is above 20Km from Allahabad city. Further there is no evidence that the appellant had a high standard of living and that her house hold expenditure was high. The appellant also stated that she was not member of any club. The husband of the appellant late Bhairo Nath ....
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....ime. However, during the assessment proceedings the assessee explained that some months ago her daughter and son-in-law had asked for money for purchase of house property and she had given Rs 12,00,000/- (viz- Rs 700,000/- was given in the month of June,08 and Rs 500,000/- was given in January, 2009) without any interest. The said amount of Rs 12,00,000/- was returned back in the month of May 2009 by her daughter and son- in- law. Subsequently Rs 570,000/- was deposited in the account in Allahabad bank, Allahabad in June, 2009 and the remaining amount of Rs 600,000/- was available at home which was found during the course of search proceedings. The appellant filed confirmation of Shri Amit Shyam her son-in-law in this regard. The AO however did not accept the above explanation of the appellant because during the course of search proceedings, the statement of the appellant was recorded u/s 132(4) of the Act wherein vide question numbers 15 and 16, the appellant had denied having received or borrowed any cash/jewellery from anybody for business purposes or otherwise. Had the explanation about the source of cash found at the time of search given by the appellant in the assess....
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....rder the AO had given the details of expenditure incurred in pages of annexure A-2/25 which total to Rs 16,15,637/-. As per the written submission dated 31-10-2011 of Shri Amit Kumar Kesarwani, son of assessee's daughter submitted in his case, the annexure A-2/25 and A-2/27 found and seized from the residential premises of the appellant pertains to the expenditure incurred by the appellant on the final rights performed on the death of late Bhairo Nath Kesarwani who died on 29-10- 2008 and the Bhoj organized by her for Brahamins and others in this connection. Further vide question no. 14 of his statement recorded during assessment proceedings, Shri Amit Kesarwani had stated that the expenditure as per pages of annexures were met by the appellant from the amount withdrawn from her saving bank accounts. In view of the above admission of Shri Amit Kumar Kesarwani, the said documents namely annexure A-2/25 and A-2/27 found and seized at the time of search cannot be said to be dumb documents as claimed by the appellant. Accordingly in view of the categorical statement of Shri Amit Kumar Kesarwani and the seized document A-2/25 as above, it is held that Rs 16,15,637/- was inc....
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.... time of search belonging to the appellant is held to be unexplained and accordingly the addition of Rs 670,000/- u/s 69A of the Act is confirmed." 11. Thus, the finding of the CIT(A) is based on the facts that the closing cash balance for the assessment year 2009-10 was held as nil and therefore, there is no opening balance as on 1.4.2009. When the assessee has not challenged the order of the CIT(A) for the assessment year 2009-10 then the said finding of the CIT(A) remained unrebutted and consequently the opening balance claimed by the assessee as on 1.4.2009 cannot be accepted. Accordingly, we do not find any error or illegality in the order of the CIT(A) qua this issue. 12. Ground no. 6 is regarding enhancement of assessment to the tune of Rs. 05,70,000/- on account of cash deposited by the assessee in the saving bank account with Allahabad Bank. The learned AR of the assessee has submitted that the assessee has been receiving the entire income from M/s Kesarwani Zarda Bhandar in her bank account and the amount which was deposited in the bank account was out of the withdrawals made by the assessee from the bank account from time to time in the earlier years. He has furthe....
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....said enhancement notice was sought by 30.07.2014, but the reply was not received till the date of passing of the said appellate order on 27.08.2014. Accordingly, the said appellate order is being rectified suo-moto u/s 154 of IT Act. the appellant was given an opportunity of being heard when the authorized representative of the appellant Sh. Sanjay Gupta FCA attended and gave his no objection to the proposed rectification of the date of the appellate order. It is accordingly directed that the date of the said appellate order in appeal no. 428/JCIT/CC/ALLD/2011-12 in the case of the appellant for AY 2010-11 may be read as 27.08.2014 in place of 27.06.2014. Sd/- (Sandeep Chauhan) OSD Commissioner of Income Tax (Appeals) Allahabad Copy forwarded to the- CIT/Addl. CIT/JCIT Range/AO/Appellant Sd/- (Sandeep Chauhan) OSD Commissioner of Income Tax (Appeals) Allahabad" 15. Therefore, so far as the ambiguity in date of order and the show cause notice issued by the CIT(A) is concerned, the same is now clear by way of this rectification order whereby the typographical error in respec....
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.... of cash deposit of Rs 570,000/- in your bank account no. 109238 in Allahabad bank should not treated as unexplained expenditure u/s 69C and unexplained investment u/s 698 of IT Act respectively and added back to your income. You should furnish your reply on the date fixed for hearing on 30-07- 2014." However no reply has been received from the appellant till date. Therefore I have no option but to decide the appeal on the basis of material available on record. The unexplained cash found during the course of search operation u/s 132 of the Act amounted to Rs 670,000/- and was therefore not available for making the deposit of Rs 570,000/- in Allahabad Bank S B a/c no. 109238 of the appellant. The addition of Rs 670,000/- on account of the said unaccounted cash found during the course of search has already been confirmed as above. Further, as per the revised cash flow statement of the appellant for F Y 2009-10 drawn above, the appellant had no cash in hand available for making the cash deposit of Rs 570,000/- in Allahabad Bank S B a/c no. 109238 and therefore the same is held to have been made out of undisclosed sources of income of the appellant. ....