TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 141
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....erly appreciating the facts of the assessee in as much as that the assessee having business income as whole sale dealer for sale of vegetables of farmers as commission agent, provision of section 68/69A has been wrongly applied. (2) The Ld. CIT(A). has grievously erred in law and on facts in not properly considering and appreciating the written submission dated 14/09/2022 submitted to him explaining the deposit made in the bank and thereby wrongly confirming the addition of Rs.1,74,31,100 made by A.O. (3) The learned CIT(appeals) has erred in law and on facts in confirming the addition without considering and appreciating the facts that return was selected for limited scrutiny for verifying cash deposit during demonetization period and the A.O. exceeded his jurisdiction of the said scrutiny rendering the assessment as erroneous. (4) He has also erred in law and on facts in upholding the cash deposit in the bank account u/s. 68/69A of the Act without appreciating the facts that the assessee as a wholesale dealer of vegetables of farmers involving cash sales and the deposits thereof in the banks cannot be treated as income. (5) He has also erred in law and on facts in uph....
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....1AAC of the IT Act shall stand initiated separately for addition u/s.68 of the IT Act. Accordingly, now this amount of Rs. 1,74,31,100/- is hereby added u/s.69A of the IT Act and is to be taxed u/s. 115BBE of the Income Tax Act. 5. Aggrieved assessee preferred an appeal to the Ld.CIT(A). 6. The assessee before the Ld. CIT(A) submitted that there was cash deposits and corresponding cash withdrawal which was utilized for future deposit in the bank account of the assessee. However, the AO without considering the withdrawal from the bank account has treated the entire amount of deposit in the bank as income of the assessee. 6.1 It was also submitted that the assessee, being a vegetable vendor, was dealing only in the cash transaction. As per the assessee, whatever amount of cash was deposited and withdrawn from the bank account was representing sale and purchase of vegetables. Therefore, the entire amount cannot be treated as total income of the assessee. According to the assessee, he has only earned commission income from the sale/purchase of vegetables. In the year under consideration, he has shown income from the trading of vegetables (net income of Rs. 2,50,100/-) in the indivi....
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.... as unexplained money/ cash credit under section 69A/68 of the Act. The action of the AO is clearly in violation of the instruction issued by the CBDT Circular No. 5 dated 17/07/2016. The relevant extract reads as under. 2. In order to ensure that maximum objectivity is maintained in converting a case falling under "Limited Scrutiny' into a 'Complete Scrutiny case, the matter has been further examined and in partial modification to Para 3(d) of the earlier order dated 29.12.2015, Board hereby lays down that while proposing to take up 'Complete Scrutiny' in a case which was originally earmarked for 'Limited Scrutiny, the Assessing Officer (AO) shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under 'Complete Scrutiny. In this regard, the monetary limits and requirement of administrative approval from Pr. CIT/CIT/Pr. DIT/DIT, as prescribed in Para 3(d) of earlier Instruction dated 29.12.2015, shall continue to remain applicable. 3. Further, while forming the reasonable view, the Assessing Officer would ensure that: a. there exists credible material or information available on....
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....ncome-tax Act, 1961 ('Act'). The procedure for handling 'Limited Scrutiny' cases shall be as under: a. In 'Limited Scrutiny' cases, the reasons/issues shall be forthwith communicated to the assessee concerned. b. The Questionnaire under section 142(1) of the Act in 'Limited Scrutiny' cases shall remain confined only to the specific reasons/issues for which case has been picked up for scrutiny. Further, the scope of enquiry shall be restricted to the 'Limited Scrutiny' issues? " c. These cases shall be completed expeditiously in a limited number of hearings. d. During the course of assessment proceedings in 'limited Scrutiny' cases, if it comes to the notice of the Assessing Officer that there is potential escapement of income exceeding Rs. five lakhs (for metro charges, the monetary limit shall be Rs. ten lakhs) requiring substantial verification on any other issue(s), then, the case may be taken up for 'Complete Scrutiny' with the approval of the Pr.CIT/CIT concerned. However, such an approval shall be accorded by the Pr.CIT/CIT in writing after being satisfied about merits of the issue(s) necessitating 'Complete Scrutiny....
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....assessee in the case on hand was not there in the case of co-owner namely Shri Harshadkumar Amrutlal Patel. Thus we are adjudicating the present appeal from altogether a different perspective. Thus, the question of taking the contrary view does not arise. 15. In the case of the other co-owner namely Shri Harshadkumar Amrutlal Patel there was the regular assessment under section 143(3) of the Act, whereas in the present case, it is the case of the Limited Scrutiny. Accordingly, we hold that the facts of the case on hand are different with the facts of the case in the case of Shri Harshadkumar Amrutlal Patel. As the issue involved is different, then the bench is not bound to follow the decision of the coordinate bench taken in the case of the co-owner. 16. The Ld.DR before us has not brought anything on record justifying that the "Limited Scrutiny" was converted by the Assessing Officer under normal scrutiny after obtaining necessary approval from the appropriate authority. 17. We are also not convinced with the argument of the learned DR that the issue raised by the AO is limited to the activity of the sale of the property only. It is because if we admit the contention of t....
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....vered in the notice issued under section 143(2)(i) for limited scrutiny was contrary to the provisions of the Act and, accordingly, was set aside. In view of the above and after considering the facts in totality as discussed above, we are not convinced with the finding of the authorities below. As such the entire issue should have been limited to the extent of the dispute raised in the notice under section 143(2) of the Act for the limited scrutiny but the AO in the present case has exceeded his jurisdiction as discussed above. Thus the ground of appeal of the assessee is allowed. 10.3 In view of the above, we hold that the AO while framing the assessment has exceeded his jurisdiction by making an addition of the cash deposit of the entire year as income of the assessee. Moving further, we note that the cash has been deposited during the demonetization period by the assessee for Rs. 16,56,500.00 which can only be considered for the purpose of determining the income. Admittedly, there were also withdrawals of cash deposit from the bank account as evident from the submission made by the assessee before Ld. CIT(A). The relevant extract of the submission of the assessee reads as u....
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....d. CIT(A), the assessee submitted that he is illiterate person and not well versed with the income tax proceedings. Therefore, there was reasonable cause and consequently the penalty should be waived off u/s 273-B of the Act. However, the Ld. CIT(A), confirmed the penalty levied by the AO by observing as under: I have gone through the grounds of appeal, statement of facts and submissions of the appellant. It is submitted that no physical notices are received. The assessing officer has submitted that online notices have been sent through ITBA. Hence, the contention of the appellant is not acceptable. Hence, the Assessing Officer is justified in the levy of penalty u/s.271A(1) (d) of the Income Tax worth Rs.20,000/-.The order of the Assessing Officer is confirmed and the appeal of the appellant is confirmed. 14. Aggrieved by this, the assessee has come up in appeal before us. 15. The ld. AR before us submitted that none of the notice was received by the assessee and so no compliance was made. According to the ld. AR, there was no intention of the assessee for non-compliance of the notices issued upon it. 16. On other hand, the learned DR before us vehemently supported the order....