TaxTMI 
TaxTMI 
2024 (1) TMI 1078
X X X X Extracts X X X X
X X X X Extracts X X X X
....sactions a letter dated 15.11.2017 was issued to the assessee asking for explanation. In response, the assessee vide his letter dated 27.11.2017 explained that his family members mainly depend on agricultural activities and family members living in Village Daiya - Tal. Gondal, Dist. Rajkot. The assessee explained the cash deposit in the bank account was on account of sale of his late father's property which was purchased by his father on 17.01.1985. Originally, two plots, namely, Plot Nos. 55 & 56 were sold to Devjibhai Gowabhai Pardwa & Gitaben Devjibhai Pardwa for a consideration of Rs. 14,50,000/-. The assessee received entire sale consideration by way of cash and deposited Rs. 14,00,000/- on 09.07.2010 in his Citizens Co-operative Bank Ltd., Dhoraji. The above sale agreement was entered by the assessee, his mother and other six legal heirs. However, sale deed could not be executed because of dispute between the family members. It is thereafter the sale consideration of Rs. 14,00,000/- was returned back to the purchasers on 02.08.2010 of Rs. 3,00,000/- and Rs. 11,00,000/- on 16.08.2010. Confirming the same a Notarized Affidavit dated 21.12.2018 from the purchasers, namely, Devji....
X X X X Extracts X X X X
X X X X Extracts X X X X
....this case no return of income was filed for the year under consideration accordingly, in this case, no assessment was made and the only requirement to initiate proceedings u/s. 147 is reason to believe which has been recorded above. It is pertinent to mention here that in this case the assessee has chosen not file return of income for the year under consideration although the total income of the assessee had exceeded the maximum amount which is not chargeable to tax as discussed in paragraph 6 above and the assessee was assessable under the Act. In view of the above, the provisions of clause (a) of Explanation 2 of Section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment. In view of the above facts, I have reason to believe that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. In this case more than FOUR years have lapsed from the end of assessment year under consideration. Hence, necessary sanction to issue notice u/s 148 of the Act has been obtained separately from the Pr. Commis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d into by the assessee was not on stamp paper and the notarized affidavit filed by the assessee is only an afterthought, thereby confirmed the addition made by the AO. Further, the Ld. CIT(A) also confirmed the interest income received from bank deposits. Thus, the Ld. CIT(A) confirmed the entire additions made by the AO and thereby dismissed the assessee's appeal. 7. Aggrieved against the Appellate order, the assessee is in appeal before us raising the following grounds of appeal: "1. That, the Learned CIT(A) has wrongly confirmed reopened assessment u/s. 148 of the I.T. Act, 1961. 2. That, the Learned CIT(A) has wrongly confirmed addition of Rs. 1,70,848/- on account of long term capital gain. 3. That, the Ld. CIT (A) has wrongly confirmed addition of Rs. 14,00,000/- on account of unexplained cash deposits. 4. That, the Ld. CIT(A) has wrongly confirmed addition of Rs. 33,717/- on account of interest income. 5. That, the Ld. AO has wrongly confirmed the initiation penalty proceedings u/s 271(1)(c) and 271F of the I.T. Act, 1961. 6. That, the Ld. CIT(A) has wrongly confirmed the interest charged u/s 234A and 234B of the I. T.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....223/204 Taxman 115 (Mag.) 17 taxmann.com 138 (Delhi) * Shri Ghanshyam (ITA No. 238/Agra/2018) (Agra ITAT) * M/s. Virat Credit & Holdings Pvt. Ltd. (ITA No.89/Del./2012) (Delhi ITAT) * Tara Alloys Ltd. (2018) (Del Trib) (ITA No.2421/Del/2017) * Shri Mayurbhai Magaldas Patel v. ITO (Ahd. Trib.) (ITA No. 3451/Ahd/2014) 11. We have perused the material available on record including the "Reasons recorded" by the AO and sanction/approval granted by the PCIT-2, Rajkot. This assessment was reopened beyond 4 years period but within 6 years period, whereas the assessee failed to file his statutory return under Section 139(1) of the Act, even though, the assessee was liable to pay his share of long term capital gain on sale of the plots during the assessment year. Though, the AO has not recorded the bank name and bank account details in the reasons, but the assessee in its reply clearly stated the cash transaction in the bank account pertaining to the Citizens Cooperative Bank Ltd., Dhoraji Branch with Account No. 471081001000308. The Hon'ble Supreme Court in the case of ITO vs. Lakhmani Mewal Das (1976) 103 ITR 437, held as follows: "the reason....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t be something which indicates, even if not establishes, the escapement of income from assessment. It is only on this basis that the Assessing Officer can form the belief that an income has escaped assessment. Merely because some further investigations have not been carried out, which, if made, could have led to detection to an income escaping assessment, cannot be reason enough to hold the view that income has escaped assessment. It is also important to bear in mind the subtle but important distinction between factors which indicate an income escaping the assessments and the factors which indicate a legitimate suspicion about income escaping the assessment. The former category consists of the facts which, if established to be correct, will have a cause and effect relationship with the income escaping the assessment. The latter category consists of the facts, which, if established to be correct, could legitimately lead to further inquiries which may lead to detection of an income which has escaped assessment. There has to be some kind of a cause and effect relationship between reasons recorded and the income escaping assessment." 11.2 Thus, in our considered opinion the reasons ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rty was purchased by the assessee's father on 17.01.1985 for a sale consideration of Rs. 11,200/- only and the assessee claim of Rs. 3,48,000/- as land development charges without even proper evidences which is not sustainable in law. The registered sale deeds also does not describe that the plots were being surrounded by compound walls as on the date of sale in 2010. In the absence of any such details, we do not find any infirmity in the computation made by the AO and the assessee also failed to produce proper evidence in support of the claim of expenses incurred by the assessee. Therefore, this ground no.2 raised by the assessee is hereby rejected. 14. Regarding Ground No.3, addition of Rs. 14,00,000/- on account of unexplained cash deposit. Though, the CIT(A) confirmed this addition solely on the ground that the sale agreement was entered by the assessee not in a stamp paper, but only in a white paper without even any witnesses and without mentioning the date of receipt of cash. However, perusal of the bank account of the assessee clearly shows that this amount of Rs. 14,00,000/- was deposited in the bank account on 09.07.2010 by the assessee and withdrawn cash of Rs. 3,00,00....