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2017 (4) TMI 1636
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....for assessment year (AY) 2011-12. The facts and circumstances of the two cases being the same, raising common grounds of appeal, were posted for hearing and, accordingly, heard together, and are being disposed of per a common order, being also represented by the same counsel. 2. The only issue arising in these appeals is the maintainability or otherwise in law of the impugned order/s u/s. 263 of the Act. The sole premise thereof is a complete absence of enquiry by the Assessing Officer (AO) in passing the assessment orders and, in any case, as warranted in the facts and circumstances of the case/s. 3.1 It may be relevant to recount the background facts of the case/s. The assessment proceedings in either case were initiated by the issu....
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....ing. The source for cash deposits is stated as closure of previous loan. The assessment is completed as under: Total income as per return income : Rs. 28,88,950/- Addition : Nil Total income assessed : Rs. 28,88,950/-' (emphasis, by underlining, ours) 3.2 Further, examining the assessment records in both the cases, the ld. Pr. CIT notes the various replies furnished by the assessee/s in the course of the assessment proceedings. In both the cases, qua money lending business, which is stated to be the basis of the cash deposits in their respective bank accounts, it is stated that the source of the deposits is the closure of the previous loans, and that the assessee had not claimed any credit from any person, i.e., in e....
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....pects discussed by him in the body of his order, including ascertaining the source of the deposits made in the bank account/s under reference during the relevant year, after making necessary enquiries and verification, in accordance with law and after giving due opportunity to the assessee/s to present his case before him. 4. We have heard the parties, and perused the material on record. 4.1 Even as admitted by the ld. AR during hearing, the mention of the 'books of account' at para 2 (pg.1) of the assessment order/s is incorrect in-as-much as the assessee/s is admittedly not maintaining any books of account, and that only the bank account/s was produced. This, qua a critical aspect of the case, particularly considering the volume of ....
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....e is anything wrong with the order if all the facts stated therein are assumed to be correct. Why, in the present case, the assessment is not consistent even with what is stated in the return itself. No bills and vouchers stated to be accompanying non-existing books of account, were admittedly produced. It is also incomprehensible that the assessee is, as stated, not maintaining any books of account (in respect of the money lending business) and, in any case, that there is a complete absence of any record in respect of the advances made and recovered, as well as qua the interest/ commission earned in the process, and returned only on the basis of 'memory'. 4.2 The cash deposits in the bank account/s need to be satisfactorily explained, e....
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....or the source of the deposits during the current year. In both cases, as shall be readily seen, there is no finding by the AO - who merely records what the assessee/s states per its communications, as to whether it is indeed so, i.e., the cash deposits represent a receipt, along with interest, of the loans given earlier. Further, even going by the assessee's explanation, which could no doubt be true, or have a element of truth, so that the assessee's capital as invested in the said business, is rotated, the capital invested in the said business is liable to be estimated and brought to tax, i.e., apart from the income by way of interest/commission from the financing business. What is this capital? What is the amount of debtors (receivable) a....