TaxTMI 
TaxTMI 
2024 (3) TMI 1152
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....s of the case and in law, the Assessment order passed by converting limited scrutiny proceedings into full scrutiny without mandatory compliance of guidelines issued by CBDT is illegal and without jurisdiction. 2.2 That notice u/s 143(2) was issued for the purpose of limited scrutiny of verification of cash tax payments and the issue of other cash deposits being not part of reasons for issuing limited scrutiny notice, the impugned Assessment order passed without converting limited scrutiny into regular/full scrutiny by obtaining prior approval of Pr. CIT is not in accordance with mandatory CASS guidelines issued by CBDT. 2.3 That the Assessing Officer having not followed the proper procedure to convert the limited scrutiny proceedings into complete scrutiny proceedings, the Assessment Order is illegal and is liable to be quashed for disregarding the compulsory CBDT Instruction No. 5/2016 3. That the orders passed by the lower authorities are not sustainable on facts and same are bad in law. 4. That the appellant craves leaves to add, alter, amend, forgot any of the grounds of appeal at the time of hearing." 2. Apropos to the grounds of appeal,....
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.... issued by CBDT is illegal and without jurisdiction. 3.2 That notice u/s 143(2) was issued for the purpose of limited scrutiny of verification of cash tax payments and the issue of other cash deposits being not part of reasons for issuing limited scrutiny notice, the impugned Assessment order passed without converting limited scrutiny into regular/full scrutiny by obtaining prior approval of Pr. CIT is not in accordance with mandatory CASS guidelines issued by CBDT. 3.3 That the Assessing Officer having not followed the proper procedure to convert the limited scrutiny proceedings into complete scrutiny proceedings, the Assessment Order is illegal and is liable to be quashed for disregarding the compulsory CBDT Instruction No. 5/2016. 4 That the orders passed by the lower authorities are not sustainable on facts and same are bad in law. 2.1 The first ground raised by the Appellant is regarding the impugned addition of Rs. 29,60,000/- made by the Assessing Officer on the alleged ground of unexplained money u/s 69A of the Income Tax Act, 1961 without considering the explanation and documentary evidences furnished during the course of assessment proc....
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....withdrawal was for bonafide personal and medical use and redeposit of cash was due to announcement of demonetisation scheme and as such there is no justification for treating the same as unexplained. Further, the only source of income of the assessee is bank interest and capital gain and as such presumption regarding available cash being treated as undisclosed income is highly arbitrary and misconceived in the absence of any finding or corroboration. 2.5 In this connection, reference may be made to the following judgments enclosed in the Case Law- Paper Book: a) Jaya Aggarwal vs ITO [2018] 92 taxmann.com 108 (Delhi HC) Section 68 of the Income-tax Act, 1961 Cash credit (Bank deposit) Assessment year 1998-99 Assessee withdraw certain amount of cash from her bank account Said withdrawal was to buy property for which earnest money in cash was to be paid - As deal could not be fructified, a part of such amount was re-deposited in same bank account - Assessing Officer observed that sum was redeposited after more than 7 months, thus, treated same as unexplained cash credit and addition was made under section 68 Whether explanation given by assessee that deposit....
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....le. On careful perusal of the decisions relied by the Ld. D.R. we are of the view that the facts of the present case are clearly distinguishable as in the present case the explanation offered by the assessee is reliable and acceptable on the touchstone of the prudence of an ordinary man but merely on the ground that the act of assessee created huge interest liability on partnership firm does not enable revenue authorities to consider the cash withdrawn and it deposit to same bank account after a substantial gap of time, as unexplained income u/s 69 A of the Act. Hence, we reach to a conclusion that the AO made addition without any legal and justified reason which was rightly deleted by the CIT(A). Hence, both the grounds of the assessee are being devoid of merits and dismissed. d) Arihant Associates vs ITO [2024] 158 taxmann.com 7 (Raipur Trib.) (20-09-2023] Section 69A of the Income-tax Act, 1961 Unexplained moneys (Cash deposits) - Assessment year 2017-18 Assessee-firm made cash deposits totalling Rs. 33 lakhs in its bank account during demonetization period and claimed that cash deposits were sourced out of opening cash in hand of Rs. 52.47 lakhs available in i....
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....total available fund with assessee in cash was Rs. 42,38,100 before demonetization i.e., 8-11-2016 Whether taking into consideration entire withdrawals of family and also giving weightage to family expenses, demonetized cash deposit of Rs. 15 lakhs was to be treated as explained and thus, addition made by Assessing Officer was to be deleted - Held, yes [Para 5] [In favour of assessee) f) Sudhirbhai Pravinkant Thaker vs ITO [2017] 88 taxmann.com 382 (Ahmedabad - Trib.) Section 68 of the Income-tax Act, 1961 Cash credit (Bank deposit) Assessment year 2008-09 When assessee had demonstrated that he had withdrawn cash from bank and there was no finding by authorities below that this cash available with assessee was invested or utilized for any other purpose, it was not open to authority to make addition on basis that assessee failed to explain source of deposits [In favour of assessee) 2.6 In light of the above submission, we may request your Honor to kindly delete the impugned addition of Rs. 29,60,000/- as the cash deposits/tax payment are fully supported from the cash withdrawals made by the Appellant. 3.1 The second ground raised by the Appellant ....