TaxTMI 
TaxTMI 
2024 (5) TMI 1412
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....oceedings hence the entire proceedings u/s. 148 of the Act is illegal and bad in law. 2. That on the facts and circumstances of the case and in law, the Id. CIT(Appeals) has grossly erred in confirming the addition towards unexplained cash credit under section 69A of the Act to the extent of Rs. 31,94,312/- without considering the submissions and documents produced by the assessee appellant which is bad in law and illegal. 2.1 That on the facts and circumstances of the case and in law, the Id. CIT(Appeals) has grossly erred in not considering the fact that the amount of Rs. 86,87,000/- was deposited by assessee appellant out of the cash sale proceeds of her medical store. 2.2 That on the facts and circumstances of the case and in law, the Id. CIT(Appeals) has grossly erred in not considering the additional evidences submitted during the course of appellate proceedings, i.e., Trading Account, Profit & Loss A/c., Purchase and Sale account, etc. 3. The appellant craves leave to add, alter, modify or amend any ground on or before the date of hearing." 2.2 In ITA No. 413/JPR/2023 the assessee has raised following grounds:- "1. That on the facts and circumstances of the case a....
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....treated as "invalid". So, notice under section 143(2) cannot be issued by the system. 3.2 During the course of assessment proceedings, on perusal of bank account statement it is noted by the ld. AO that the assessee has deposited cash of Rs 86,87,000/- in her Uco bank account number 19340200000245 during the financial year 2011-12. The assessee has shown the turnover of Rs. 28,84,988 and the return of income was filed under section 44AD @ 8.2 % on total turnover of Rs. 28,84,988/- and thus, total income declared in the return of income comes to Rs. 2,36,430. The assessee was issued the show cause notice on 18/12/2019 and the assessee filled the reply dated 20/12/2019 contending that the reason is that the assessee is running a medical shop in name of M/s. Vipin Medicals, at Nayapura, Kota and cash deposit include the cash sales received from the retail customer. It was further contended that the assessee took a loan from 15 person totalling to Rs. 26,08,000/-. This explanation of the assessee is considered but not found convincing to the ld. AO as the assessee has not submitted cash book or cash ledger, Purchase bills and sales were not submitted for verification. However, copy of....
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..... 2608000/-. The AO not satisfied with the explanation accepted the cash deposit of Rs. 2500000/- as cash sales and added balance Rs. 61,87,000/- as unexplained cash deposit u/s 69A of the Act. 6.1 During the appeal proceedings the appellant filed the written submission which is placed on record. The appellant in its submission has stated that she is suffering from neuro disease and the accountant is maintaining the accounts and records of sale and purchases and at the appellate stage filed a revised working of the sales to accommodate its explanation of the cash deposit of Rs. 8687000/-. To support it the appellant also filed a copy of bank account, revised trading account etc. Further the appellant requested for admitting the additional evidence to support its grounds of appeal. The appellant in its revised working of trading account declared the sales of Rs. 1,12,82,838/-, purchase of Rs. 85,11,670/- and a gross profit of Rs. 2131746/- and a net profit of Rs. 929298/-. 6.2 The submission of the appellant is considered specifically with reference to admission of the additional evidences. The appellant's contention that the original return was filed by the accountant on th....
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....lant related to AY 2017-18 is also under progress wherein the appellant had submitted the same explanation. Therefore, the re-casted account submitted by the appellant are not reliable and are an afterthought hence rejected and are not admitted. 6.4 The submission is examined and the assessment order is perused. The AO noted that there is a cash deposit of Rs. 8687000/-. The AO after examining the submission has added Rs. 6187000/-, u/s 69A of the Act. The appellant further state that she has received Rs. 2608000/- as cash loan from friends. The following facts emerges that the Total cash deposit is of Rs. 8687000/-, cash sales are of Rs. 2884988/- and cash loan of Rs. 2608000. A total of Rs. [8687000- (2884988+2608000)] = Rs. 3194012/- stands unexplained and is treated as unexplained cash credit u/s 69A of the Act. Further the appellant has accepted the cash loan of Rs. 260800/- from relatives and friends and as stated by the AO that the assessee was not able to prove the genuinity of the credit accordingly the cash loan of Rs. 2608000/- is treated as unexplained cash credit and addition is sustained, further the AO is correct in initiating penalty u/s 271D of the Act for violat....
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....indly refer to above cited submit. You have requested to provide reasons recorded for reopening the assessment. Your request is considered and reasons recorded for reopening assessment proceedings for A.Y. 2012-13 are hereby provided to you. Further, you are requested to file replies/submission online on e- proceedings portal in future on or before 10.12.2019 regarding reopening the assessment proceedings. Encl:- copy of reasons of reopening assessment u/s 147/148 for A.Y. 2012-13. 5. That the enclosure of reason recorded as mention in the notice dated 06.12.2019 was never received by the assessee nor it was uploaded on the Income-tax India portal. 6. That I am stating the afore-said statement on oath that no reason recorder were received during the assessment proceeding and we could not file the objection for reopening the assessment proceedings. 7. That I had also highlighted this issue before the ld. CIT(A), however, he has totally ignored the same." Thus, when there is a no communication for the reasons so recorded to the assessee the subsequent assessment is required to be quashed. To drive home this contention the ld. AR of the assessee relied upon the decision of th....
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....er consideration and made addition of Rs. 61,87,000/- (86,87,000- 25,00,000) u/s 69A of the Act holding/ observing "During the course of assessment proceedings the assessee were given many opportunity to explain the source of these deposits but the assessee has failed to do". Also, the ld. AO made reference to the Joint Commissioner of Income-tax Range -2 kota for taking loan in cash by the assessee, aggregating to Rs. 26,08,000/- under section 26955 and 271D of the I.T. Act. The ld. AR of the assessee further submitted that the cash deposit totaling to Rs. 86,87,000/- made with the UCO Bank during the F.Y 2011-12 relevant to the A.Y 2012-13, it is submitted that since the assessee was suffering from neuro disease she could not explain the source of said cash deposit properly and correctly during the course of reassessment proceedings as no sufficient opportunity was allowed by the Id.AO. Only, one day time was allowed. Hence, after filing appeal, in order to ascertain the factual position, deep verification of ledger account of Sales/purchases, bank, was made. Bank account was also reconciled and noted with surprise that entire sales and Purchases not found to be recorded in the l....
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.... 147 of 1.T. Act was initiated by issuing notice u/s 148 of I.T. Act on 30.03.2019. Subsequently notice u/s 142(1) was issued to assessee along with specific questioner vide which the source of cash deposit of Rs. 86,87,000/- in UCO Bank was asked for in response the assessee submitted that he was running a retail medical shop at Nayapura, Kota The assessee has shown total turnover of Rs. 28,84,988/- and declaring net profit of Rs. 2,36,430/- u/s 44AD of the 1.T. Act. Further since the assessee has deposited of Rs. 86,87,000/- in the bank account maintained with UCO bank, she was asked about the source of the aforesaid cash deposit in his bank accounts. The assessee in his submission before the AO submitted the followings: 1. She has taken cash loan of Rs. 26,08,000/ during the year consideration in from 15 peoples whose details viz. name, PAN No. and the amount was furnished in tabular form before the AO. 2. The assessee declared the profit of Rs. 2,36,430/- from turnover of Rs. 28,84,988/- but sales leder A/c and cash ledger A/c were not produced/submitted/uploaded for verification. Further the assessee submitted that the cash was deposited out of the cash sales. Therefore ....
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....the Hon'ble Bench and the submission/ evidences filed before the Ld. CIT (A) have already been considered by the CIT(A) under Rule 46A and rejected. Hence it is requested to the Hon'ble Bench that the order of Assessing Officer or Id. CIT(A) be upheld since the same was passed considering the submission of the assessee before the Assessing Officer." 7. We have heard the rival contentions, perused the material placed on record. The bench noted that during reassessment proceedings, the ld. AO was requested to provide reasons recorded for issuance of notice under section 148 of the act. Despite this specific request made by the assessee to the learned assessing officer, the ld. AO did not provide any reasons recorded for issue of notice under section 148 of the Act. Although, after the expiry of reasonable time of providing reasons to the assessee, the ld. AO vide letter dated 06/12/2019, uploaded on e-filing portal communication reference ID100021349803 where in the ld. AO mentioned that "You have requested to provide reasons recorded for reopening the assessment and reasons recorded for reopening assessment proceedings for assessment year 2012-13 are here by provided to you....
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....e and also did not deal with the specific ground raised by the assessee. In our view, the AO was bound to furnish reasons recorded by him within a reasonable time as has been held by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. vs ITO (supra) wherein the Hon'ble Court held as under:- ''5. We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice u/s 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. .In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the above said five assessment years.'' As per record, since the reasons recorded for reopening of the assessment were not furnished....
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....bove order of Karnataka High Court (supra) has also been dismissed by the Hon'ble Supreme Court reported in (2019) 262 Taxman 16. Therefore considering the totality of the facts and circumstances of the case and keeping in view the legal proposition as discussed above, we hold that recording of reasons before initiation of reassessment proceedings and communication thereof to the assessee is sine qua non as held by the Hon'ble Supreme Court (supra) that goes to the root of the matter and confers or deprives the assessing authority of the jurisdiction to undertake such reassessment proceedings, as the case may be. In the present case, admittedly such reasons were not supplied to the assessee during the contemporary period before going ahead with the reassessment proceedings. Therefore, in our view, the reassessment proceedings initiated and consequential order passed by the AO and appeal order passed by the ld. CIT(A) are not justified and, therefore, we quash such reassessment order. Therefore, the ground raised by the assessee is allowed and consequential appeal of the assessee is also allowed with no order as to cost. 3.0 In the result, the appeal of the assessee is allowed." ....
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.... the IT Act. It was also filed that cash was deposited out of sale proceeds from day to day business activity. It has been noticed that the assessee has deposited the cash amount in the UCO bank account for an amount of Rs. 1,27,55,100/-. The assessee was asked to provide the details of cash deposited in bank account during the period 01.04.2016 to 31.03.2017 and demonetization period from 09.11.2016 to 30.12.2016. The assessee or her authorized representative has submitted the details of cash deposited in banks accounts during the demonetization period, source of income & funds, bank statements which is placed on records. The assessee has deposited cash of Rs. 17,02,500/- in her bank account during the demonetization period. 13. During the assessment proceeding a show cause notice dated 19.06.2019 was issued to her asking the details such as copy of VAT return and Item wise and date wise cash sales details. If the same is not submitted then cash deposited during demonetization will be treated as unexplained. Again, notice u/s. 142(1) was issued on 07/12/2019 asking the assessee to supply various details listed at sr. no 1 to 7 in the said notice. On 19/12/2019 a show cause notice....
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....he business. The ld. AO accepted cash deposits of Rs. 60,00,000/- from cash sales and balance cash deposits of Rs. 67,55,100/- (1,27,55,100- 60,00,000) was treated as unexplained money under section 69A of the Act. Considering overall facts of the case, addition of Rs. 67,55,100/- (Including cash of Rs. 17,02,500/- deposited during demonetization period) made in assessed income of the assessee under section 69A of the IT Act, 1961. 15. Aggrieved from the above addition made in the retuned income of the assessee the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised, the relevant findings of the ld. CIT(A) is as under:- 6. Decision The appellant in its ground of appeal has assailed the AO the addition made of Rs. 67,55,100/- u/s 69A of the Act. The AO in the assessment order framed u/s 143(3) of the Act noted that the appellant had filed its ROI on 09.08.2018 declaring a total income of Rs. 802300/- . The AO in the assessment order noted that the assessee had shown a turnover of Rs. 7018942/- and net profit of Rs. 579763/- u/s 44AD of the Act. The AO further noted that there is a deposit of cash of Rs. 1,27,55,100/- in assessee's bank accou....
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....les have increased to Rs. 17289892/- and the net profit Rs. 1390915. It can be seen that the appellant's profit ratio remains the same at around 8% declared in the original ROI and at the appellate stage when it has filed the supposedly corrected trading account. The appellant has not submitted any substantive reason other than to state that the accountant committed the mistake. This is a substantive error, therefore the submission of the appellant in its revised computation and trading account is not acceptable. If the appellant thought of the error, it could have revised the return or have submitted the same before the AO during the assessment proceedings. The assessee took chance and when the explanation of the assessee was not found acceptable by the AO the assessee came up with this explanation at the appellate stage. It is to be noted here that another appeal of the appellant related to AY 2012-13 is also under progress wherein the appellant had submitted the same explanation. Therefore, the re-casted account submitted by the appellant are not reliable and are an afterthought hence rejected and are not admitted. 6.4 The submission is examined and the assessment order is....
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....of sales Rs. 1,72,89,892 (iii) Cash deposit-in UCO Bank account of cash sales mentioned-above-(ii) Rs. 1,28,69,720 In support of above claim/details, following documents are submitted as additional evidences and for which separate application is filed as per the provisions of Rule 46A of Income Tax Rules, 1962 before the ld. CIT(A) (i) Revised Trading & Profit and Loss A/c. (ii) Revised Computation of Total Income. (iii) Revised monthly summary of cash available for the F.Y. 2016- (iv) Affidavit of the assessee. (v) Copy of Ledger Account- Purchases-F.Y. 2016-17. (vi) Prescription slips of Doctor. (vii) Copy of Ledger Account- Sales-F.Y. 2016-17. (viii) Bank Account Statement-Account no. 19340100005009- UCO Bank- F. Y. 2016-17 (ix) Bank Account Statement -Account no. 66231010007367 - Bank of India-F.Y. 2016-17 (x) Copy of Ledger Account-Bank Account No. 19340200000245-UCO Bank F.Y 2016-17 (xi) Copy of Ledger Account-Bunk Account No662320110000067-Bank of India-F.Y. 2016-17. (xii) Copy of Ledger A/C-Bank Account no. 66231010007367 - Bank of India-F.Y. 2016-17 . (xiii) Copy of Ledger A/C-Bank Account no 19340100005009- UCO Bank-F.Y. 2016-17. Apart from....
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....sideration from 18 peoples, whose details viz. name, PAN no. and the amount was furnished in tabular form before the AO. Some confirmation letters were also uploaded but the creditwornthiness of loan givers were not prove by the assessee. 2. The assessee further submitted that the cash amount of Vipin Medicose (Prop. Akash Chakravarty) was deposited in the bank account of the assessee. The assessee stated that the Vipin Medicose is sister concern of the assessee and the firm was not having any current account. The parties from whom the purchase were made were demanding for the payment on regular basis. This explanation not supported by conclusive evidence. The assessee has to produce details of the purchases and sales of the Vipin Medicose to substainance her claim. Cash ledger A / c of Vipin Medicose is not submitted/uploaded for verification. Therefore the AO did not found any force in the arguments of the assessee. 3. The assessee declared the profit of Rs. 5,79,763/- from turnover of Rs. 70,18,942/- but sales ledger A/c and cash ledger A/c were not submitted/uploaded for examination. Copy of VAT return is also not submitted for examination. Therefore in absence of the accou....
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.... CIT(A) as per provision of rule 46A of the I.T. Rules 1962. There is no infirmity in the order of the Id. CIT(A). The assessee has taken the same plea before the Hon'ble Bench which was rejected by the CIT(A) after due consideration. The asseseee has not submitted any evidences under Rule 29 before the Hon'ble Bench and the submission/ evidences filed before the Ld. CIT(A) have already been considered by the CIT(A) under Rule 46A and rejected. Hence it is requested to the Hon'ble Bench that the order of Assessing Officer or Id. CIT(A) be upheld since the same was passed considering the submission of the assessee before the Assessing Officer." The ld. DR in addition to the written submission vehemently argued that assessee when caught depositing cash more than turnover coming with the different fact then what is submitted in the assessment proceeding and therefore, he supported the finding of the ld. CIT(A) in rejecting the additional evidence submitted by the assessee. 19. We have heard the rival contentions and perused the material placed on record. The apple of discord in this case is that based on the facts and circumstances of the case whether the deposit of cash....
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....f Rs. 1,27,55,100/-. The assessee also said that they have accepted a cash loan of Rs. 30,57,000/- from relatives and friends. That submission of the assessee in the assessment record contradicts with the facts presented in the form of additional evidence stating that the turnover of the assessee is Rs. 1,72,89,892/- and accordingly profit @ 8% where prayed to be considered but the ld. CIT(A) hold that the assessee has not submitted any substantive reason other than to state that their accountant committed the mistake as this was considered as substantive error the submission of the assessee filing revised computation and trading account was not accepted by the ld. CIT(A). The bench noted that the assessee regularly files the return of income. It is also not disputed that the nature of business carried out by her from 2006 i.e. year when her husband left heavenly abode. The ld. AR of the assessee heavily drawn our attention to the fact that the assessee is in fact suffering Neuro disease and she remain present in the open court and her medical condition was explained to defend the substantive error made on her part. She explained in person that she was misguided by the accountant ....