AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 534
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.... on the facts of the case in framing the assessment order u/s 144 of the Act dated 03.12.2019 without affording adequate and reasonable opportunity and even without complying with the mandatory statutory requirement of law. The impugned order having been framed in gross breach of natural justice, kindly be quashed. 3. The Ld. AO/ NFAC seriously erred in law as well as on the facts of the case in not adhering to the mandatory procedure statutorily prescribed u/s 144B of the Act hence the impugned order so passed deserves to be quashed being in violation thereof. 4. Rs. 27,70,909/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the addition made on account of the investment in/acquisition of the fixed assets of Rs. 27,70,909/ -. The addition so made and confirmed by the CIT(A) being contrary to provisions of law and facts may be kindly deleted in full. 5. Rs. 7,37,657/-: The ld. CIT(A) further erred in law as well as on the facts of the case in confirming the disallowance of interest paid on account of loan of Rs. 7,37,657/ -. The disallowance so made and confirmed by the CIT(A) being contrary to the provisions of law and the....
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....) of the IT Act, 1961 issued on 22.07.2019 fixing the case for hearing on 02.08.2019. No compliance made by the assessee. Thereafter notice u/s 144 of the IT Act, 1961 was issued on 21.08.2019 fixing the case for hearing on 30.08.2019. In compliance to this notice Sh. Raman Kumar Saini, CA/AR of the assessee attended submitted power of attorney, copy of balance Sheet and Profit & loss account. Thereafter notice u/s 142(1) was issued on 04.09.2019 fixing the case for hearing on 12.09.2019. Despite various opportunities provided to it during assessment proceedings, assessee failed to furnish any details/documents/clarification as called for. The assessee has not complied with the statutory notices issued u/s 142(1) of the I.T. Act, 1961 hence ld. AO left with no other alternative but to complete the assessment to the best of his knowledge as per the provisions of section 144 of the Income Tax Act, 1961. Ld. AO noted that the assessee has not furnished return of income in compliance of notice issued u/s 148 of the I.T. Act, 1961. Ample opportunities were provided to the assessee, but no details/documents have been furnished till the date of completion of the assessment u/s. 144 of the....
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....below: "4.3 I have considered the facts of the case, grounds of appeal and assessment order and the ground-wise submissions of the appellant along with enclosures. 4.3.1 With regard to the addition on account of fixed assets, the AO held that the assessee has not produced bills and vouchers of the fixed assets introduced during the year under consideration. The appellant argued that it is evident from the bank statements and the loan installment debited in the bank account details. The submissions of the appellant are not acceptable. It is the duty of the appellant to provide the information called for. The onus always lies on the assessee to prove the genuineness of the transaction. During the appellate proceedings also, the appellant had not filed the bills and vouchers in support of his claim of additions to fixed assets. In the remand report, it was submitted by the AO that the assessee has not submitted any documentary evidence to show that such investment was made during the year for business purpose. A copy of the said remand report was provided to the appellant for his comments. Till date no rejoinder is received from the appellant. In the absence of any d....
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....s, the appellant argued that the addition was wrong but not proved on which way it was wrong. Mere taking a ground using the words that order is unsubstantiated and opposed to facts and law is not sufficient. The appellant has to prove by argument and demonstration as to how the order is unsubstantiated and opposed to facts and law. In the absence of details, I have no reason to hold that the AO was wrong in passing the order u/s. 144 of the Act. So it is held that in the fact of non compliance to the notices issued, AO was right in completing the assessment ex-parte and all the grounds raised in this appeal is dismissed. 5. Vide 4th ground of appeal the appellant craves her rights to add, amend or alter any of the grounds on or before the hearing. However, the appellant has not opted the option by her during appeal proceedings. Hence, this ground of appeal is dismissed 6. In the result, the appeal is dismissed." 5. As the assessee did not find any favour, from the appeal so filed before the ld. CIT(A)/NFAC, the assessee has preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. To support the various grounds so raised by the....
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....eposited a sum of Rs. 42,46,000/- during the F.Y. 2011-I 2 in his saving bank account held with ICICI Bank Ltd. The assessee has not filed his return of income for the year under consideration. In absence of return of income the above transactions has not verifiable, whereas he has having income chargeable to tax. Accordingly, reasons for reopening of the case were recorded, and notice u/s 148 of the I.T. Act. 1961 was issued on 19.03.2019, which was duly served upon the assessee through registered post ... " The Id. AO's sole contention of reopening of the case of the assessee stands to be two-fold: firstly, cash deposit of Rs. 42.46 lakhs and secondly non filing of return of income which is completely biased and contrary to the facts of present case. Hence this ground. Submission: 1. No Reason to believe existed: 1.1 A bare perusal of reasons recorded appears more to be reasons to suspicion as against reason to believe for the simple reason that in the entire reasons alleged to be recorded, not at all disclosed what type of information or material came to his possession so as to give rise to a ground for the formation of the belief....
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....ense claimed out of total 14 items (being Truck operating expense, Depreciation and Interest on loan) and further w.r.t. Balance sheet, 1 item under Assets (being addition in fixed asset of truck) and 1 item under Liabilities (being expense payable). The approach adopted by the ld. AO itself is based on cherry picking which is not tenable under the eyes of law in as much as the AO felt satisfied with other items of expense claimed by assessee without any corroborative evidences. Admittedly, the AO did not refer to any paper found during some Search or any statement recorded which might have indicated any possible disallowance revealing personal expense claimed by assessee. Thus, it is evidently a case of subjective satisfaction recorded and not an objective one which is the requirement u/s 147. Hence, the AO proceeded on mere reasons to suspicion as against reasons to believe. 1.5 Reliance is placed on CIT v. Kelvinator of India Ltd. [2010] 187 Taxman 312/320 ITR 561 (SC) where Hon'ble Apex court held as under: "However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, section 147 would give a....
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....addition, he can also put to tax, the other income, chargeable to tax, which has escaped assessment, and which has come to his notice subsequently, in the course of proceedings under s. 147. To clarify it further, or to put it in other words, in our opinion, if in the course of proceedings under s. 147, the AO were to come to the conclusion, that any income chargeable to tax, which, according to his 'reason to believe', had escaped assessment for any assessment year, did not escape assessment, then, the mere fact that the AO entertained a reason to believe, albeit even a genuine reason to believe, would not continue to vest him with the jurisdiction, to subject to tax, any other income, chargeable to tax which the AO may find to have escaped assessment, and which may come to his notice subsequently, in the course of proceedings under s. 147." 2.2.2 CIT vs Jet Airways (I) Ltd. (2011) 331 ITR 236 (Mum), wherein it was held as under: "Reassessment-Scope-Income in respect of which notice issued not found to be escaped income-Once the AO accepts that the income in respect of which he entertained reason to believe to have escaped assessment, was not in ....
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....ediately thereafter on 04.09.2019 very hurriedly the AO issued notice u/s 142(1) and on 03.12.2019, completed the assessment i.e. within a short period of 3 months only i.e. September to November, 2019. Needless to say, that if the assessment was getting time barred on 31.12.2019, he should not have kept a silence and to wake up at the fage end and then to pressurize the assessee for submitting details in a short time. The Legislature has intentionally kept a reasonable period to complete the assessment after filing the return. This way, even though some opportunities might have been given but were illusory and not effective and adequate. Kindly refer Harendra Singh Dhillon, Naagaon v/s ITO (2012) 32 CCH 103 (Del). General Submissions on Merits: For all the grounds: 2. The impugned assessment is not a best judgment assessment as contemplated by law: 2.1 It is submitted that the AO also did not meet with the requirements of making a "best judgment assessment". It is submitted that while making an assessment u/s 144 the AO does not have blind and arbitrary powers to make the assessment, the way he wants. On the contrary, the law enjoins upon him a more oner....
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....v/s CIT (1934) 2 ITR 129 (All.): An ex-parte assessment should not be influenced by a desire to punish the assessee for non- compliance with a notice. 2.3.2 In Brij Bhushan Lal Parduman Kumar v/s CIT (1978) 115 ITR 524 (SC): The authority making a best judgment assessment must make an honest and fair estimate of the income of the assessee and though arbitrariness cannot be avoided in such estimate, the same must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case. 2.3.3 In Sri Shankar Khandasari Sugar Mills v/s CIT (1992) 193 ITR 669 (Kar.): Best judgment assessment ought to be based on a fair and proper estimate of assessee's income and inferences to be drawn from available material should be properly inferable inferences. 2.3.4 The same principles were propounded by Hon'ble Rajasthan High Court in the case of CIT v/s Gotan Lime Khaniz Udyog (2002) 256 ITR 243 (Raj): 3. However, your honour shall find that the lower authorities in the present case have not conformed to these settled principles by the courts, while making the impugned assessment u/s 144 as elaborated hereunder: ....
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....3602592 for loan of Rs. 21.80 lakhs payable in 46 EMI of Rs. 58,993/- each (PB 4-5) and another loan of Rs. 3.5 lakhs with LAN LVKTP00023602593 payable in 46 EMI of Rs. 9,471/- each (PB 6-7). Undisputedly, no enquiry was made by the authorities below from the bank. Interestingly, the addition of the new asset this year, was partly sourced from such loan itself, which fact is evident from the Audited Balance Sheet (PB 14). Once the source is not disputed the fact of taking loan also stands established. 3.3 As regards disallowance of the depreciation: The allegation of the authorities below is that the appellant did not submit any documentary evidence and that depreciation schedule was not submitted. At the same time however, it is admitted that in the Audited P&L Account there is a truck operating expense of Rs. 2,41,98,338/- and other expenses. It can't be denied that it is only with the help of the truck and incurring various expenses for running and operating the truck for plying (direct or indirect), the assessee was able to declare huge gross receipts of Rs. 2.91 Cr. as per the Audited P&L Account. The ld. AO happily taxed the profit/income arising from the truck d....
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....2411150121 15-01-2021 139(1) 6,00,180 12 2021-22 Original ITR-3 919511040291121 29-11-2021 139(1) 4,86,190 13 2022-23 Original ITR-3 504218971180922 18-09-2022 139(1) 4,91,340 14 2023-24 Original ITR-3 354537381300923 30-09-2023 139(1) 10,28,320 15 2024-25 Original ITR-3 523348980280924 28-09-2024 139(1) 10,60,000 Such approach is completely against the basic principle contemplated u/s 144 of making a best judgment assessment. On this ground alone, all the additions deserve to be deleted or in any case alternatively, the entire assessment order deserves to be set aside and restored to the file of the AO for assessing the income afresh. 4. Regular Accounts-Binding Evidence: The Assessee has been maintaining regular books of accounts. The same were subject to the audit. Notably, there is no adverse remark made by the auditors. It is now well settled that the regularly maintained books of accounts, is an admissible evidence under Indian Evidence Act, 1872.The authorities below do not dispute this legal position and the facts narrated herein above. In the present c....
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....sence of any such finding, there being no reason germane to the unacceptability of the book results. ... " 4.5 Ajanta Constructions (P.) Ltd. Vs. ACIT XXII TW 606 (ITAT Jaipur) "The maintenance of books of accounts in the normal course of business activities have to be taken as correct unless there are strong and sufficient reasons to indicate that they are unreliable." 4.6 DCIT Vs. Associated Stone Industries (Kotah) Ltd. XXII TW 155 (JP) held that: " No additions can be sustained on this account. Books of accounts of the assessee was not rejected and no defect of any kind was found by the AO or by the CIT (A)." 4.7 Ghewarchand Vs. ITO - XXI TW 571 held that: "Therefore we hold that books of account maintained by the assessee were the books of account maintained in the regular course of business. Therefore, the income should be deduced on the basis of books of account maintained by the assessee." 5. Even audited balance sheet is sufficient and valid evidence: The facts are admitted that the appellant filed audited Balance Sheet and P&L account before the AO which was not even doubted what to talk of rejection thereof a....
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....itten submission reliance was placed on the following evidence / records / decisions: S. No. Particulars Page No. 1. Copy of ROI filed for A.Y. 2012-13 dated 23.12.2013 1 2. Copy of notice u/s 148 dated 19.03.2019 2 3. Copy of Purchase Invoices of the Trucks purchased during the AY 2012-13. 3 4. Copy of Loan statements/ Interest certificate 4-8 5. Copy of Bank statement for the period of 01.04.2011 to 31.03.2012 9-13 6. Copy of Financial Statements for the A.Y. 2012-13 14-16 7. Copy of written submission filed before the ld. CIT(A) dated 06.11.2024 17-24 8. Copy of summary of Direct Expenses for the period of 01.04.2011-31.03.2012 25 9. Copy of monthly summary ledger of Dala & Other Expenses for the period of 01.04.2011-31.03.2012 26 10. Copy of monthly summary ledger of Diesel & Fuel Charges for the period of 01.04.2011-31.03.2012 27 11. Copy of monthly summary ledger of Fooding Expenses for the period of 01.04.2011-31.03.2012 28 12. Copy of monthly summary ledger of Jeep Rent for the period of 01.04.2011-31.03.2012 29 13. Copy of monthly summary ledger of Sup....
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.....K. Haldar & Co. v. Commissioner of Income-tax 4. [2002] 123 Taxman 756 (Calcutta) HIGH COURT OF CALCUTTA Ispat Industries Ltd. v. Deputy Commissioner of Income-tax 5. [2023] 153 taxmann.com 25 (Gujarat) HIGH COURT OF GUJARAT Akshat Pramodkumar Chaudhary v. Deputy Commissioner of Income-tax 6. [2022] 139 taxmann.com 198 (Gujarat) HIGH COURT OF GUJARAT Amar Jewellers Ltd. v.Assistant Commissioner of Income-tax 7. [2018] 94 taxmann.com 393 (Gujarat) HIGH COURT OF GUJARAT Amit Polyprints (P.) Ltd.v.Deputy Commissioner of Income-tax 8. [2018] 91 taxmann.com 119 (Gujarat) HIGH COURT OF GUJARAT Aradhna Estate (P.) Ltd.v.Deputy Commissioner of Income-tax, Circle-1(1) 9. [2023] 152 taxmann.com 573 (SC) SUPREME COURT OF INDIA Ajay Gupta v. Income-tax Officer 10. [2019] 101 taxmann.com 231 (Madhya Pradesh) HIGH COURT OF MADHYA PRADESH Etiam Emedia Ltd.v. Income-tax Officer-2(2) 11 . [2020] 115 taxmann.com 338 (Delhi) HIGH COURT OF DELHI Experion Developers (P. 12. [2018] 91 taxmann.com 181 (Gujarat) HIGH COURT OF GUJARAT Jayant Security & Finance Ltd.v.Assistant Commissioner of Income-tax, officer Circle 1(1) 13. [2012] 18 taxmann.c....
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....elhi) HIGH COURT OF DELHI OPG Metals & Finsec Ltd. v. Commissioner of Income-tax 33. [2021] 128 taxmann.com369 (Jaipur - Trib.) IN THE ITAT JAIPUR BENCH 'A' Smt. Uma Mandal v. Income Tax Officer. Ward 5(4). Jaipur 34. [1997] 90 Taxman 553 (SC) SUPREME COURT OF INDIA Associated Ston Industries (Kotah) Ltd. v. Commissioner of Income-tax Ld. DR also relied upon the detailed report of the assessing officer dated 03.02.2025 on the technical ground which reads as under: No. ITO/W BEHROR/2024-25/725 Dated 03.02.2025 To The Commissioner of Income Tax (In Situ) (S DR)-II Income Tax Appellate Tribunal, Jaipur (Through Proper Channel) Sir. Sub: Appellate proceedings in the sense of Kailash Chand. PAN-AHOPC7760R. ITA 565/JPR/2024) for the A. Y. 2012-13-reg- Ref. Earlier report submitted vide letter no 567 dated 03.12.2024. Kindly refer to the aa....
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....07.2019 were issued to the assessee. Letter dated 21.08.2019 was issued show causing the assessee why the assessment should not be completed according to the provisions of section 144 Shri Raman Kumar Saini CA and A/R attended office of behalf of the assessee. He submitted power of attorney, copy of Balance sheet and P& 1 account. Notice u/s 142(1) dated 04.09.2019 was issued and served to him. However, assessee failed to furnished the requisite documents/explanation and hence assessment order was made u/s 144 on 03.12.2019 al total income of Rs. 90,94,442/ -. 4. The assessee submitted that once audited balance sheet is submitted then the authorities are bound to accept the facts. But it is relevant to mention here that the assessee only submitted copy of balance sheet and Profit & loss account Even complete audit report was not submitted by the assessee so as to ascertain which books of account are maintained by the assessor adverse remarks made by the auditor, if any ete The assessee submitted that no enquiry was made by then ITQ, But the assessee failed to explain why no compliance was made during the assessment proceedings. The assessee failed to explain why no complet....
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....ted power of attorney, copy of Balance sheet and P& L account. Notice u/s 142(1) dated 04.09.2019 (copy enclosed) was issued and served to him. However, assessee failed to furnished the requisite/documents/explanation and hence assessment order was made u/s 144 on 03.12.2019 at total income of Rs. 90,94,442/ -. Grounds of Appeal 3. The assessee was given adequate and reasonable opportunity of hearing during the assessment proceedings. However, assessee failed to furnished the requisite/ documents/explanation and hence assessment order was made u/s 144 on 03.12.2019. The assessee failed to specify error in law as well as on the facts of the case in passing the assessment order. Grounds of Appeal 4 to 9. The Ld. CIT (A) upheld the additions made by the assessing officer after considering submission of the assessee and dismissed appeal of the assessee. Therefore, The Ld. CIT (A) has not erred in law as well as on facts of the case. Grounds of Appeal 10. No comments In additional evidence, the assessee submitted monthly summery of direct expenses, diesel charges, DALA & Other, Fooding expenses, Jeep Rent, Supervisor expenses & Mistry and Too....
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....tional evidence in its discretion if such additional evidence would be necessary to do substantial justice in the matter. Kindly refer CIT v/s Text Hundred India (P) Ltd. (2011) 239 CTR (Del) 263, ITO v/s B.N. Bhattacharya (1978) 112 ITR 423 (Cal), Prabhavati S. Shah vs CIT 1998 231 ITR 1 (Bom.) D. These evidences go to the root of the issues and consideration thereof is must for a just decision thereon. Hence, under the totality of facts and circumstances, it is very humbly prayed that such evidence/s kindly be taken on record, considered and obliged. " 10. We have heard the rival contentions and perused the material placed on record. Vide Ground no. 1 the assessee challenges the order of the assessment passed under section 148 r.w.s. 144 of the Act. The brief fact of the case are that the assessee engaged in the business of plying of trucks on hire during the relevant period and the assessee has declared gross receipts of Rs 2,91,01,799/- on which net profit of Rs 1,07,648/- @ 0.37% has been declared for the year under consideration. Revenue was in possession of the information that the assessee has deposited a sum of Rs 42,46,000/- during the F.Y. 2011-12 in....