TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 157
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....id notice, therefore order passed is illegal, invalid and bad in law; The learned Commissioner of Income Tax Appeal, National Faceless Appeal Centre failed to consider that books of account were duly accepted in previous year and source were accepted in earlier year by the department, therefore confirming the addition made by CIT(A) NFAC u/s. 68 is illegal, invalid and bad in law; The Commissioner of Income Tax Appeal, National Faceless Appeal Centre ought to have appreciated the fact that the addition of Rs. 65,00,000/- made towards explained cash deposits were supported by bank statement, books of account and return of income, capital position, therefore confirming the addition of Rs. 65,00,000/- u/s. 68 is illegal, invalid and bad in law; 5. The learned Commissioner of Income Tax Appeal, National Faceless Appeal Centre erred in confirming addition without considering opening cash balance available with the assessee, therefore addition confirmed by NFAC appeal at Rs. 65,00,000/- made u/s. 68 is illegal, invalid and bad in law; 6. The learned Commissioner of Income Tax Appeal, National Faceless Appeal Centre erred in not considering that assesse....
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....ring the course of assessment proceedings, on perusal of the bank statements furnished by the assessee, the Assessing Officer noted that, the assessee has deposited cash in his Canara Bank account of Rs. 1,05,000/-, Karur Vysya Bank Ltd., of Rs. 77,50,000/-, Punjab National Bank of Rs. 1,30,000/- and the assessee was asked to furnish details of source of cash deposits in bank accounts. In response, the assessee has furnished her share in purchased property and also the break-up details of investment, according to which, the assessee has received overdraft from Canara Bank amounting to Rs. 70,46,875/-, amount received from sale consideration of Rs. 39,73,500/- as per her share in the said property and declared source of investment amounting to Rs. 1,10,20,375/- [i.e. Rs. 70,46,875/- + Rs. 39,73,500/-]. Further, the Assessing Officer noted in the assessment order the income tax returns filed by the assessee from the financial year 2001-2002 to 2006-2007, 2008-2009 to 2020-2021 and her admitted income totalling to Rs. 79,88,483/- which was tabulated by the Assessing Officer at pages 7 and 8 of the assessment order. During the course of assessment proceedings, the assessee has submitte....
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....s now, in appeal before the Tribunal. 6. Shri Manoj G Moryani, Advocate-Learned Counsel for the Assessee [through Hybrid Mode] reiterated the submissions made before the lower authorities and submitted that, during the course of assessment proceedings, sufficient opportunity was not provided by the Assessing Officer to furnish books of accounts on tally maintained by the assessee to prove it's case that the assessee has got abundant and sufficient sources to meet the impugned cash deposits addition made by the Assessing Officer amounting to Rs. 65 lakhs. Similarly, although, addition of Rs. 45,40,750/- made by the Assessing Officer u/sec.56(2)(x)(b)(B) of the Act which is not operative for the assessment year 2021-2022 and in fact, ceased to operate from 01.04.2017 and thus, the addition made by the Assessing Officer under the Head 'Variation in respect of issues' amounting to Rs. 1,10,40,750/- [i.e. Rs. 65,00,000/- + Rs. 45,40,750/-] is not sustainable and needs to be deleted. During the course of appellate proceedings before the learned CIT(A), although, the assessee has submitted that the cash deposits were sourced from past accumulated income duly reflected in the appellant&....
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....nce either during the course of assessment proceedings or appellate proceedings to substantiate the alleged cash inflow or availability. The other contention of assessee that, making addition u/sec.56(2)(x) is allegedly ceased to operate from 01.04.2017 is factually incorrect and legally untenable, as sec.56(2)(x) was introduced by the Finance Act, 2017 w.e.f. 01.04.2017 and is very much applicable for the assessment year 2021-2022 under consideration. Therefore, the learned CIT(A) after considering relevant submissions of the assessee and the assessment order, has rightly upheld the order of the Assessing Officer. Therefore, she pleaded that the Order of the learned CIT(A) should be upheld in the interest of justice. 8. We have heard both the parties, perused the material on record and the orders of the authorities below. The Assessing Officer made addition based on bank account of the assessee u/s. 68 of the Act as unexplained cash credit on the ground that the explanation offered by the assessee towards source of cash deposit is not supported by necessary evidences. It was the argument of the learned counsel for the assessee that the cash deposited into bank account cannot be....
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.... made towards the said credit u/s. 68 of the Act. This legal position is supported by the decision of Hon'ble Bombay High Court in the case of CIT Vs. Bhaichand N Gandhi (1983) 141 ITR 67, where the Hon'ble High Court held that the pass book supplied by the bank to the assessee cannot be regarded as the books of account of the assessee. In other words, a cash credit of previous year shown in the bank pass book is not found in the cash book maintained by the assessee for that year does not fall u/s. 68 of the Act and the Assessing Officer is not satisfied with explanation of the assessee, he can treat it as unexplained money u/s. 69A of the Act. A similar view has been taken by Hon'ble Rajasthan High Court in the case of CIT Vs. Parameswar Bohra (2004) 267 ITR 619 (Raj). The ITAT, Mumbai Bench, in the case of Mehul V Vyas Vs. ITO reported in 164 ITD 296 had taken a similar view and held that passbook supplied by a bank is not a books of account maintained by the assessee and thus the addition cannot be made as unexplained cash credit u/s. 68 of the Act. Since the Assessing Officer has made addition towards cash deposit u/s. 68 of the Act, on the basis of bank passbook in our conside....
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....ce and consequently cannot be upheld, as held by the Hon'ble Kolkata High Court in the case of Vishal Jhajharia Vs. Assessment Unit (2025) 343 ITR 478 (Kol). A similar view has been taken by Hon'ble Gujarat High Court in the case of A.K. Metals Products Vs. Assessment Unit (2025) 478 ITR 504 (Guj). Since the Assessing Officer made additions contrary to his own show cause notice without giving proper opportunity to the assessee, in our considered opinion, the additions made by the Assessing Officer violates the principle of natural justice and thus cannot be upheld. Thus, on this ground itself, the additions made by the Assessing Officer needs to be deleted. 11. Coming back to the explanation of the assessee with regard to difference in sale consideration as per registered sale deed and fair market value of the property as determined by the stamp duty authority. There is no dispute with regard to the fact that there is a difference between the fair market value and sale consideration as per registered sale deed as on the date of registration of the property. The assessee has explained that the property purchased by the assessee is adjacent to the other property without there bein....