TaxTMI 
TaxTMI 
2025 (4) TMI 1861
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...., 1961 which is wrong, unwarranted and bad in law. Kindly delete the same. 2. That the appellant craves the permission to add to or amend to any of the above grounds of appeal or to withdraw any of them." 2.1 Vide application dated 20.02.2025 the assessee raised the three additional grounds which reads as under : 1. That the Ld. A.O. has erred in Law & facts of the case to invoke Section 68 of the I.T. Act, 1961, as the appellant neither maintain any books of accounts nor the Ld. A.O. found any credited in the books of appellant. So, the invocation of Section 68 of the I.T. Act, 1961 is wrong and bad in Law. Kindly delete the addition. 2. That the Ld. A.O. has erred in Law & facts of the case in making addition without following the Principle of Natural Justice & without following the binding instruction of CBDT, instruction No. 20/2015, dated 29.12.2015. So, the addition is bad in law. Kindly delete the same. 3. That the Ld. A.O. has erred in Law & facts of the case by charging the special rate, without mentioning the fact of special rate of tax in assessment order and without mention section of special rate being invoked & why. So, the charg....
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....il of investment made during the last 3 years and to disclose source of income, detail of house hold expenses and other expenses incurred during the last 3 years, detail of any social function organized by you during the last 3 years and furnish detail of cash in hand during the last 3 years the assessee was asked to explain the reason why the unused huge cash fund leis with her so long period. In response to this notice neither the assessee attended nor filed any written reply in this regard before the ld. AO. 3.2 Further assessee was asked as to why she retain the said amounts three year duration in her pocket? The assessee did not reply to that query and not filed any supporting documentary evidences in her claim. In view of the above facts and discussion made ld. AO made the addition of Rs. 21,61,000/- [ 16,35,000 + 5,26,000 ] u/s. 68 of the Act. 4. Aggrieved, from the said order of assessment, assessee has filed an appeal before the ld. CIT(A). The ld. CIT(A) after hearing the contention of the assessee dismissed the appeal of the assessee by giving the following findings on the issue:- "4. DECISION: 4.1 I have perused the assessment order and the submi....
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.... and therefore, the appeal filed by the appellant is dismissed. 5. In the result, appeal is dismissed." 5. As the first appeal filed by the assessee was dismissed and therefore, feeling dissatisfied with that order of the ld. CIT(A) the assessee is in appeal before this tribunal on the grounds as reiterated herein above. In support of the grounds of appeal the ld. AR of the assessee has relied upon the following written submission:- Brief Facts & Arguments of the Case: 1. Appellant is a Government Teacher since 2005 (as around 11 years Govt. job) and during the year under consideration appellant had G.T.I. of Rs. 5,46,481/- & Agricultural Income of Rs. 42,000/- during the year under consideration. 2. Moreover, the husband of appellant is also in Govt. Job since 1999 (i.e. around 17 years of govt. job) and having G.T.I. of Rs. 3,02,336/- And Agricultural income of Rs. 1,73,522/- during the year under consideration. 3. That appellant lives with her husband (both are government servants) and have 2 kids. Elder daughter Palak was 13 years old and during the year under consideration, studied Class VII^th and her quarterly school fees was R....
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....has not furnished any details of household expenses). Arguments and reliance of case laws on additional legal grounds of appeal:- Ground No. 1 "That the Ld. A.O. has erred in Law & facts of the case to invoke Section 68 of the I.T. Act, 1961, as the appellant neither maintain any books of accounts nor the Ld. A.O. found any credited in the books of appellant. So, the invocation of Section 68 of the I.T. Act, 1961 is wrong and bad in Law. Kindly delete the addition." (i) That the invocation of Section 68 of the I.T. Act, 1961 is wrong as appellant is a salaried employee and not maintain any kind of books of accounts. (ii) The Ld. A.O. nowhere mentioned how and why, he invoked the Section 68 for addition.? (iii) The Ld. A.O. has not issued any SCN that he is going to made addition u/s. 68 of the I.T. Act, 1961. (iv) The Ld. A.O. has not fulfilled the jurisdictional required to invoke Section 68 of the Act. (v) The Ld. A.O. did not stated which cash credit is unexplained for the addition. (vi) The appellant is relying on the following judgments, which are as follows:- 1. Judgment of Hon'ble Bomba....
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....ete the same. Since we have quashed the addition on the ground that no such addition could have been validly made U/s 68 of the Act, therefore, we refrain ourselves to decide the other grounds wherein the assessee has assailed on merits the additions sustained by the ld. CIT(A) In the result, appeal of the assessee is allowed." The addition u/s. 68 is liable to be deleted. Ground No. 2 "That the Ld. A.O. has erred in Law & facts of the case in making addition without following the Principle of Natural Justice & without following the binding instruction of CBDT, instruction No. 20/2015, dated 29.12.2015. So, the addition is bad in law. Kindly delete the same." The Ld. A.O. did not issue any SCN to make addition u/s. 68 of the Act, therefore the Ld. A.O. did not follow the guidelines of CBDT mentioned in CBDT instruction No. 20/2015, dated 29.12.2015. The relevant Para of CBDT instruction is as follows:- "4. The Board further desires that in all cases under scrutiny, where the Assessing Officer proposes to make additions or disallowances, the assessee would be given a fair opportunity to explain his position on the proposed additi....
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....tment cannot be permitted to take a stand contrary to the instructions issued by the Board. (3) A show cause notice and demand contrary to existing circulars of the Board are ab initio bad (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars. " 2. Judgment of Hon'ble Supreme Court in case of Commissioner of Customs v. M/s. Indian Oil Corporation, 2004, (3) SCC, 488, dated of order 17.02.2004, the relevant para of judgment is as follows:- "..........The decision in PanchMahal Steel (supra) does not allow an adjudicating officer to act in violation of the Circular issued under Section 151A. Incidentally the decision in PanchMahal (supra) was an ex-parte one in the sense that the importer was not represented when the matter was argued. Its failure to prefer an appeal could not in the circumstances mean that the issue had become final as far as all other importers are concerned. Moreover, there was no reference to the Circular nor any reason for coming to the conclusion that demurrage was includible in the value of the imported goods. We may mention here that the stand of the appellant that this Court had taken ....
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....e income of the assessee is determined and charged or taxed in the manner as proposed by the Ld. A.O. But, in the instant case no such type of opportunity had been provided but the AO has failed to do so, which is against the Principal of Natural Justice and against the Law. This Section 115BBE, is charging of tax at the higher rate and it cannot be applied directly without giving any show cause notice when the issue are disputed that whether the higher rate of tax applicable or not on the alleged income or the nature of income falls us. 68/69 and 115BBE. Hence it was mandatory on the part of the AO to issue show cause before invoking the provision u/s. 115BBE, in absence of the same the rate cannot be charged more than to normal rate of tax, if the addition if any sustained." So, charging special rate u/s. 115BBE cannot be charged and kindly charge the normal tax rate even if the addition is sustained. Arguments and reliance of case laws on ground No. 4 of the appeal i.e. arguments on merits:- Ground No. 4 "That under the facts and circumstances of the case the Ld. National Faceless Appeal Centre (NFAC) has erred in law and facts in confirming t....
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....purposes. The orders of Assessing Officer as well as Commissioner of Income Tax are completely silent as to for what purpose the earlier withdrawals would have been spent. As per the cash book maintained by the assessed, a sum of Rs. 10,000/- was being spent for household expenses every month and the assessed has withdrawn from bank a sum of Rs. 2 lacs on 4th December, 2000 and there was no material with the Department that this money was not available with the assessed. It has been held by the Tribunal that in the instant case the withdrawals shown by the assessed are far in excess of the cash found during the course of search proceedings. No material has been relied upon by the Assessing Officer or Commissioner Income Tax(A) to support their view that the entire cash withdrawals must have been spent by the assessed and accordingly, the Tribunal rightly held that the assessment of Rs. 2.5 lacs is legally not sustainable under Section 158BC of the Act and the same was rightly ordered to be deleted." 2. Judgment of Hon'ble ITAT, Jodhpur Bench in case of Smt. Krishna Agarwal v. ITO Ward-1, Pali, ITA No. 53/JODH/2021, Date of Order - 07.09.2021 "15. We further note t....
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....ng evidence / records : S. No. Particular Page No. 1 Copy of gist of notices issued during assessment proceeding. 1-2 2 Copy of Notice u/s. 142(1), dated 17.05.2019. 3-4 3 Copy of SCN dated 10.06.2019. 5 4 Copy of Notice u/s. 142(1), dated 27.06.2019. 6-7 5 Copy of reply dated 14.09.2018. 9 6 Copy of reply dated 08.10.2018. 10 7 Copy of reply along with documentary evidence dated 07.06.2019. 8 8 Copy of reply along with documentary evidence dated 19.06.2019. 11-12 9 Copy of reply along with documentary evidence dated 04.07.2019. 13 10 Copy of ITR-V of appellant for A.Y. 2017-18. 14 11 Copy of Computation of Total Income of appellant for A.Y. 2017-18. 15-16 12 Copy of Form No. 16 of appellant for A.Y. 2017-18. 17-20 13 Copy of Cash Flow Statement of appellant for the period from 01.04.2012 to 31.03.2017 21-26 14 Copy of Bank account statements of appellant & their summary:- (i). SBBJ -6700 (Saving Bank Account) (ii). AXIS Bank Loan Sanction Letter. (iii). Copy of Agricultural land Purchase Registry. (iv). AXIS Bank- 9167 (Saving Bank Account....
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....o the written submission so filed by the ld. AR of the assessee he vehemently argued that the assessee is teacher and has submitted a detailed cash flow statement (page 21-26) which proves the availability of the fund. There is no other source of this government employee. Not only that relying on decision of Bhaichand Gandhi even the bank statement cannot be considered as books and thereby the invocation of provision of section 68 was in correct in the case of the assessee. The assessee also submitted that her husband is also working and has also submitted that his cash balance was available with the assessee and therefore, even on merits the assessee has sufficient source to deposit the amount into the bank account. 7. Per contra, Ld. DR relied upon the findings recording in the order of Ld. CIT(A). He vehemently stated that it was not practicable to keep the cash on hand by the assessee since 2013 onward and kept at home. The reasons given were not acceptable and even considering the nature of the job the assessee perform the cash on hand to that extent is also not convincing to be kept on hand and therefore, the addition so made is required to sustained. 8. We have heard t....
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....? The assessee did not reply to that query and not filed any supporting documentary evidence in support of her claim. In light of that of the case ld. AO made the addition of Rs. 21,61,000/- [ 16,35,000 + 5,26,000 ] u/s. 68 of the Act. The assessee carried the matter before the ld. CIT(A). In the meanwhile ld. AO on 07.08.2019 revised the addition amount by Rs. 17,99,000/-. While dealing with the appeal of the assessee for the sustained addition he noted that assessee is a Government Teacher in Rajasthan drawing an annual salary of Rs 5,46,481/-. She has stated that she has maintained 7 bank accounts in different banks during the year. The sources of the cash deposits in the bank account is stated to be from Cash withdrawn from bank account of Rs. 6,97,000/- in F.Y. 2014-15, 2015-16 & 2016-17 from her salary. She also obtained a mortgage loan of Rs. 15,00,000/- taken from Axis Bank used for purchase of land of Rs. 8,30,600/- vide sale deed dated 12.03.2013; balance amount of Rs. 6,36,400/- having been retained by her since March, 2013 till the demonetization period. He also stated to have Agricultural income of Rs. 1,07,000/- of F.Y. 2014-15, 2015-16 & 201617 and available withd....
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....ent on that information in the orders of the lower authority and thereby rejected the explanation of the assessee merely stating that "Submission and documentary evidence filed by the assessee is not genuine and factual. Thus, the explanation of the assessee though supported by evidence was not considered and there is no reasons as to making the whole cash deposit as unexplained. Looking to the overall explanation so furnished by the assessee we are of the considered view that the assessee has placed on record all the evidence so as to justify the cash available with her where she submitted even the return of income of her Husband, loan documents, expenditure incurred on kids education etc. which are sufficient records to prove the deposit of cash into the bank account but the same were rejected in Lock, Stock and Barrel which is not correct as no addition of income be made based on the surmises and conjectures. The bench also noted from the cash flow statement so filed by the assessee that Rs. 14,84,330/- was opening cash balance, thereby left the amount of Rs. 3,14,670/- was part of income of the assessee and that of her husband and agricultural income cannot be considered as une....