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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Before: SHRI WASEEM AHMED & Ms. SUCHITRA KAMBLE
PER SUCHITRA KAMBLE, JUDICIAL MEMBER :
This appeal is filed by the assessee against the order dated 20.10.2016 passed by the CIT(A), Gandhinagar, Ahmedabad for the Assessment Year 2008-09.
The grounds of appeal raised by the assessee are as under :
“1) Learned CIT(A)-Gandhinagar has erred in approving the action of A.O. in reopening assessment u/s 147 of the Act in as much as procedure laid down by hon. SC in case of GKN Driveshafts, 259 ITR 19 is not followed, by not providing reasons recorded & further not issuing mandatory notice u/s 143(2) of the Act.
2) Learned CIT(A)-Gandhinagar has erred in confirming the addition of Rs.10,58,000/- made by AO u/s 68 of the Act being cash deposited in Oriental Bank of Commerce, Unjha Branch.
Page 2 of 5 2.1 Credits in Bank A/c cannot be taxed as income by invoking Sec 68 since bank A/c is not books of A/c. Appellant do not maintain books of Accounts.
2.2 The deposit in bank A/c is from explained source.
3) The assessee craves for liberty to amend, modify and add any grounds of appeal or furnish additional evidences.”
The assessee has also raised additional grounds of appeal which read as under:
Additional Grounds of appeal
1) The Re-open of assessment by A.O. is bad in law and requires to be quashed in as much as, i) The approval of Additional CIT u/s 151 of the IT Act is not as per law and not competent so as to provide a legally valid jurisdiction to A.O. to initiate the re-assessment proceedings, more so the approval/satisfaction is mechanical, without application of mind and in stereo typed matter.
2) The assessment framed by A.O. u/s. 144 r.w.s. 147 is without jurisdiction. Since, case is transferred from A.O. Unjha by order of CIT - Gandhinagar u/s 127(1) of the Act to A.O., Patan without consent of the assessee. The transfer of case record from one A.O. to another A.O. of different locality is without following the procedure laid down u/s 127(1) of the Act.
3) The assessee was doing share trading business and the cash was deposited/withdrawn for the business. The peak credit only can be added, in place of total cash deposited in Bank A/c.”
The Assessing Officer received information that the assessee has made cash deposits of Rs.10,58,000/- in savings account held with Oriental Bank of Commerce Unjha. Accordingly, case was reopened for recording reasons under Section 147 of the Income Tax Act, 1961. Notice under Section 148 of the Act was issued on 25.03.2015 and there was no response. The Assessing Officer issued notice under Section 142(1) of the Act on various dates which were though served no response by the assessee or his AR was received. Therefore, the Assessing Officer proceeded under Section 144 of the Act thereby making addition of Rs.10,58,000/- as unexplained income under Section 68 of the Act.
Page 3 of 5 5. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The Ld. AR submitted that additional ground no.1 is not pressed.
As regards ground no.2, the Ld. AR submitted that the assessment framed by the Assessing Officer is without jurisdiction as the case was transferred from the Assessing Officer, Unjha by order of CIT Gandhi Nagar under Section 127(1) of the Act to the Assessing Officer, Patan without consent of the assessee. The transfer of case record from one Assessing Officer to another Assessing Officer of different locality is without following the procedure laid down under Section 127(1) of the Act.
As regards ground no.3, the Ld. AR submitted that the assessee was doing share trading business and cash was deposited/withdrawn for the business purposes. Therefore, the peak credit entry only can be added in place of total cash deposit in Bank account. Ld. AR submitted that the Assessing Officer as well as the CIT(A) has added this cash deposit without verifying the evidences produced before them as the assessee is not maintaining books of accounts. The deposits in bank account cannot be treated as books of account of the assessee and thus the same amount cannot be added under Section 68 of the Act.
The Ld. DR submitted that the Assessing Officer has given several opportunities to the assessee to produce the evidences before the Assessing Officer at the time of assessment proceedings despite receiving notices. The assessee has not appeared before the Assessing Officer and has not given any details relating to cash deposits in the bank. In absence of documentary evidences, the Assessing Officer rightly made the addition as the source of cash deposits was not explained.
The Ld. AR submitted that the assessee was a share trader and has taken IPO and the same amount has been reflected in the bank statement and thus when cash deposits/withdrawals has been done the said amounts were reflected in the bank account of the assessee. Thus, the source was very much explained before the CIT(A).
Page 4 of 5 11. We have heard both the parties and perused all the relevant materials available on record. At the time of hearing and after going through the order of the CIT(A), it emerges that the details of IPOs were not produced before the CIT(A) and before the Assessing Officer. The cash deposits and its source as well as related supporting evidences were not produced by the assessee before the Assessing Officer as well as before the CIT(A). The assessee has filed additional evidence before us. Therefore, it will be appropriate to remand back the matter to the file of the Assessing Officer for proper adjudication of the additional evidence produced before us along with details of IPOs. After verification of the source of cash deposit as well as the genuineness of the transactions, the Assessing Officer may decide the case of the assessee as per the due process of law.
As regards additional ground nos.1 & 2, sincethegroundno.1 is not pressed, the same is dismissed.
As regards ground no.2, the jurisdiction was properly invoked and the transfer was properly done by the Revenue Authorities and hence ground no.2 is dismissed.
As regards additional ground no.3, the same is the consequential ground in respect of original ground no.2 (2.1 & 2.2) of the appeal Memo and the same is elaborated in respect of merit of the case. Hence, ground no.2, 2.1 & 2.2 and additional groundno.3 are partly allowed for statistical purposes.
In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on this 10th day of December, 2021.