B. SRIPRIYA,NAMAKKAL vs. ITO, WARD-I, TIRUCHENGODE

The grounds raised read as follows:- 1. The order of the CIT(A) is bad and erroneous in law and against the principles of natural justice.

Brief facts of the case are as follows: The assessee did not file the return of income for the assessment year 2011-12. Based on AIR information indicating that the assessee had carried out transactions in Multi Commodity Derivatives aggregating to Rs.1,09,70,000/- during the relevant previous year, the AO reopened the assessment by issuing notice u/s.148 of the Act on 26.03.2018. Since the assessee failed to comply with the notices issued u/s.142(1) of the Act, the AO obtained the bank statement pertaining to the assessee from the concerned bank. On verification of the bank statement, the AO noticed total credits of Rs.11,48,148/-. A show- cause notice was issued calling upon the assessee to explain the source of the said credits. However, the assessee failed to furnish any explanation or supporting evidence. Consequently, the AO completed the assessment ex parte u/s.144 of the Act vide order dated 07.12.2018 and treated a sum of Rs.11,48,150/-, being the initial investment made by the assessee in Multi Commodity Derivatives, as unexplained investment and brought the same to tax.

Aggrieved, assessee filed appeal before the First Appellate Authority (FAA). The FAA statistically allowed the appeal of the

Aggrieved by the order of the FAA, the assessee has filed the present appeal before the Tribunal. The Ld. AR submitted that the reassessment order dated 07.12.2018 passed u/s.144 of the Act is liable to be quashed. He submitted that the assessment was reopened on the basis of reasons recorded alleging escapement of income arising from transactions in Multi Commodity Derivatives aggregating to Rs.1,09,70,900/-. However, while completing the reassessment, the AO did not make any addition on the issue for which the assessment was reopened. Instead, the AO made an addition of Rs.11,48,148/- by treating the alleged initial investment in Multi Commodity Derivatives as unexplained investment. The Ld. AR contended that once the AO failed to make any addition on the income forming the basis of the reasons recorded for reopening, he could not have made an addition on a different issue. Therefore, the reassessment itself is invalid in law and liable to be quashed. In support of this contention, the Ld. AR relied upon the judgment of the Hon'ble Jurisdictional High Court in Tractors and Farm Equipment Ltd. v. ACIT reported in (2018) 409 ITR 369 (Mad.)

We have heard the rival submissions and perused the material available on record. We find that the assessment was reopened on the basis of AIR information indicating that the assessee had carried out transactions in Multi Commodity Derivatives aggregating to Rs.1,09,70,900/-. During the course of the reassessment proceedings, the AO, on verification of the assessee's bank account, noticed that the total credits relatable to the commodity transactions amounted to only Rs.11,48,148/-. Consequently, the AO treated the said amount as unexplained investment and made the addition. Therefore, prima facie, we are of the view that the addition made in the reassessment order emanates from the very issue for which the assessment was reopened, namely, the unexplained investment relating to Multi Commodity Derivative transactions. Hence, the contention of the assessee that the reassessment was completed on an issue unconnected with the reasons recorded does not merit acceptance.

We further find that the assessment was completed on best judgment basis u/s.144 of the Act. Therefore, we do not find any infirmity in the order of the FAA restoring the matter to the file of the AO. However, since the legal ground raised by the assessee before

In the result, the appeal filed by the assessee is dismissed.