SIDHESH FILMS P. LTD.,MUMBAI vs. ITO-16(1)(4), MUMBAI

आदेश / O R D E R PER M. BALAGANESH (A.M):

1. The Ld CIT(A) erred in facts circumstances of the case and in law in dismissing ground taken against AO's action of resorting to re-assessment based on information admittedly he received in a survey that took place in office of proprietary concern of the director in March 2009 giving him a reason to believe of an escapement of income in future. Without prejudice to the above 2. The Ld CIT(A) erred in facts circumstances of the case and in law in dismissing ground taken against AO's action of commencing assessment proceedings without dealing with specific objections raised by the Appellant to the reasons recorded for re- opening Without Prejudice to above grounds - The Following Ground is taken

3. The Ld CIT(A) erred in facts circumstances of the case and in law in holding additions that AO made U/s 68 is to be made u/s 69A without giving any notice of his intention and giving opportunity to the appellant to defend. Reason given by the Id CIT(A) in dismissing the appeal and thus confirming the additions that the AO made, are wrong, insufficient and contrary to facts and evidence on record and in law. Appellant craves leave to add, amend, alter or delete any or all the above grounds of appeal 2.1. The ground Nos. 1 & 2 raised by the assessee is challenging the validity of reassessment and alleged violation of procedures by the ld. AO while framing the re-assessment.

2.2. None appeared on behalf of the assessee. Sufficient opportunities were given to the assessee in this regard and assessee had not ensured its presence through an authorized representative on 01/11/2021, 02/05/2022, 23/06/2022, 19/07/2022 and 19/10/2022 i.e. today. In between 01/11/2021 and 02/05/2022 the Bench did not function. This cavalier attitude of the assessee proves that it is not interested in prosecuting this appeal by appointing the authorized representative.

4. The only surviving ground to be adjudicated in this appeal is as to whether the ld. CIT(A) was justified in upholding the addition made in respect of cash on the basis of peak credit amounting to Rs.7,84,114/- in the facts and circumstances of the case.

4.1. We have heard ld. DR and perused the materials available on record. The ld. AO received information that assessee had deposited a sum of Rs.3,59,000/- in cash in bank account No.500200301000236 maintained with Vijaya Bank, Bandra (E), Mumbai. Later, the entire bank statements were obtained by the ld. AO. From the perusal of the said bank statements, the ld. AO observed that assessee had deposited a sum of Rs.11,60,000/- from 01/04/2009 to 08/06/2009 in the said bank account in cash. The ld. AO sought to examine the source of cash deposits made by the assessee in the said bank account. The ld. AO also requested assessee to provide cash book, bank book and cash flow statement to explain the source of cash deposits. The ld. AO observed that no explanation was forthcoming from the side of the assessee in this regard and accordingly, proceeded to treat the said sum of Rs.11,60,000/- representing cash deposits as unexplained cash credit u/s.68 of the Act and completed the assessment. The ld. CIT(A) observed that for such unexplained money, the right section to apply would be Section 69A of the Act, and accordingly, proceeded to examine the addition from the context of Section 69A of the Act as against Section 68 of the Act made by the ld. AO. The ld. CIT(A) however, fairly went through the cash book from 01/04/2009 to 30/06/2009 and arrived at the daily cash balance thereon and found the peak credit of negative cash balance at Rs.7,84,113.50 on 13/05/2009. Accordingly, the said peak negative cash balance of Rs.7,84,114/- was brought to tax by the ld. CIT(A) as against Rs.11,60,000/- made by the ld. AO. Aggrieved, the assessee is in appeal before us.

3.3. From the perusal of the order of the ld. CIT(A), we find that the ld. CIT(A) has sought to examine the issue from the context of Section 69A of the Act. It is not in dispute that there were cash deposits to the tune of Rs.11,60,000/- in the bank account of the assessee. Hence, the ownership of the said money is proved beyond doubt. It is not in dispute that the ld. CIT(A) had also taken into account previous cash withdrawals made by the assessee from the said bank account. From the perusal of the cash book from 01/04/2009 to 30/06/2009, we find that the ld. CIT(A) had correctly arrived at the peak credit balance of Rs.7,84,114/- being the negative cash balance on 13/05/2009. No other contrary evidences were placed on record from the side of the assessee to prove that assessee had indeed sufficient cash balance in its kitty to explain cash deposits. Hence, we do not deem it fit to interfere in the said order of the ld. CIT(A). Accordingly, the ground No.3 raised by the assessee is dismissed.