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Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,
Before: SHRI N.K. BILLAIYA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:
This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] – 13, Delhi dated 26.02.2019 pertaining to assessment year 2010-11.
Grievances of the assessee read as under:
“1. That the initiation of the reassessment proceedings u/s 147/148 beyond four year is not valid in law:-
On the information received from AST System on borrowed (i) satisfaction without recording reasons that income escaped assessment on account of failure on the part of the assessee to disclosure fully and truly all material facts necessary for assessment. The competent authority had not applied his mind before (ii) recording satisfaction for approval not in accordance with law ignoring the judgment of Har Kishan Sunder Lai Virmani V/s DCIT (Guj) 330 CTR 214.
2. That the Ld. Assessing Officer has erred in law in treating the deposit of Rs. 19,78,900/- in the saving bank account which is not a book of account, as income, of the assessee.
3. That the Ld. Lower Authorities has gone wrong in rejecting the explanation and evidence regarding deposits considering it to be an, after thought and there was no occasion for gift against law.
4. That the Ld. Lower Authority in the facts of the case without properly appreciating the explanation of the assessee regarding deposit of Rs. 19,78,900/- has erred in confirming the addition of Rs. 18,24,100/- on account of deposit in Bank account even when the return was filed u/s 44AF on the turnover of Rs. 23,62,098/-
as explained in the course of assessment proceedings and the appellate proceedings. The income should have been computed u/s 44AF in view of judgment of CIT V/s Pradeep Shanti Lai Patel (2014) 221 Taxman 436(Gujrat High Court).
5. That the Ld. AO has erred in not allowing deduction/s of Rs. 2935/- claimed u/s 80C in the assessment order.
Charging of interest u/s 234A and 234B is illegal and against law.
The appeal is within limitation and is filed after payment of statutory fee on 16/03/2019.
Representatives of both the sides were heard at length. Case records carefully perused.
During the course of scrutiny assessment proceedings and on the basis of information available in ITS statement on AST System, the Assessing Officer came to know that the assessee has made cash deposits amounting to Rs.19,78,900/– in his State Bank account maintained with HDFC bank. The Assessing Officer issued show cause notice asking the assessee to explain the source of cash deposited in the HDFC bank.
The assessee filed detailed reply giving gross receipts of his business. The Assessing Officer completed the assessment proceedings by holding as under:
“ I n response to the query, the assessee has furnished written reply which is re-produced as under:-
“Kindly refer to the proceedings going on in this case for the A.Y. 2010- 11 where the cash has been deposited in a/c No. 04791000039892 with HDFC Meham. Chowk, Bhiwani exceeding Rs. 10,00,000/ in saving bank account. In this regard it is submitted that the assessee has filed his return declaring income of Rs. 154994/- on 29.07.2010. The assessee has due to omission has taken these figures as total turnover of the case as against total net income of the assessee. Now on issuance of notice u/s 148 by your office the assessee has submitted his return showing total turnover of Rs. 2362098/- and net income has been declared at Rs. 154800/- u/s 44AF of the Income-tax Act, 1961. The assessee has revised his return of income u/s 139(5) of the income- tax Act, 1961 yet it is the original return filed in response to notice issued u/s 148 of the Income-tax Act, 1961 for A.Y. 2010-11. While submitting the return electronically against notice issued u/s 148, it reflects as original return rather a revised return of income. The same may kindly be considered as a valid return of income.
No doubt the assessee has deposited cash exceeding Rs. 10,00,000/- in his saving bank account as mentioned above. The same is explained as per annexure A. Any other information if required my kindly be intimated.”
I have gone through all facts of the case and consider that all these are after thoughts. A story regarding the source of cash deposits is prepared and found no weight age being the assessee is not clear whether the return filed in response to notice issued u/s 148 or in accordance with the provisions of section 139(5). The exceeded turnover shown in the return is just to cover the story of cash deposits. Therefore, after going through the facts and circumstances of the case, all the cash deposits during the year under consideration is considered as unexplained income of the assessee. Therefore, I, hereby make an addition of Rs. 19,78,900/- towards the declared income of the assessee. 1 am satisfied that the assessee concealed the particulars of his income. Therefore, penalty proceedings u/s 271(1)(c) read with section 274 of the Income-tax Act are initiated separately.”
6. The assessee carried the matter before the ld. CIT(A) and explained the source of cash deposited in the HDFC bank account.
7. After considering the facts and submissions, the ld CIT(A) was convinced with the source to the extent of Rs.1,54,800/– being returned income of the assessee and confirmed the balance amount of Rs.18,24,100/–.
Before me, the ld. AR submitted a paper book containing 70 pages which contains the complete details of deposit entry in the bank account with HDFC and also explanation of deposit entry in HDFC bank.
Surprisingly, there is no whisper about these explanations/documents neither in the assessment order nor in the order of the first appellate authority. Therefore, in the interest of justice and fair play, I deem it fit to restore the entire quarrel to the file of the Assessing Officer. The Assessing Officer is directed to examine the documentary evidences/ explanation relating to cash deposited in HDFC bank account after giving reasonable and fair opportunity of being heard to the assessee.
The assessee is directed to furnish all necessary details in support of his contention..
In the result, the appeal filed by the assessee in is allowed for statistical purposes.
The order is pronounced in the open court on 16.09.2021.