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Before: Shri V. Durga Rao & Shri G. Manjunatha
O R D E R
PER V. DURGA RAO,, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), Salem, dated 16.09.2020 relevant to the assessment year 2009-10. Besides challenging reopening of assessment under section 147 of the Income Tax Act, 1961 [“Act” in short], the assessee has disputed confirmation of unexplained investments under section 69A of the Act.
Brief facts of the case are that a survey under section 133A of the Income Tax Act, 1961 [“Act” in short] was conducted on 26.02.2009 in the business premises of the assessee. During the course of survey action, books have been impounded. In the books the assessee had made entries for loan debtors. Based on the entries, the assessee has disclosed income of ₹.48.67 lakhs for the assessment year 2009-10 for assessment. Though the amount accepted for assessment, no return of income for the assessment year 2009-10 was filed. Accordingly, notice under section 148 of the Act was issued on 29.02.2012. No response made to the notice. Notice under section 142(1) of the Act was issued on 24.08.2012 calling for return of income and produce books of account. Since there was no response the above notices, the Assessing Officer concluded best judgement assessment under section 144 of the Act dated 27.03.2013 by considering the survey report and materials available on record and determined the total taxable income of the assessee at ₹.74,93,624/-. On appeal, after considering the materials submitted during the course of appellate proceedings, the ld. CIT(A) partly allowed the appeal of the assessee.
On being aggrieved, the assessee is in appeal before the Tribunal. None appeared on behalf of the assessee despite service of notice through RPAD. However, the assessee has filed written submissions. Hence, we proceed to decide the appeal on merits after hearing the ld. DR.
We have heard the ld. DR, perused the materials available on record and gone through the orders of authorities below and the written submissions filed by the assessee. The first effective ground raised by the assessee relates to issue of notice under section 148 of the Act for the assessment year 2009-10 on the basis of information pertaining to the assessment year 2008-09 ought to have been quashed.
4.1 With regard to the reopening of assessment under section 147 of the Act, before the ld. CIT(A), the assessee has relied on the judgement of the Hon’ble Supreme Court in the case of CIT v. Raman & Co 67 ITR 11. By considering the said judgement, the ld. CIT(A) has observed that in an earlier part of the said judgement, it is stated that ‘information’ means ‘instruction or knowledge derived from an external source’, but, these words cannot be constructed as implying that the source must be outside the record, the observations quoted above clearly lay down that the information may be gathered from the assessment record itself. By observing that the information as to subsequent events which bring to light the material circumstances known but existing at the date of the original assessment would equally justify a reassessment under this section and dismissed the ground raised by the assessee.
4.2 By considering the above observations as well as the fact that the survey under section 133A of the Act was conducted on 26.02.2009 and based on the entries the assessee has disclosed income of ₹.48.67 lakhs for assessment for the assessment year 2009-10. Moreover, notice under section 148 of the Act was issued on 29.02.2012, which is well within the period prescribed under the Act and thus, we find no merit on the submissions of the assessee with regard to reopening of assessment. Accordingly, the ground raised by the assessee is dismissed.
The next effective ground raised in the appeal of the assessee relates to confirmation of addition of ₹.16,69,295/- by the ld. CIT(A). The main facts submitted before the ld. CIT(A) and accepted by him are that the assessee was involved in the business of lorry transport and she was regularly offering her income under section 44AE(5) of the Act and previous year assessment orders and the appellate orders also confirm this fact. The Assessing Officer has not found anything contrary to the above fact. The assessee has also received money from her daught and the appellate orders passed for the earlier assessment years confirm the above facts. With regard to the claim that the assessee has overdraft of ₹.11 lakhs from Karur Vyshya Bank, the ld. CIT(A) has noted that there is no direct nexus between the overdraft and the investment. It may be true, as observed by the ld. CIT(A), that normally overdraft is resorted to meet certain expenditure or payment. We do not find any fault on the above observations of the ld. CIT(A). The ld. CIT(A) has also found after verification of certification of the overdraft by the bank concerned was to the extent of only ₹. 9 lakhs. However, the ld. CIT(A) has observed that the claim is simply an afterthought standing against the facts of the case appears to be not correct. Before arriving to the above conclusion, the ld. CIT(A) should have called for the details of usage of the amount of ₹.9 lakhs. By way of written submissions, the assessee has admitted that ₹.9 lakhs alone were borrowed according to the bank’s two certificates were the sources for loans given to debtors. Since the ld. CIT(A) has observed that the overdraft is resorted to meet certain expenditure or payment, we also of the view that money cannot be withdrawn from the overdraft. However, we find force in the submissions of the assessee that out of the source of ₹.9 lakhs, loans were given to the debtors. Accordingly, against the addition confirmed by the ld. CIT(A) of ₹.16,69,295/-, we allow relief to the assessee to the extent of ₹.9 lakhs, and the balance addition is sustained since the assessee could not substantiate with any convincing explanation for the balance amount.
In the result, the appeal filed by the assessee is partly allowed. Order pronounced on the 16th September, 2022 in Chennai.