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Income Tax Appellate Tribunal, “SMC” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI PARTHA SARATHI CHAUDHURY, JM
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM :
This appeal preferred by the assessee emanates from the order of Ld. CIT(Appeals)-2, Aurangabad dated 01.08.2017 for the assessment year 2008- 09 as per grounds of appeal on record.
2 ITA No. 2631/PUN/2017 A.Y.2008-09
At the time of hearing, the Ld. AR of the assessee submitted that he
wants to argue the legal ground first i.e. whether the reasons recorded for re-
opening of assessment by the Assessing Officer forms ‘reason to believe’ that
income has escaped assessment as mandated within the provisions of section
147/148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
We have therefore, perused the copy of the reasons recorded placed in
paper book before us which is extracted as under:-
Name and address of the assessee Shri Karande Swapnil Kisan N-9, K-56-5, Pawan Nagar, CIDCO, Aurangabad A.Y. 2008-09
PAN ARXPK6056E
REASONS FOR ESCAPEMENT OF INCOME U/S.147 OF THE ACT.
“As per the AIR/CIB information received, the above assessee has deposited the Cash amount of Rs.16,04,400/- in his saving bank account during the F.Y.2007-08. Letter of verification of financial transaction was issued on 26/12/2014 to verify the genuineness of the transaction but the assessee is not responded the same. As per para-3 of the said letter, the assessee was required to furnish the details of sources of the financial transaction along with copies of documents in support of his claim. On verification of AST data, it is seen that the assessee has not furnished his return of income for the A.Y.2008-09. The assessee has not offer the amount of Rs.16.04 lakh for taxation. In view of the above, I have thus reason to believe that the amount of Rs.16,04,400 has escaped assessment within the meaning of section 147 of the Act. Issue notice u/s.148 of the I.T. Act, 1961. Sd/- ( S.K. Bhagat) Income Tax Officer, Ward 2(3), Aurangabad.”
That on perusal of the reasons, it is clear that with regard to the cash
deposit of Rs.16,04,400/- in F.Y.2007-08 relevant to assessment year 2008-
3 ITA No. 2631/PUN/2017 A.Y.2008-09
09, the letter of verification of financial transaction was issued on
26/12/2014 to verify the genuineness of the transaction but the assessee has
not responded to the same.
On this aspect, the Ld. AR stated that there was change of address and
the assessee did not receive any notice or letter as such and therefore, was
not able to respond. Re-enquired whether the change of address was
communicated by the assessee to the Department, the Ld. AR submitted that
change of address was not communicated to the Department by the assessee.
Furthermore, coming back to the reasons recorded, the assessee was required
to furnish details of sources of the financial transaction along with copies of
documents in support of his claim. This was also not done by the assessee.
Further, in the reasons recorded, it is stated on verification of AST data, that
the assessee has not furnished his return of income for the assessment year
2008-09. The assessee has not offered the amount of Rs.16.04 Lakh for
taxation. In view of above, the Assessing Officer has reason to believe the
amount of Rs.16,04,400/- escaped the assessment within the meaning of
section 147 of the Act. Therefore, there are number of reasons in this case
because of which, the Assessing Officer reopened the assessment which are
as follows:
i) Letter of verification issued on 26/12/2014 to verify the genuineness of transaction was not responded to by the assessee.
ii) The assessee was required to furnish the details of sources of the financial transaction along with copies of documents in support of his claim. iii) As per AST data, the assessee has not furnished his return of income for the A.Y.2008-09. The assessee has not offered the amount of Rs.16.04 lakh for taxation.
4 ITA No. 2631/PUN/2017 A.Y.2008-09
These are sufficient reasons for forming ‘reason to believe’ that income
has escaped assessment for reopening of the assessment and therefore, the
assessee fails in this legal ground.
In view of the matter, we held that the Assessing Officer was justified in
reopening of the assessment in this case. Therefore, legal ground of the
assessee is dismissed.
That so far as the grounds on merits are concerned, the assessee
contends that the entire receipts/cash deposits are considered as income,
without considering the income/profit embedded in the receipts/cash
deposits. The fact that the assessee has carried two businesses in that year
has not been considered by the Ld. CIT(Appeals). The Ld. CIT(Appeals)/Ld.
AO has not brought any material on record to justify that the above receipts
are net income of the assessee. That for verification of this aspect, it was
prayed by the Ld. AR of the assessee that the matter may be restored to the
file of the Ld. CIT(Appeals).
The Ld. DR did not object to the request of the assessee.
On hearing both the sides on this issue, we are of the considered view
that the grounds on merits needs to be adjudicated after detailed factual
verification through a speaking order by the Ld. CIT(Appeals).
In view of the matter, we set aside the order of the Ld. CIT(Appeals) and
the grounds on merits are remanded to the file of the First Appellate
Authority for adjudication in compliance with the principles of natural justice.
5 ITA No. 2631/PUN/2017 A.Y.2008-09
In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced on 07th day of February, 2019.
Sd/- Sd/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER
पुणे / Pune; �दनांक / Dated : 07th February, 2019. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-2, Aurangabad. 4. The Pr. CIT-2, Aurangabad. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy // आदेशानुसार / BY ORDER,
�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.
6 ITA No. 2631/PUN/2017 A.Y.2008-09
Date 1 Draft dictated on 06.02.2019 Sr.PS/PS 2 Draft placed before author 06.02.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order