SMT. SHARMILA DEVI DUNGARWAL,NEEMUCH vs. THE ITO, NEEMUCH

Smt. Sharmiladevi ITA 99/2017

आयकर अपील�य अ�धकरण, इंदौर �यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE

BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER

ITA No.99/Ind/2017 Assessment Year: 2009-10

Smt. Sharmiladevi Income tax Officer Dungarwal Neemuch Vs. Neemuch (Appellant) PAN No.AAOPD-5708Q

Appellant by Shri S.N. Agrawal & Shri Pankaj Mogra Respondent by Shri K.G. Goyal Date of Hearing 24.4.2018 Date of Pronouncement 27.4.2018

ORDER PER MANISH BORAD, AM.

This appeal filed by the assessee pertaining to Assessment

Year 2009-10 is directed against the order of ld. Commissioner of -

Income-tax (Appeals), Ujjain, dated 23.11.2016 which is arising out

Smt. Sharmiladevi ITA 99/2017 of the order u/s 143(3) of the Income Tax Act dated 15.9.2014

framed by the ITO, Neemuch.

“1.1 That on the facts and in the circumstances of the case, the

learned CIT(A) erred in confirming the reassessment

proceedings as started by the ld. A.O. u/s 148 of the

Income Tax Act without properly appreciating the facts of

the case and submission made before him. The said

proceedings as started by A.O. and confirmed by the

CIT(A) are illegal and bad in law. The reassessment

proceedings so initiated and assessment framed thereon

requires to be quashed.

1.2 That on the facts and in the circumstances of the case, the

learned CIT(A) erred in confirming the other additions as

made by the ld. A.O. while passing the order u/s 143(3) of

the Act even when no addition was made in respect of

reason as recorded for issuance of the notice u/s 148 of

the Act.

Smt. Sharmiladevi ITA 99/2017 1.3 That on the facts and in the circumstances of the case, the

learned CIT(A) erred in not deciding the point raised before

him to the effect that A.O. acquires jurisdiction to issue

notice u/s 143(2) & 142(1) of Income Tax Act, 1961 only on

receipt of return in response to notice u/s 148, or letter to

the effect that return filed earlier be treated to be in

response to notice u/s 148.

WITHOUT PREJUDICE TO THE ABOVE

learned CIT(A) erred in maintaining the addition of

Rs.22719/- out of Car Expenses, Mobile expenses,

travelling expenses, shop expenses and depreciation

against addition of Rs. 34078/- made by the A.O. without

properly appreciating the facts of the case and submission

made before him and more so without affording proper

and reasonable opportunity.

learned CIT(A) erred in maintaining the addition of

Rs.96000/- as made by A.O. on account of low household 3

Smt. Sharmiladevi ITA 99/2017 expenses purely on assumption without properly

appreciating the facts of the case and submission made

before him more so without affording proper and

reasonable opportunity.”

assessee is an authorised dealer of Birla Tyres and engaged in

purchase and sale of tyres and tubes. The income of Rs.3,30,890/-

was declared in the return of income filed on 30.9.2009. The return

was processed u/s 143(1)(a) of the Act. Subsequently, as per the

AIR information the Assessing Officer noticed that during the F.Y.

2008-09 the assessee has deposited cash of Rs.17,92,600/- in the

saving bank account of Union Bank of India, Neemuch Branch. The

Assessing Officer accordingly issued notice u/s 148 of the Act for

initiating reassessment proceedings u/s 147 of the Act. During the

course of assessment proceedings the Assessing Officer was

satisfied that the alleged cash deposit was actually the sales which

were deposited in cash in the bank account of sole proprietor and

thereafter cheques were issued in the account of the proprietorship

concern. The learned Assessing Officer made certain disallowances

Smt. Sharmiladevi ITA 99/2017 of expenses at Rs. 34,078/- and also made addition for low

household withdrawals at Rs.96,000/- and assessed the income at

Rs.4,60,968/-

Commissioner of Income Tax (Appeals) challenging the validity of

notice issued u/s 148 of the Act as well as the reassessment

proceedings and also challenged the additions made by the

Assessing Officer but partly succeeded as the learned

Commissioner of Income Tax (Appeals) dismissed all other grounds

except scaling down the disallowance of expenses by Rs. 11,359/-.

issues :-

(i) Legal issue challenging the reassessment proceedings

(ii) On merits challenging the additions confirmed by the CIT(A)

no material available with the Assessing Officer on the basis of

which it could issue notice u/s 148 of the Act to initiate the

reassessment proceedings. As regards the disallowance of expenses

Smt. Sharmiladevi ITA 99/2017 it was contended that no mistake was noticed by the Assessing

Officer in the books of accounts and the disallowances are made on

estimate basis.

supporting the orders of the lower authorities.

available on record. Apropos the first issue about validity of notice

u/s 148 of the Act and the reassessment proceedings u/s

147/143(3) of the Act, we find that the return of income filed on

30.9.2009 was processed u/s 143(1)(a) of the Act which means that

there was no scrutiny of accounts and records of the assessee.

Subsequently, the Assessing Officer received information on the

basis of AIR received by the Income Tax Department which revealed

that during the F.Y. 2008-09 total cash of Rs. 17,92,602/- has been

deposited in the savings bank account of the assessee held with

Union Bank of India, Neemuch. In our view, this information

supported by the material; evidence in the shape of AIR information

was sufficient enough for the Assessing Officer to issue notice u/s

148 of the Act. The action taken by the Assessing Officer further

Smt. Sharmiladevi ITA 99/2017 seems to be correct because the alleged cash was deposited in the

savings bank account and one cannot ignore the possibility that the

income may have been concealed and not duly reflected in the

income tax return. We, therefore, in the given facts and

circumstances of the case, find no infirmity in the findings of the

learned Commissioner of Income Tax (Appeals) confirming the

action of the Assessing Officer in issuing notice u/s 148 of the Act

and to make the reassessment u/s 147 of the Act.

9.`In the result, the assessee fails on the legal ground and

according we dismiss ground no. 1 raised by the assessee.

challenged the findings of the learned Commissioner of Income Tax

(Appeals) confirming the addition of Rs.22,719/- on account of

estimated disallowance of car expenses, mobile expenses, travelling

expenses and depreciation and also against the finding of the

learned Commissioner of Income Tax (Appeals) confirming the

addition for household expenses of Rs. 96,000/-, from perusal of

the assessment order we find that primarily the Assessing Officer

did not find any irregularity in the books of accounts of the

Smt. Sharmiladevi ITA 99/2017 assessee which were duly audited and all the financial statements

were placed on record. The alleged cash deposit was also duly

explained by the assessee through its account books and the

Assessing Officer was satisfied with the information and he has

mentioned that the alleged cash was in the nature of sales during

the year. The Assessing Officer after failing to make any addition on

the count of alleged cash deposit, further scrutinised the account

books and without pointing out any specific mistake made an ad

hoc disallowance of 15% of various expenses treating them to be

personal in nature. Similarly, addition for household withdrawals

was made just for the lack of information to be received by the

assessee. In our view, to make such disallowances the Assessing

Officer should have made a test check of the bills and vouchers and

should have brought on record sample of such expenditure which

were personal in nature and had been booked as business

expenditure. However, in the instant case, no such finding has

been brought on record by the Assessing Officer. We, therefore,

find no basis for the disallowance made by the Assessing Officer for

expenses as well as household withdrawals. We accordingly delete

Smt. Sharmiladevi ITA 99/2017 the alleged addition of Rs.22,719/- and Rs. 96,000/- and allow

ground nos. 2 and 3 of the assessee’s appeal.

The order pronounced in the open Court on 27 .4.2018.

SD/- SD/-

( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 27 April, 2018 Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By order Private Secretary/DDO, Indore 1. Date of dictation : 8.2.2018 2. Date on which the typed draft is placed before the Dictating Member : 9.2.2018 3. Date on which approved draft comes to the Sr.P.S./P.S: 4. Date on which the fair order is placed before the dictating Member for pronouncement: 5. Date on which the fair order comes back to the Sr.P.S./P.S.: 6. Date on which the file goes to the Bench Clerk: 7. Date on which the file goes to the Head Clerk: 8. The date on which the file goes to the Assisstant Registrar for signature of the order. 9. Date of Despatch of the Order:

Smt. Sharmiladevi ITA 99/2017