SUPASH AGARWAL,SURAT vs. ITO, WARD -45(2), KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA Before Shri Sanjay Garg, Judicial Member Assessment Year: 2011-12 Supash Agarwal……...................................………….………………….……Appellant 4,CF Tower, Ratna Jyoti Apartment, Vesu Surat-395007. [PAN: ACYPA2036Q] vs. ITO-45(2), Kolkata………….…….…..…...............……........……...…..…..Respondent Appearances by: Shri Sunil Kr. Agarwal, AR, appeared on behalf of the appellant. Smt. Ranu Biswas, Addl. CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : May 30, 2022 Date of pronouncing the order : May 30, 2022

ORDER

Per Sanjay Garg, Judicial Member:

“1. On the facts and circumstances of the case and in law, initiation of reassessment proceedings u/s 147/148 on 29.03.2018 is bad in law as there is no tangible material which has live link with the formation of belief for the alleged escaped income of Rs.20 lakhs, while the alleged document/transaction is not related/belonged to the assessee; the alleged initiation which is based on irrelevant documents/ transactions merely on presumption and surmises is invalid, hence, is liable to be quashed.

2. On the facts and circumstances of the case and in law, initiation of reassessment proceedings u/s147/ 148 on 29-3-18, 1s bad 1n law, void-ab-initio & without having jurisdiction, as there is no proper/ valid sanction as required u/s151(1) from Pr.CIT had been obtained which is a pre-requisite for initiating proceedings u/s147/ 148 in a case of after lapse of 4 years from the end of the relevant AY, and in absence of this, reassessment proceedings /s147/ 148 is bad in law, void-ab-initio and is liable to be.

3. On the facts and circumstances of the case and in law, the ld CIT(A) has erred in sustaining the addition of Rs. 10 lakhs on the count of unexplained cash credit u/s 68, while no such amount has been received/credited in the books of account or any bank accounts of the assessee in the relevant AY11-12; the alleged transaction is not related to Assessment Year: 2011-12 Supash Agarwal the assessee in any manner; the arbitrary addition sustained without having any legal basis, is liable to be deleted.

4. On the facts and circumstances of the case and in law, the ld CIT(A) has erred in sustaining the alleged addition of Rs. 10 lakhs, while copy of alleged 'diary impounded' from third party premises on 8-2-15 in search proceedings on Nadiadwala Group, has not been provided confronted to the assessee and even without giving proper opportunity to cross examine the alleged witness which is used against the assessee for making addition, and thus, it is violation of principle of natural justice; hence, the order passed by the ld CIT(A) be treated as illegal, null & void-ab-initio, is liable to be quashed.

5. The appellant craves 1eave, to add, urge, alter, modify or withdraw any ground/s before at the time of hearing.”

The contents of the said letter/information as extracted from the order of the CIT(A) were as under:

Sharing of information in the case of Ramavtar Agarwal (Supash Agarwal) (PAN- ACYPA20360):

Ann Page Amount PAN (L) Amount PAN (B) Amount Date FY Medium exure no. received Given to 25 Ramavtar ACYPA2036Q Trilok S 200000 5.1.2010 2010- Cash Agarwal 11 35 Ramavtar ACYPA2036Q Shree 500000 4.12.2010 2010- Cheque Jagmohan 11 Walia 3 66 Ramavtar ACYPA2036Q Shree 500000 4.12.2010 2010- Cheque Agarwal Jagmohan 11 Walia 3 69 Ramavtar ACYPA2036Q Trilok S 200000 5.1.2010 2010- Cash Agarwal 11 3 75 Ramavtar ACYPA2036Q Kamal AACPG9650J 600000 1.1.2011 2010- Cheque Agarwal Gagodiya 11 2

Assessment Year: 2011-12 Supash Agarwal Total 2000000 The A.O reopened by the case under section 147 of the Income Tax Act 1961. The Assessing Officer observed that during the course of survey u/s 133A conducted in the case of M/s Dayal Tours and Travels (I) Pvt. Ltd. on 08.12.2015, a diary was impounded which belonged to Shri Gauri Shankar Choudhary, father of Shri Nitin Choudhary, Director of M/s Dayal Tours and Travels (I) Pvt. Ltd. and the name of the appellant was found in the same diary. The Assessing Officer observed that the appellant did not attend the assessment proceedings. The Assessing Officer made the assessment u/s 144 of the Income Tax Act by making an addition of Rs.20,00,000/- on account of unexplained expenditure.

Assessment Year: 2011-12 Supash Agarwal any such unexplained deposits/investment. The name of the chart/diary has been mentioned as that of Shri Ramavtar Agarwal, deceased father of the assessee. There is no allegation either by the Assessing Officer or by the CIT(A) that the name of the assessee was mentioned in the said diary. However, the ld. DR has stated that the PAN number of the assessee has been mentioned in the chart. I am not convinced with the above argument of the ld. DR. The entries in the diary of the alleged one Shri Gouri Shankar Choudhary were in the name of Shri Ramavtar Agarwal and not in the name of the assessee. It has been alleged that the disputed amount of Rs.10,00,000/- was given by the assessee through cheque. However, there is no mention either of any bank account of the assessee or any other details to show that the said amount was paid by the assessee through cheque. The ld. Counsel for the assessee has relied upon paper-book page 20 onwards which is the copy of the bank account statement of the assessee to submit that the assessee did not issue any alleged cheque of Rs.10,00,000/- to any such person. However, otherwise if the payment was made through cheque then how the same may be alleged to be out of unexplained sources especially when there is no allegation that the deposit in the bank account of the assessee was from any unknown source of income. I do not find any justification on the part of the CIT(A) in confirming the addition of Rs.10,00,000/- and the same is ordered to be deleted.