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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
O R D E R Per Mahavir Singh, VP: This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-29, Mumbai (‘CIT(A)’ for short) in appeal no. Pr. CIT- 29/263/29(2)(3)/15-16 vide order dated 03.11.2015. The assessment was framed by the ITO-29(2)(3), Mumbai u/s. 143(3) r.w.s 263 of the Income Tax Act, 1961 (‘the Act’ hereinafter) for the assessment year (A.Y.) 2009-10 vide his order dated 29.12.2016.
The only issue in this appeal of the assessee is against the order of the ld. CIT(A) confirming the action of the Assessing Officer (A.O. for short) in making the addition u/s. 68 of the Act amounting to Rs.10 lacs. For this, the assessee has raised the first jurisdictional issue that if the issue is not arising out of the revision order passed by the (AY: 2009 -10) Mahesh Malde vs. ITO ld. CIT, the A.O. cannot exceed the jurisdiction. For this, the assessee has raised the following two grounds:
1. 1. On the facts and circumstances of the case, the ld. Commissioner of Income Tax (Appeal) confirmed the order passed u/s.143(3) r.w.s. 263 of the Income Tax Income Tax Act, 1961, 1961 (‘ITAT’) by Assessing Officer as valid even when the said assessment order is bad in law and void-ab-initio.
2. On the facts and circumstances of the case, the ld. Commissioner of Income Tax (Appeal) grossly erred in confirming the addition u/s.68 of the ITA of Rs.10,00,000/- made by the Assessing Officer. Without prejudice to above, The learned Commissioner of Income Tax (Appeal) grossly erred in confirming the addition u/s.68 of the ITA without appreciating the fact that the appellant has explained the source of deposit.
3. We have heard the rival contentions and gone through the facts and circumstances of the case. Brief facts are that the original assessment was framed for the relevant assessment year 2009-10 by ITO, Ward-23(2)(4), Mumbai u/s.143(3) r.w.s. 147 of the Act vide order dated 21.03.2014. Subsequently, PCIT-29, Mumbai issued show cause notice u/s.263 of the Act for revising the assessment framed by the A.O. on two reasons: (1) that the assessee has introduced capital in proprietary concern M/s. Arihant Fabrics amounting to Rs.9.70 lacs and; (2) the source of payment made for investment in immovable property as reflected in AIR not verified.
4. The PCIT revised the assessment vide order dated 3.11.2015, whereby these two issues were set aside vide para 7 as under: 7. After perusal of the details available on record, I am of the opinion that the assessment order u/s.143(3) r.w.s. 147 of the Income Tax Income Tax Act, 1961, 1961 passed by the A.O. without verifying the varacity of claim and law and without applying mind, has accepted the claims and contention of the assessee. Therefore, the impugned assessment order is set aside on the points raised in the show cause notice with directions to pass a fresh assessment order after making complete inquiries on the facts to verify the genuineness of the claims made by the assessee.
5. Subsequently, the A.O. framed the assessment in consequence to the revision order passed by the PCIT u/s. 263 of the Act and framed the assessment u/s. 143(3) r.w.s. 263 of the Act dated 29.12.2016, whereby the A.O. has separately considered the (AY: 2009 -10) Mahesh Malde vs. ITO deposit of Rs.10 lacs in the Shamrao Vithal Bank on 15.04.2008 as unexplained deposits. The A.O. recorded this fact in para 6 as under:
….. Notwithstanding what is stated in para 6 above, addition of Rs.10,00,000/- is made on account of unexplained deposists in the Shamrao Vithal Bank as on 15.04.2008, as the assessee has not explained this deposit and on that day there is no cash balance available in his any other account to justify / explain the same. The assessee has also not submitted the required evidence for the purchase of property so his statement that properties are purchased with available cash balance is also not justified. 6. The ld. CIT(A) also confirmed the action of the A.O. by observing in para 4 as under: 4. ….. The A.O. on perusal of bank statement of Shamrao Vital Co. Op. Bank which shows that the assessee has deposited Rs.10 lacs on 15.04.2008 which is stated to be out of the cash balance. Since the assessee has not explained the source of these deposits as there is no chas balance available in any other accounts for purchasing of immovable properties. The A.O. has added the deposit of Rs.10 lacs to the total income of the assessee as unexplained cash credit u/s.68 of the I.T. Act. The appellant in his submissions explained that the appellant had cash balance as on 31.03.2008 and out of this cash balance, the appellant has deposited Rs.10 lacs on 15.04.2008. Since the appellant could not substantiate the source of funding for the deposit made in the above said bank i.e. Shamrao Vithal Co.op. Bank, the addition made by the A.O. is confirmed, this is in addition to the total income assessed as per the order u/s.143(3) r.w.s. 147 of the I.T.Act. Hence, this ground of appeal
is dismissed.
7. Now before us, the ld. Counsel of the assessee took us through the show cause notice issued u/s.263 of the Income Tax Act, 1961 for the revision of the assessment as well as the revision order passed by the PCIT u/s. 263 of the Act and stated that this amount of Rs.10 lacs in Shamrao Vithal Co.op. Bank was never the subject matter and hence, the A.O. has no authority under the provisions of the Act to add this amount.
We have considered this fact and when ld. Sr. DR was asked to comment, she only stated that the matter can be remanded back to the file of the A.O.
We have heard the rival contentions and gone through the facts and circumstances of the case. We note that the amount of Rs.10 lacs deposited in Shamrao Vithal Co.op. Bank is not the subject matter of revision proceedings u/s.263 of the Act. Even then, the (AY: 2009 -10) Mahesh Malde vs. ITO A.O. made the addition of this amount while giving effect to the revision order and passed the order u/s.143(3) r.w.s. 263 of the Act. In our view, the A.O. has exceeded his jurisdiction in making this addition and, hence, we delete this addition. The orders of the lower authorities are reversed and allow the appeal of the assessee.
In the result, this appeal by the assessee is allowed. Order pronounced in the open court on 18.03.2021..