Loading judgment…
No AI summary yet for this case.
Before: Shri Amit Shukla & Shri L.P. Sahu
ORDER Per L.P. Sahu, A.M.: This is an appeal filed by the assessee against the order of ld. CIT(A)- Meerut dated 28.11.2014 for the assessment year 2009-10 on the following revised grounds of appeal : “1. That on facts and in the circumstances of the case, the learned assessing officer erred in law, in invoking the provisions of section 68 of the Act, and thereby making the additions in the income of the assessee / appellant.
2. That on facts and in the circumstances of the case, the learned lower authorities did not appreciate that the provisions of section 68 of the Act are not at all applicable in this case, as the assessee/appellant, admittedly, is not maintaining any books of account. As such, the provisions of section 68 are not at all applicable, therefore, the addition of Rs 13,78,500 /- made on account of unexplained cash credit in the bank account, by applying the provisions of section 68 of the Act, is liable to be quashed / deleted.
3. That on facts and in the circumstances of the case, the learned Commissioner of Income Tax ( Appeals ) erred in law in upholding and sustaining the addition of Rs 13,78,500 /- made on account of unexplained cash credit in the bank account by invoking the provisions of section 68 of the Act.”
The assessee has also raised additional grounds of appeal vide his application dated 11.10.2018 as under :
“1. That on facts and in circumstances of the case, the learned Assessing Officer erred in law, in invoking provisions of Section 68 of I.T. Act, and thereby making the additions of Rs 19,58,000/- in the Income of the Assessee/Appellant.
2. That the learned Lower authorities did not appreciate that the provisions of U/s 68 of I.T. Act are not at all applicable in this case, as the Assessee/Appellant, admittedly, is not maintaining any books of account. As such, the provisions of Section 68 are not at all applicable, therefore, the addition made by applying the provisions of Section 68 of I.T. Act is liable to be quashed/deleted.
The Assessee/Appellant refers the following case law in his support, in which it was held that a pure question of law can be raised at any stage of proceedings under Income tax :
(i) NTPC Vs. C.I. T. (1998) 229ITR 383 (S. C.) (ii) CIT Vs. St. Mary’s Malakana Seminar (2012) 348 ITR 69 (KER).
The brief facts of the case are that the assessee filed return of income on 08.09.2009 declaring income at Rs.1,49,840/-. The case was selected for scrutiny through CASS and statutory notices were issued to the assessee for verifying the cash deposits of Rs.19.58 lacs in his saving bank account maintained with ICICI Bank, Meerut. It was noticed by the Assessing Officer that the assessee has deposited cash as under :
Date Amount of Cash deposited during the year 21.04.2008 Rs.1,80,000/- 14.05.2008 Rs.1,10,000/- 14.05.2008 Rs.5,00,000/- 21.04.2008 Rs.1,80,000/- 1.05.2008 Rs.1,10,000/- 03.11.2008 Rs.3,00,000/- 12,07.2008 Rs. 30,000/- 21.08.2008 Rs. 38,500/- 10.01.2009 Rs.6,00,000/- 20.02.2009 Rs.4,00,000/- Total cash deposited 19,58,500/- In this regard the assessee was asked to justify the cash deposit in his bank account. In response, the assessee submitted reply on 09.12.2011 in Hindi which has been incorporated in the assessment order by the Assessing Officer. The Assessing Officer concluded that the assessee could not establish the cash deposit and he was also unable to produce any bills and vouchers in respect of sale/purchase of any item or purchase as claimed by the assessee in his written submissions itself. Therefore, the Assessing Officer after considering the submissions of the assessee, added the entire deposit of Rs.19.58 lacs as unexplained money, credited in his bank account u/s. 68 of the IT Act. Feeling aggrieved from the order of the Assessing Officer, the assessee filed an appeal before the ld. CIT(A) and submitted detailed reply and some additional evidences also under Rule 46A, which were sent to the Assessing Officer for remand report. Remand report was submitted by the Assessing Officer. The ld. CIT(A) after considering the submissions of the assessee and the remand report of Assessing Officer, accepted the additional evidences and accordingly, the ld. CIT(A) deleted the addition on cash deposit ofRs.1,80,000/- on 21.04.2008 and Rs.4,00,000/- on 20.02.2009. Accordingly, the ld. CIT(A) gave relief of Rs.5.80 lacs (Rs.4 lacs + 1.8 Lacs) explained as rotational money withdrawals from the bank and deposited again. The appeal was accordingly partly allowed. Aggrieved, the assessee is in appeal before the ITAT.
The ld. AR submitted that the lower authorities ignored the submissions of the assessee. They have decided the issue in haste manner without considering the documents submitted before them. He also reiterated the submissions made before the authorities below. He also submitted the paper book along with case laws containing 139 pages. He also drew our attention on the confirmation of accounts from the lenders and sale deed of the property. He tried to justify all the cash deposits and relied on some case laws.
On the other hand, the ld. DR relied on the order of the lower authorities and submitted that the assessee was not able to explain the source of cash deposits. He submitted that ld. CIT(A) has rightly partly allowed the appeal after satisfying himself. He also relied on the decision in the case of Sumati Dayal vs. CIT 214 ITR 801 and CIT vs. Durga Prasad More, 82 ITR 540 (SC). Therefore, the order of the ld. CIT(A) should be restored.
After hearing both the sides and perusing the entire materials available on record, we observe that the assessee has tried to explain the cash deposit in his bank account which has been partly accepted by the ld. CIT(A). During the course of hearing, he also drew our attention regarding cash deposit of Rs.6,00,000/- on 10.01.2009. He stated that this amount has been given by MAMA of assessee Mr. Mohd. Shakeel Ahmed on 09.01.2009 for purchase of property which has been returned within three months as the purchase of property could not materialize. The assessee also filed an affidavit to this effect which is not supported by any credible evidence. Therefore, this affidavit cannot be relied upon. We observe that the assessee could not produce any evidence regarding his business activities as stated before the lower authorities and he submitted before the lower authorities that the assessee has to take loan from the bank, therefore, more transactions were necessary to obtain the loan from the bank. From the perusal of the Paper Book, we observe that in paper book page 63, in the cash summary, the assessee has shown opening cash balance of Rs.39,650/-, but he has not filed any financial statements for the previous years so that the opening cash balance can be relied. The assessee has not maintained his books of account as per section 44AA(2) of the Act whereas his returned income is more than Rs.1,20,000/- and also has not produced any credible evidence in support of the deposits in his bank account. Therefore, all the transactions in bank account, which has been sustained by the ld. CIT(A) is correct. In the peculiar facts and circumstances of the case, the case laws relied by the assessee are not applicable in the present case. Further, the assessee has also taken additional ground that the addition cannot be made u/s. 68. This ground is also rejected because mentioning of wrong section in the assessment order does not vitiate the entire assessment proceedings. The Assessing Officer has added it as unexplained money, which is correct because it has been deposited in his bank account which has not been completely explained by the assessee to the satisfaction of the Assessing Officer. We further observe that the assessee has produced cash summary showing opening and closing cash balance, inflow and outflow of cash placed at paper book page 63-70. The cash flow cannot be prepared without maintaining the books of account. Therefore, the contention of the assessee that no books of account have been maintained is completely wrong, as the banking transactions are reflected in the above cash summary. Considering the above facts, we find no infirmity in the impugned order.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 23.01.2019.