SHRI. T SHIVAJI,VELLORE vs. ITO WARD 2, VELLORE

आदेश / O R D E R

PER INTURI RAMA RAO, ACCOUNTANT MEMBER

ITA No.415 /2018 :- 2 -:

The brief facts of the case are as under: 2.

The appellant is an individual and engaged in the business of running cable TV and real estate. The return of income for the AY 2009-10 was not filed voluntarily u/s.139 of the Income Tax Act, 1961 (for short ‘the Act’). Consequently based upon the information received from CIB that assessee made cash deposits of Rs.36,35,500/- in saving bank account, survey u/s.133A of the Act was conducted in the business premises of the assessee, notice u/s.148 of the Act was issued to the assessee on 11.10.2011. In response to which, assessee had filed return of income for the assessment year 2009-10 disclosing total income of �2,45,000/-. Against the said return of income, the assessment was completed by the Income Tax officer, Ward I(6), Vellore vide order dated 24.03.2016 passed u/s.144 of the Income Tax Act, 1961 (in short ‘’the Act’’) as the assessee had not complied with several notices calling for certain information at total income of �33,03,410/-. While doing so, the Assessing Officer made following additions.

(i) Cash found at the time of survey 2,50,000/- Construction of 1st floor & second floor (ii) 10,00,000/- (iii) Under Sl.No.5(c) of the sworn statement profit from finance business ₹35,000/- per 4,20,000/- month. (iv) Net income from cable TV business 1,20,000/- (v) Total cash credit in SB A/c. 36,35,000/-

ITA No.415 /2018 :- 3 -:

Being aggrieved, an appeal was preferred before the ld. 3.

CIT(A) challenging the very validity of the reassessment proceedings as well as the merits of the addition. The ld. CIT(A) had confirmed the validity of the re-assessment, however observed that assessee has not challenged the matter on merits.

Being aggrieved by the order of the ld. CIT(A), the appellant 4. is in appeal before us in the present appeal. It is stated that the ld. CIT(A) ought not have upheld the validity of re-assessment proceedings as there is no fresh tangible material. It is promoted only by mere change of opinion, placing reliance on the judgment of Hon’ble Supreme Court in the case Kelvinator of India Ltd (2010) 320 ITR 561. On merits, he submitted that no addition is warranted having regard to the facts of the case.

On the other hand, the ld. Sr. Departmental Representative 5. placed reliance on the orders of lower authorities.

We heard the rival submissions and perused the material on 6. record. Submission of the assessee is that the reopening is promoted by mere change of opinion cannot be accepted, in as much as, some incriminating materials were found as result of survey operations.

Fresh materials were in the form of cash and source for construction of house and source for cash deposits in SBI Bank remained

ITA No.415 /2018 :- 4 -: unexplained. These materials undoubtedly constitute fresh materials enabling the Assessing Officer to form an opinion that income escaped assessment. The ratio decision of Hon'ble Supreme Court in the case of Kelvinator of India Ltd (supra) cannot be applied to the facts of the case, therefore we confirm the order of the ld. CIT(A). However, we find that the ld. CIT(A) had not adjudicated on the merits of the addition despite raising grounds of appeal. Therefore, we remit the matter back to the file of ld. CIT(A) for fresh adjudication on the merits of the appeal after affording due opportunity of hearing to the appellant in accordance with law. Hence, appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced on 18th day of February, 2020, at Chennai.