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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: Shri Shamim Yahya & Shri Pawan SinghShri Arun Nathalal Zaveri vs
O R D E R Per Pawan Singh, JM : This appeal by assessee is directed against the order passed by CIT(A)-21, MumbaI dated 21-01-2017. The assessee has raised the following grounds of appeal:-
“Legal Grounds:
1.
On the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) (hereinafter referred to as "CIT-A") erred in not appreciating a fact that in the reasons recorded in writing, the assessing officer did not had a belief that income chargeable to tax had escaped assessment. The assessment is reopened without application of mind and without fulfilling the requirements of provisions of Sec.
The appellant prays that the action of leaned CIT-A in accepting the reopening u/s 147 is bad in law and the assessment be set aside.
2. WITHOUT PREJUDICE TO ABOVE on the facts and circumstances of the case and in law the CIT-A erred in not appreciating a fact that while finalizing assessment the Assessing Officer has not found that any income had escaped assessment out of Rs.30,00,000/-, for which the assessment was reopened.
2 ITA 4800/Mum/2018
The action of Assessing Officer is in violation of provisions of Sec. 147 and the assessment should be set aside. Other Ground: 3. On the facts and circumstances of the case and in law the learned "CIT-A" erred in confirming addition of Rs. 13,57,0007- as unexplained cash credit u/s 68 even after accepting the fact that the appellant has proved the nexus between withdrawals of cash from bank and re-depositing in the bank.”
The brief facts of the case are that assessment for AY 2012-13 was reopened by assessing officer (AO) under section 147 on 11.03.2016. The AO received information that during the course of assessment proceedings in case of Reliable Developer, it was found that the said company had given cash loan and advances to assessee of Rs.30 lakhs. The said transaction was considered suspicious and for verification and investigation for violation of section 269SS, the assessment of assessee was reopened u/s 147. Notice u/s 148 was issued to the assessee on 11-03-2016. In response to the notice u/s 148, the assessee vide his reply dated 28-03-2016 stated that return filed originally on 06-02-2013 may be treated as return filed in response to notice u/s 148. The assessee also sought reasons for reopening. After serving reasons for reopening, the AO proceeded to re-assess the income of the assessee and required various details of cash deposits in different bank
3 ITA 4800/Mum/2018 accounts. On perusal of details furnished by assessee in respect of deposits in Shamrao Vithal Co-operative Bank, the AO noted that assessee has deposited Rs.13,57,000 in his account. The assessee was asked to justify the cash deposits.
The assessee, in reply dated 10-08-2016 submitted that there is no cash deposit in the bank, so there is no question of unexplained cash credit u/s 68. The contention of assessee was not accepted by AO. The AO concluded that in the bank account with Shamrao Vithal Co-operative Bank, the deposit clearly shows that assessee has made cash deposit on various dates, summary of which was prepared by AO as recorded at para 7 of the assessment order. The AO treated the said cash deposit as unexplained cash credit u/s 68. On appeal before CIT(A), the action of AO was confirmed. Further aggrieved by the action of CIT(A), the assessee has filed the present appeal before us.
None appeared on behalf of the assessee when the case was taken up for hearing. Perusal of record reveals that assessee was duly served by the notice of hearing. Despite service of notice, the assessee neither appeared nor filed any 4 ITA 4800/Mum/2018 documentary evidence or written explanation to substantiate the grounds of appeal. Therefore, we are left with no option but to proceed the appeal on the basis of material available on record.
4. Grounds 1 & 2 relate to reopening u/s 147. The Ld. DR for the revenue submits that assessment was reopened on the basis of credible information received by AO during assessment in case of Reliable Developers. The assessment was reopened by complying the statutory formalities. The assessee contested the re-assessment proceedings. There was sufficient material with the AO for making opinion for reopening of the assessment that the income of the assessee escaped assessment.
We have considered the submission of the Ld. DR and perused the material available on record. We have noted that the assessment was reopened on the credible information for making belief that the income of assessee has escaped assessment. The AO reopened the assessment after seeking prior approval of Joint Commissioner of Income-tax.
5 ITA 4800/Mum/2018 Therefore, we do not find any merit in grounds 1 & 2 of the appeal. These grounds are dismissed accordingly.
Ground 3 relates to addition of Rs.13,50,000 as unexplained cash credit. The Ld. DR for the revenue submits that during the assessment, the assessee failed to furnish explanation about the cash deposit. In absence of explanation about the nature and source of the credit, the assessing officer had no option but to treat the cash credit as unexplained cash credit u/s 68.
We have considered the submission of ld DR for the revenue and perused the material on record. We have noted that during the assessment, the AO confronted the assessee with the cash deposits on various dates in bank account with Shamrao Vithal Co-operative Bank. We have further noted that the AO recorded that the assessee has not furnished any explanation. Before the Ld.CIT(A), the assessee contended that the cash deposit out of cash in hand and cash withdrawal from Shamrao Vithal Co-operative Bank. The details of extract of cash book with bank statement were furnished. It was further stated that there is no case of unexplained cash credit
6 ITA 4800/Mum/2018 and that of cash deposits were out of opening cash on hand and cash withdrawal during the year. The contention of the assessee was not accepted holding that the existence of transaction in the books of assessee is a condition precedent before any addition u/s 68. The initial onus to prove the genuineness lies on the assessee. On perusal of various details of bank account reflecting the transaction on various dates, there has to be live link of the quantum and dates relating to the deposits and withdrawals. The assessee is not a retailer to prove the contention that cash was frequently deposited as a general business requirement. The assessee is a director in a company and that deposits were followed by immediate transfer to various parties through cheques or RTGS. The Ld.CIT(A) confirmed the action holding that cash deposit has been transferred on subsequent dates by cheque to Chitan Zaveri or Aashna Construction and confirmed the action of AO.
Before us, the assessee neither appeared nor furnished any statement of account or cash flow statement about cash in hand nor any written explanation filed on record. Therefore, in absence of any explanation, we do not find any reason to 7 ITA 4800/Mum/2018 interfere with the finding of Ld. CIT(A). Hence, ground is rejected.
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on 30.07.2019.