MR. ASHISH RAMESH AJMERA,DHULE vs. ITO, WARD 1, DHULE, DHULE

2. Ld.Authorised Representative(ld.AR) for the Assessee filed a paper book.

2.1 Written submission of ld.AR is reproduced as under: “2. Facts of the case and submissions 2.1. Cash deposited in Dhule Vikas Sahakari Bank - Rs.10,00,000 (Ground 1)

2.1.1.1 had deposited cash amounting to Rs.10,00,000 on 24/07/2012 in the Dhule Vikas Sahakari Bank. A copy of the bank account is attached as Annexure 1.

2.1.2. The AO added the above cash deposited in the bank account to the returned income for the year by treating the same as unexplained money under section 69A of the Act. The provisions of section 69A of the Act is reproduced as under:

Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.

On perusal of the above section, your Honour may note that the provisions of section 69A of the Act may be invoked when an assessee has found to be the owner of any money which is not recorded in the books of account and he offers no explanation about the nature and 3 source of acquisition of money.

2.1.3.1 vehemently submit before your Honour that the above section 69A of the Act is not applicable in my instance case. The cash deposit of Rs. 10,00,000/- on 24/07/2012, was out of following sources.

Date Particulars Amount 10/7/2012 Withdrawal From Shirpur Peoples 3,00,000 Bank 6971 10/7/2012 Withdrawal from Shirpur Peoples 3,00,000 Bank 6971 18/7/2012 Withdrawal from Axis Bank 50,000 Cash balance out of sale of milt etc. 2,50,000 Total 10,00,000 The relevant extract of Shirpur Peoples Bank 6971 account and Axis Bank account are enclosed as Annexure 2 and Annexure 3 respectively.

On perusal of the above table, your Honour may note that out of cash deposit of Rs. 10,00,000 made on the 27/07/2012, Rs. 7,50,000 was withdrawn from two bank accounts on total of three occasions only 9- 17 days before the cash deposited. The balance cash deposit of Rs. 2,50,000 was out of the business of sale of milk.

Thus, the source of cash deposited is known, and the same was also furnished before the AO during the course of the assessment proceedings.

2.1.4. Further, I wish to submit before your Honour that the bank account in the Dhule Vikas Sahakari Bank was inoperative since 10/04/2007, and there is only one transaction in the said account in F.Y. 2012-13. As the account was inoperative since 4-5 years, this bank account was not included in my books of accounts.

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On verification of ITS data, it is noticed that during year under the assessee has deposited cash of Rs.4152324/- in the saving bank 4 account. In absence of any return of income for the year under consideration an amount of Rs.4152324/- is considered as income of the [A] assessee. This total income of the assessee has exceeded the maximum amount which is not chargeable to Income tax. The assessee had failed to file his return of income for the said Assessment Year i.e. A.Y. 2013- 14 within the time allowed U/s. 139 of I.T. Act 1961. Therefore the income chargeable to tax for A.Y. 2013-14 has escaped assessment. ii. I have reason to believe that the Income of the assessee amounting to Rs.4152324/- has escaped assessment for the AY 2013-14 within in the meaning of clause (a) of Explanation 2 to Section.147 of the Income-tax Act, 1961.

Submission of ld.DR : 3. Ld.Departmental Representative(ld.DR) for the Revenue relied on the order of Assessing Officer and ld.CIT(A). Ld.DR submitted regarding Ground No.1 that Assessment was reopened as Assessee has not filed return of income and made cash deposits in bank account. Ld.DR read out the reasons recorded for reopening which are at page no.2 of the paper book. Ld.DR further submitted that in the assessment order, Assessing Officer has made addition of Rs.10 lakhs which was deposited in cash in the bank account. Therefore, there is no merit in Ground No.1. Ld.DR submitted that regarding agricultural income, ld.AR has pleaded that there was agreement entered by Assessee with his Brother and Sisters to cultivate the land was not brought to the notice of Assessing Officer.

Findings & Analysis : 4. We have heard both the parties and perused the records. 5 Ground No.1 : 5. Admittedly, no Return of Income was filed under section 139(1) of the Act. ITO issued notice u/s.148 dated 21.03.2018 for A.Y.2013-14. In response to the notice u/s.148, Assessee filed Return of Income. Assessee has filed copy of reasons for reopening at page no.2 of the paper book. The reasons recorded are as under: “2. The reason(s) for reopening in your case as requested by you for the AY 2013-14 is as under:-

On verification of ITS data, it is noticed that during year under the assessee has deposited cash of Rs. 4152324/- in the saving bank account. In absence of any return of income for the year under consideration an amount of Rs. 4152324/- is considered as income of the assessee. This total income of the assessee has exceeded the maximum amount which is not chargeable to Income tax. The assessee had failed to file his return of income for the said Assessment Year i.e. A.Y. 2013-14 within the time allowed U/s. 139 of I.T. Act 1961. Therefore the income chargeable to tax for A.Y. 2013-14 has escaped assessment. ii. I have reason to believe that the Income of the assessee amounting to Rs.4152324/- has escaped assessment for the AY 2013-14 within in the meaning of clause (a) of Explanation 2 to Section.147 of the Income-tax Act, 1961.

5.1 Thus, it can be observed that ITO reopened the case because there were cash deposits in the Saving Bank Account of the 6 Assessee and assessee had not filed Return of Income u/s.139(1) of Act. Therefore, ITO had reason to believe that there was escapement of income from assessment. We have perused the assessment order and it is noted that Assessing Officer has made addition of Rs.10 lakhs as according to the Assessing Officer, Assessee could not explain the source of cash deposits. In addition to this, Assessing Officer has also made addition of Rs.5,45,377/- as unexplained money. Thus, it can be observed that the additions made in the assessment order of Rs.10 lakhs which was cash deposit is as per the reasons recorded. Therefore, there is no merit in the Ground No.1, accordingly, Ground No.1 of the Assessee is dismissed.

Ground No.2 – Cash Deposit of Rs.10 lakhs : 6. Assessing Officer had observed that Assessee had deposited cash of Rs.10 lakhs on 24.07.2012 in Dhule Vikas Sahakari Bank. Assessing Officer made addition of Rs.10 lakhs. During the proceedings before this Tribunal, ld.AR for the Assessee submitted as under : “2. Facts of the case and submissions 2.1. Cash deposited in Dhule Vikas Sahakari Bank - Rs.10,00,000 (Ground 1)

2.1.2. The AO added the above cash deposited in the bank account to the returned income for the year by treating the same as unexplained money under section 69A of the Act. The provisions of section 69A of the Act is reproduced as under:

Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.

On perusal of the above section, your Honour may note that the provisions of section 69A of the Act may be invoked when an assessee has found to be the owner of any money which is not recorded in the books of account and he offers no explanation about the nature and source of acquisition of money.

2.1.3.1 vehemently submit before your Honour that the above section 69A of the Act is not applicable in my instance case. The cash deposit of Rs. 10,00,000/- on 24/07/2012, was out of following sources.

Date Particulars Amount 10/7/2012 Withdrawal From Shirpur Peoples 3,00,000 Bank 6971 10/7/2012 Withdrawal from Shirpur Peoples 3,00,000 Bank 6971 18/7/2012 Withdrawal from Axis Bank 50,000 Cash balance out of sale of milt etc. 2,50,000 Total 10,00,000 The relevant extract of Shirpur Peoples Bank 6971 account and Axis 8 Bank account are enclosed as Annexure 2 and Annexure 3 respectively.

On perusal of the above table, your Honour may note that out of cash deposit of Rs.10,00,000 made on the 27/07/2012, Rs. 7,50,000 was withdrawn from two bank accounts on total of three occasions only 9- 17 days before the cash deposited. The balance cash deposit of Rs.2,50,000 was out of the business of sale of milk. Thus, the source of cash deposited is known, and the same was also furnished before the AO during the course of the assessment proceedings. 2.1.4. Further, I wish to submit before your Honour that the bank account in the Dhule Vikas Sahakari Bank was inoperative since 10/04/2007, and there is only one transaction in the said account in F.Y. 2012-13. As the account was inoperative since 4-5 years, this bank account was not included in my books of accounts.”

6.1 Thus, it is an admitted fact that Assessee had deposited Rs.10 lakhs cash in his bank account on 24.07.2012. Assessee tried to explain that impugned cash deposits were out of withdrawals made by Assessee from Shirpur People’s Bank. We have already reproduced that Assessee claimed there were withdrawal of Rs.3 lakhs each on 10.07.2012 from Shirpur People’s Bank and Rs.50,000/- from Axis Bank on 18.07.2012.

However, we do not accept that Cheque given to Mr.Rajesh was cash withdrawn by Assessee. Ld.AR has not filed any document to prove that Cheque given by Assessee to Mr.Rajesh was for cash withdrawal for assessee’s purpose.

Ground No.3 : 12. In the Return of Income, Assessee has shown Gross Agricultural Income at Rs.19,92,671/- and Net Agricultural Income 11 Rs.15,61,026/-. During the assessment proceedings, Assessing Officer asked Assessee to prove the said income. The Assessing Officer also called yield statistics from Department of Agriculture. During the Assessment Proceedings, Assessee filed details of Agricultural Land cultivated. The Assessing Officer noted that part of the agricultural land was owned by Nikitha and Atul. Accordingly, Assessing Officer(AO) recalculated the agricultural income and held that net agricultural income could have been Rs.10,15,649/-. Hence, the AO added difference of Rs.5,45,377/- to the Total Income. Before us, ld.AR for the Assessee pleaded that Nikhita and Atul are Assessee’s siblings and there is an agreement between Assessee and his siblings for cultivation of land. Assessee enclosed copy of the agreement at page no.17 to 19 of the paper book. However, on perusal of the assessment order, it is observed that there is no discussion regarding the agreement in the assessment order, therefore, it seems that the agreement was not filed before Assessing Officer. In these facts and circumstances of the case, we set-aside the issue of Agricultural Income to the Assessing Officer for denovo adjudication. Assessing Officer shall provide opportunity of hearing to the assessee. Assessee shall file necessary documents before the Assessing Officer. 12 Ground No.5 : 13. We have already discussed that Assessing Officer had issued notice u/s.148 dated 21.03.2018 after recording reasons for reopening. Assessing Officer provided opportunity to the assessee. Therefore, the Assessment Order is as per law. Hence, there is no merit in the Ground No.5 raised by Assessee. Accordingly, Ground No.5 is dismissed.