SHRI PADMAKAR SOPAN KANDARFALE,LATUR vs. INCOME-TAX OFFICER, WARD - 1, LATUR

आदेश / ORDER PER ANIL CHATURVEDI, AM :

This appeal filed by the assessee is emanating out of the order of 1. Commissioner of Income Tax (A) – 2, Aurangabad dt.28.08.2017 for the assessment year 2012-13.

Assessee is an individual stated to be having income from other sources. As per the AIR information available to the AO, it was noticed that assessee had deposited cash of Rs.14,55,500/- in his savings bank account during the financial year relevant to A.Y. 2012-13. It was also

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observed that assessee has not filed return of income for the said

assessment year. Therefore, notice u/s 148 of the Act dt.15.12.2015 was

issued and served on assessee on 04.01.2016. Thereafter, the case was

taken-up for scrutiny and subsequently, assessment was framed u/s 144

r.w.s. 147 of the Act vide order dt.19.12.2016 and the total income was

determined at Rs.12,05,840/-. Aggrieved by the order of AO, assessee

carried the matter before Ld.CIT(A), who vide order dt.28.08.2017 (in

appeal No.ABD/CIT(A)-2/EF/397/2016-17) dismissed the appeal of

assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in appeal

and has raised the following grounds :

“1. On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in dismissing the appeal of the assessee/appellant thereby confirming the addition made by the A.O. of Rs. 10,42,500/- under S. 69A of the Act being deposits into Bank accounts. As per law the action of the Ld. CIT(A) is not sustainable. It be quashed.

as under :

“1. On the facts and circumstances of the case and in law the AO in an exparte assessment u/s 144 r.w.s. 147 of the Act was not justified in making addition of Rs.10,42,500/- u/s 69A of the Act though in the order itself the AO has observed that out of Rs.10,42,500/- subjected to addition the deposit of Rs.7,72,500/- the balance was explained either treated as ‘contra’ or ‘agricultural income’.

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submission that the grounds raised are pure question of law and as per

the judgment of Hon’ble Supreme Court the same can be raised any time

and at any stage of appeal proceedings.

Ld.A.R. and after hearing the Ld.D.R. the same were admitted for

consideration.

assessee had deposited Rs.14,55,500/- in his savings bank account with

Latur Urban Co-operative Bank Ltd., Latur. It was also noticed that

assessee had not filed the return of income. The assessee was asked to

explain the source of deposits, to which the assessee inter-alia submitted

that the source of deposits were out of agricultural income and sale of

agricultural land and in support of which, he submitted the copies of

7/12 extract. The submission of the assessee was not found acceptable

to the AO. AO noted that apart from deposits in Latur Urban Co-

operative Bank Ltd., Latur, assessee had also deposited cash of

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Rs.6,73,000/- in the savings bank account maintained with Bank of

Maharashtra. In the absence of proper explanation about the source of

cash deposits, AO considered the cash deposits of Rs.14,55,500/- in

Latur Urban Co-operative Bank Ltd., Latur and Rs.6,73,000/- in Bank

of Maharashtra as “unexplained money” u/s 69A of the Act and made its

addition. Aggrieved by the order of AO, assessee carried the matter

before Ld.CIT(A), who upheld the addition made by the AO by observing

as under :

“7. I have considered the submissions made by the assessee and I find that they pertain to the provisions of Section 68 and Section 69 of the Act. The assessee has not challenged the finding of the assessing officer that the sum of Rs.10,42,500/-, deposited in the bank accounts by the assessee was unexplained. He has merely relied upon a technical ground that the said addition could not be made u/s. 69A because no books of accounts were maintained by the assessee. The plea taken by the assessee is misconceived and mistaken. Section 69A of the Act states that 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 accounts, 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 satisfactory then the money or the value of the bullion, jewellery or other article will be deemed to be the income of the assessee for such financial year. A plain reading of this Section shows that it is not imperative on the part of the assessee to maintain the books of accounts. The words used in the section is 'not recorded in the books of accounts, if any which implies that there may or may not be a book of account in existence for the purpose of this Section. Hence, the contention raised by the assessee that maintenance of books of accounts is a prerequisite for invoking the section does not have any reasonable basis. Maintenance of books of accounts is a prerequisite only for the purpose of Section 68 and not for the purposes of Section 69, Section 69A and Section 69B. This is for the reason that in all these three Sections, the words "if any" follows the phrase "books of account". Read together, the sentence implies that the ownership of money, bullion, jewellery or other valuable article or thing may not be recorded in such books of accounts if they exist. Existence of books of accounts is not a prerequisite for the purpose of invoking the provisions of Section 69A. In the instant case, there cannot be any doubt on the fact that the assessee was the owner of the money deposited in his bank account and indeed the assessee has also not contended the ownership of the money deposited in the bank accounts. In fact, in assessment proceedings, the assessee had tried to explain the sources of the money deposited in his bank account. The section is very clear and it states that where the explanation offered by the assessee is not satisfactory in the opinion of the assessing officer then the money shall be deemed to be the income of the assessee for the

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respective financial year. Hence, there cannot be any doubt on the fact that once the assessee is established to be the owner of certain amount of money, then it's sources have to be explained by the assessee to the satisfaction of the assessing officer and if the explanation is not found to be satisfactory, then the same can be treated as the income of the assessee. Therefore, I hold that the provisions of Section 69A have been rightly invoked in this case and the addition made by the assessing officer is confirmed. Ground No.1 is dismissed.”

Aggrieved by the order of Ld.CIT(A), assessee is now in appeal.

Ld.CIT(A) and further submitted that assessee is an agriculturist and in

addition, he is working as Peon in local school. He submitted that

assessee’s family is having agricultural land of about 5 acres and on it

assessee’s family grows soyabean, gramdal and moong and in support of

which he placed on record the copy of 7/12 extracts. Ld.A.R. further

submitted that assessee to prove the source of deposits had submitted

7/12 extracts but the same were not considered by the AO while framing

the assessment. He submitted that though assessee had made

submissions before Ld.CIT(A) that the source of deposits of cash to be out

of agricultural income but Ld.CIT(A) has not given any finding on the

same. On the issue of addition made u/s 69A of the Act, Ld.A.R.

submitted that since assessee was not maintaining any books of

accounts, the deeming provisions of Sec.69A are not applicable and

therefore no addition could have been made u/s 69A of the Act and for

this proposition, he relied on the decision in the case of Kewal G. Bajaj

Vs. ACIT in ITA No.2182/Bom/1993 reported in (1999) 71 ITD 375. He

further relying on the decision of Hon’ble Bombay High Court in the case

of CIT Vs. Bhaichand H. Gandhi reported in (1982) 11 Taxman. 59

submitted that even addition u/s 69 of the Act was not possible because

assessee was not maintaining cash book. He further pointing to the

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order of AO, submitted that though AO has admitted that assessee had

made cash deposits of Rs.2,70,000/- on 23.12.2012 and which does not

fall in the relevant assessment year but still the amount has been

considered as unexplained money. He therefore submitted that assessee

be given one more opportunity to present his case before Ld.CIT(A) and

explain his stand and therefore the matter be remanded back to

Ld.CIT(A). He further submitted that assessee would co-operate by filing

all the required details before the lower authorities. Ld.D.R. on the other

hand, supported the order of AO and Ld.CIT(A) and objected to the prayer

of the assessee to remand back the matter to Ld.CIT(A). She therefore

submitted that the order of Ld.CIT(A) be confirmed.

record. The issue in the present case is with respect to addition made

u/s 69A of the Act. Before me, it is assessee’s submission that before AO

and Ld.CIT(A), assessee submitted the source of deposits to be out of

agricultural income and for which the necessary evidence was placed

before them but the same has not been considered by Ld.CIT(A). I find

force in the aforesaid contention of Ld.A.R. in view of the fact that there

is no finding on the same. I further find that AO though in the

assessment order with respect to cash deposits of Rs.2,70,000/- made in

Latur Urban Co-operative Bank, Latur has stated that the deposits were

made on 23.12.2012 (which is the period not falling under relevant

assessment year) but the same has still been added as unexplained

money. Considering the totality of the aforesaid facts, I am of the view

that the issue needs to be re-examined at the end of Ld.CIT(A). I

therefore, without deciding the issue on merits, restore the issue back to

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the file of Ld.CIT(A) for him to decide the issue on merits after

considering the submissions of the assessee and in accordance with law. Needless to state that Ld.CIT(A) shall grant adequate opportunity of

hearing to both the parties. Assessee is also directed to co-operate with

Ld.CIT(A) by promptly furnishing all the required documents as called

for. Thus, the ground of the assessee is allowed for statistical purposes.

statistical purposes.

Order pronounced on 26th day of October, 2018.

Sd/- (ANIL CHATURVEDI) लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 26th October, 2018. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :

आदेशानुसार/ BY ORDER

// True Copy //

व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.