Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, JABALPUR BENCH “SMC”, JABALPUR
Before: SHRI KUL BHARAT
PER KUL BHARAT, VICE PRESIDENT.:
This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC) dated 18.07.2023 pertaining to the assessment year 2009-10. The assessee has raised the following grounds of appeal: -
1. The order passed by the Ld. CIT(A) is bad in law and facts, void ab initio and without jurisdiction.
2. The Ld. CIT(A) erred in law and facts of the case in sustaining the addition of Rs.5,44,900/- as unexplained money deposited in the saving bank a/c.
3. The Ld. CIT(A) erred in law and facts of the case in sustaining the addition of Rs.6,50,999/- as unexplained money remitted to the broker a/c.”
The facts giving rise to the present appeal are that the case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (hereinafter referred as to “the Act”) and notice u/s 148 of the Act was issued on 29.03.2016 and served upon the assessee. It is observed by AO that the said notice was returned un-served Page 2 of 5 by Postal Department with remarks “Insufficient address”. It is further noted by the Assessing Officer that the notice dated 29.03.2016 was duly served upon the assessee on 02.04.2016. The Assessing Officer noted that the assessee filed his return of income in response to the notice u/s 148 of the Act, declaring total income of Rs.31,630/-. The Assessing Officer, thereafter, proceeded to make assessment and in the absence of the explanation of the assessee regarding source of transaction in the bank. The Assessing Officer treated the cash transaction in the bank as unexplained income of the assessee and assessed at Rs.12,31,940/-. Aggrieved by this, the assessee preferred appeal before the Ld. CIT(A) who also sustained the additions. Now the assessee is in appeal before this Tribunal.
Ld. Counsel for the assessee, apropos to the grounds of appeal reiterated the submissions and made in the written submissions. For the sake of clarity, the submissions are reproduced as under: -
“Ground No. 1 The notice u/s 148 is issued after recording of reason by non-jurisdictional AO (ITO-ward-1, Katni) whereas the territorial jurisdiction lies with ITO Ward -3, Katni. Kindly refer page No. 14 of paper book and 3 (first line) of the assessment order. “Thereafter the case has been transferred to this office by ITO ward1, Kati vide his letter F.No.ITO/W-1/Katni/Transfer of records /2015-16 dated 17.06.2016.” Assesses relies upon: Ashok Devichand Jain Vs UOI & Others (High Court of Mumbai) 452 ITR 43. Chowaram Dhiwar Vs ITO ITAT Raipur 37 NYPTTJ 5 (Raupur) ITA No. 31/Rpr/2022. Mukesh Kumar Agrawal Ve ITO 321 /JP/3021 -196 ITD 32(JP). ITO Vs Naseman Farm Pvt Ltd ITAT Delhi 134 TTJ 472. Charu K bagadia Ve ACIT High Court of Madra 327 CTR (Mad) 419. Vedanta Resource Ltd Vs ACIT (International Tax) & Anr 333 CTR 432 Ground No.2 Page 3 of 5 The assessee has submitted affidavit stating that the transaction for deposit of cash of Rs 5,44,900/- does not belong to him. It was deposited by Shri Prabhakar Tiwari who was employer of assessee. The Ld AO during the course of assessment also recorded the statement of assessee on oath. [Refer page No. 29 to 35 of the paper book}. Attention is also invited to the page No. 39 for grant of approval u/s 151 for re-opening of the case. The name of assessee as well Shri Prabhakar Tiwari M/s Dhanshri Securities, Katni is mentioned. Therefore, the department has simultaneously assessed income for AY 2009-10 also. Ground No.3 The assessee has submitted affidavit stating that the transaction for remittance of Rs 6,50,999/- was done by the Shri Prabhakar Tiwari. The Ld AO also recorded statement during the assessment. The assessee is a salaried employee getting only Rs 3,000 per month. He does not have capacity to invest Rs 5,44,900/- and Rs 6,50,999/-. The assessment of Shri Prabhakar Tiwari M/s Dhanshri Securities was also done u/s 147 and therefore the department could have verified the source of money in the hands of actual person. No action was taken by the Ld AO inspite of affidavit and statement recorded. [Refer page No. 3 to 9 of the paper book]. Assessee filed RTI application before Ld AO to get the copy of the assessment order of Prabhakar Tiwari. The LD AO rejected the RTI application. Kindly refer submission letter dated 18.01.2024. Additional Ground That the Ld CIT (A) erred in upholding the order of the Ld AO without allowing the setoff of loss of Rs 9,31,839/as Future and Option contract against the income added for Rs 5,44,900 and Rs 6,50,999/- Without prejudice to the submissions made for Ground No.1, 2 and 3, it is submitted that the F&O loss of Rs 9,31,839/- is non-speculative by virtue of section 43(5)(d) of the Income tax Act. During the assessment, the assessee submitted all proof in form of contract notes and transaction details for loss claimed for Rs 12,04,904/-. Out of the Rs 9,31,839/- is related to F&O category and is mentioned in page No.4 of the assessment order. The assessee filed the computation of income vid Page No.21 of paper book. The loss has been declared under the head business income and hence must be set-off against income computed for Rs 5,44,900/- and Rs 6,50,999/-.”
On the other hand, the Ld. Departmental Representative (DR) opposed the submission and supported the orders of the lower authorities.
I have heard the Ld. Representatives of the parties and perused the material available on record. It is the grievance of the assessee that the material placed before the lower authorities Page 4 of 5 was not considered and without considering the same, the impugned additions have been made by the lower authorities. Therefore, considering the totality of the facts and the material placed before me. I am of the considered view that the authorities below ought to have considered the evidences. The assessee has also taken the objection regarding notice issued by non- jurisdictional Assessing Officer, this fact also requires verification. Therefore, considering the totality of the facts, I set aside the impugned order and restore the assessment to the file of the Assessing Officer. The Assessing Officer would also consider the objection regarding the jurisdiction of the assessing authority who had issued notice u/s 148 of the Act. If, the notice has been issued by the authority having jurisdiction to Assessing Officer would also decide the matter on merits afresh. Grounds raised in this appeal are allowed for statistical purpose.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 08/01/2025.