THE ITO-1(1), INDORE vs. SHRI MOHAN SINGH SOLANKI, INDORE

आदेश /O R D E R

PER SHRI D.T. GARASIA, JM This appeal has been filed by the revenue against the

order of the learned CIT(A-I, Indore, dated 24.3.2016.

ITA No. 787/Ind/2016 ITO vs. Mohansingh Solanki 2. The brief facts of the case are that the assessee is an

Individual carrying on business of agricultural activities for

the last several years. During the assessment year 2008-09

the assessee has earned only agricultural income,

therefore, he did not file any return of income. The

Assessing Officer made the assessment on the basis of AIR

information of sale of immovable property of Rs.

1,96,62,000/- during the financial year 2007-08. The

matter was carried in appeal to the learned CIT(A) and the

learned CIT(A) deleted the addition by observing as under :-

“6. Ground nos. 2, 3 & 4 : By these grounds the

appellant has challenged the validity of

assessment claiming that no such transaction as

mentioned in the assessment order was carried

out by him. The detailed facts of the case as per

the assessment order are reproduced at Para No.

ITA No. 787/Ind/2016 ITO vs. Mohansingh Solanki 2 above and the detailed submissions of the

appellant are reproduced at Para No. 3 above.

The crux of the appellant’s contention is that he

has not sold any land during the year and that

there was no deposit in his account of the amount

of Rs. 19662000/- either by cheque or by cash.

Perusal of the assessment order confirms the

contention of the appellant as no details of the

property sold or the bank account in which the

cash has been deposited are mentioned in the

assessment order. During the course of appellate

proceedings vide this office letter F. No. CIT(A)-

I/Ind/14-15 the submissions of the appellant

were forwarded to the A.O. for his report however

till date no report has been received from the A.O.

It is also relevant to note that an application for

keeping the demand in abeyance was filed by the

ITA No. 787/Ind/2016 ITO vs. Mohansingh Solanki appellant before the A.O. and the JCIT-Range-I,

Indore wherein also this fact was mentioned that

the transaction as mentioned in the assessment

order was not pertaining to him. Though the A.O.

rejected the application but the application was

accepted by the JCIT. No other details are

available on record to establish that the

transactions as stated in the assessment order

pertain to the appellant. The appellant has filed

copy of his bank account with the State Bank of

India Sanwer branch in support of the claim that

no deposits in cash of Rs.19662000/- are

reflected in his account. He has also filed copy of

revenue record in support of his land holding and

sale of the said land in the financial year 2008-09

for a total consideration of Rs. 1805000/-. Itn is

also to be noted that the A.O. in the assessment

ITA No. 787/Ind/2016 ITO vs. Mohansingh Solanki order has stated that the appellant has sold

immovable property for Rs. 19662000/- and the

sale consideration is considered as unexplained

investment. If the property was sold by the

appellant there was no investment made by the

appellant and if the sale consideration is

deposited in the bank account the source cannot

be held to be unexplained. Keeping in view all the

facts available on record it cannot be said that

there was any material to prove that the appellant

has entered into sale of any property for

Rs.19662000/- or that there were cash deposits

or for that matter deposit by any other mode of

Rs. 19662000/- in the bank account of the

appellant. The addition of Rs. 19662000/- is

therefore directed to be deleted. All the above

grounds of the appellant are therefore allowed.”

ITA No. 787/Ind/2016 ITO vs. Mohansingh Solanki Now the revenue is in appeal before the Tribunal against

the above finding of the learned CIT(A).

assessee but the assessee did not appear before the

Tribunal. Therefore, the matter was heard expenditure-

parte.

course of appellate proceedings, the submissions of the

assessee were forwarded to the Assessing Officer for his

report. However, till date no report was received from the

Assessing Officer. Therefore, without obtaining the remand

report, the learned CIT(A) has decided the issue on the

basis that there is no evidence to suggest that the assessee

has sold any land and the assessee has received any

amount by cheque or cash in which was deposited in the

account of the assessee. He further submitted that the

learned CIT(A) has not called for the remand report and he

ITA No. 787/Ind/2016 ITO vs. Mohansingh Solanki did not make any inquiry from the bank. As such, the

learned CIT(A) was not justified in deleting the addition.

and have gone through the material available on record.

After considering the facts and circumstances of the case,

we are of the view that that the Assessing Officer received

AIR information that the amount of Rs.19662000/- was

deposited in the bank account of the assessee towards sale

of property. Thereafter necessary inquiry was made from

the assessee but the assessee did not cooperate. Therefore,

the assessment was made u/s 144/147 of the Act. We are

of the view that proper opportunity was not afforded to the

Assessing Officer for supply of remand report and as such

the learned CIT(A) was not justified in deciding the appeal

in the absence of any remand report. We are further of the

view that in the absence of giving proper opportunity to the

Assessing Officer, the learned CIT(A) was not justified in

ITA No. 787/Ind/2016 ITO vs. Mohansingh Solanki annulling the assessment made by the Assessing Officer.

Our view is fortified by the judgment of the Hon'ble

Rajasthan High Court in the case of CIT vs. Agro

Engineers; 266 ITR 637 wherein it was clearly held as

under :-

“Section 144 of the Income Tax Act, 1961 – Best judgment assessment – Assessment year 1990-91 – Whether where Assessing Officer makes best judgment assessment under section 144 without affording an opportunity to asessee under proviso thereto, such assessment cannot be annulled but can be set aside with directions to Assessing Officer to make fresh assessment after affording an opportunity to assessee – Held, yes.”

Following the above decision of the Hon'ble Rajasthan High

Court, we hold that where Assessing Officer makes best

judgment assessment under section 144 without affording

an opportunity to asessee under proviso thereto, such

assessment cannot be annulled by the learned CIT(A) but

can be set aside with directions to the Assessing Officer to

make fresh assessment after affording adequate

ITA No. 787/Ind/2016 ITO vs. Mohansingh Solanki opportunity to assessee. We, therefore, set aside the orders

of the authorities below and restore the issue to the file of

the Assessing Officer with the direction to afford

appropriate opportunity to the assessee of being heard to

explain his case and then to make the assessment de novo

in accordance with law. We order accordingly.

purposes.

The order has been pronounced in open Court on 2nd

January, 2017.

Sd/- sd/-

(ओ.पी.मीना) (डी.ट�.गरा�सया) लेखा सद�य �या�यक सद�य (O.P.Meena) (D.T.Garasia) Accountant Member Judicial Member

�दनांक /Dated : 3rd January, 2017.

Dn/

ITA No. 787/Ind/2016 ITO vs. Mohansingh Solanki