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Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER 1. This appeal by assessee under section 253 of the Income-tax Act (the Act) is directed against the order of ld. Commissioner of Income-tax (Appeals)-21, Mumbai [ld. CIT(A)], Mumbai dated 17.02.2016 for Assessment Year (AY)
2007-08. 2. The brief facts of the case are that the assessee filed his return of income for relevant AY on 08.01.2008 declaring total income of Rs. 3,33,008/-. The assessment was completed on 21.12.2009 u/s 143(3) of the Act accepting the return income of assessee. Subsequently, the return of income was re- Shri Shivkumar C. Acharya opened. The notice u/s 148 dated 25.02.2013 was served upon the assessee.
In response to the notice, the assessee vide his reply dated 02.08.2013 contended that the return of income already filed may be treated as income in response to the notice. The assessment was re-opened on recording the following reasons; “ As the FDR’s amounting to Rs.16,00,000/- plus cash deposit of Rs.5000/- plus interest of Rs.1,993/- were made, during the period relevant to AY 2007-08 and the account of Corporation Bank has not been disclosed in the balance sheet as on 31.03.2007, I have reason to believe that the assessee has filed incorrect information and the income has escape assessment to the extent as the source of investment in FDR’s and cash deposit made into the bank is undisclosed.” The assessee objected to the reopening and contended that the income has already offered, accepted and taxed in AY 2008-09. The contention of the assessee was not accepted by AO, holding that the assessee was in settlement for AY 2008-09 and 2009-10. The assessment for AY 2007-08 was never referred before Settlement Commission. After rejecting the submission of the assessee, the Assessing Officer (AO) completed the assessment u/s 143 r.w.s. 147 on 21.03.2014. The AO while passing the assessment order made the addition of Rs. 16,06,993/- in the total income of assessee. On appeal before the ld. CIT(A), the action of AO was confirmed.
Thus, further aggrieved by the order of ld. CIT(A), the assessee filed the present appeal before us raising the following grounds of appeal: Shri Shivkumar C. Acharya “1. The learned CIT (Appeals) erred in not deleting the addition of Rs.16,06,993/-made by the Assessing Officer allegedly being bank deposits made in the year and not disclosed to the Department.
The learned CIT (Appeals) failed to appreciate that out of the said amount, an amount of Rs.13,30,682/- had been duly explained before Settlement Commission and noted by the Commission in Para 3 of its order for A.Y.2008-09 and 2009-10.
3. The learned CIT (Appeals) failed to appreciate that with regard to the balance amount of Rs.3,01,993/-, it represents deposit of Rs.3,00,000/- made on 18-01-2007 and already taxed in A.Y.2008-09 together with interest on maturity and if again taxed in A.Y.2007 -08 would suffer double taxation.
4. It is prayed that the addition of Rs.16,06,993/- may please be deleted.”
None appeared on behalf of assessee when the appeal came up hearing
despite repeated calls. We left no option except to hear the ld DR for the revenue and to proceed on the basis of the material available on record. The ld. DR for the revenue supported the order of authority below. The ld DR for the revenue argued that the assessee not disclosed the details of the FD’s in the balance sheet for AY 2007-08, thus the assessment for the year under consideration was reopened and was brought to tax.
We have considered the submissions of the ld DR for the revenue and perused the material on record. The contention of the assessee throughout
the re-assessment as well as before the First Appellate authority is that the income of bank deposited has already been offered and have been taxed in AY 2008-08 and 2009-10. We have noted that the AO in para 3 of his order has referred para 9 of the order of Settlement Commission, wherein it is specifically mentioned, “Thus, the entire position in respect of additional income offered by the applicant, arising out of the undisclosed saving 3 Shri Shivkumar C. Acharya bank account and FD’s and the interest thereon with the Corporation
Bank, Mumbai, stands fully explained. Thus above issue gets settled.”
The AO as well as the ld. CIT (A) instead of verifying the facts that the assessee has offered the income related with bank account and the FD’s,in AY 2008-09 and AY 2009-10, have taxed the same in AY 2007-08. In our view the AO is defying the order of Settlement Commission which is against the propriety of hierarchy of various authorities under the Act. It is settled law that under the Income-tax Act the same income cannot be taxed twice.
Hence, the grounds of appeal raised by the assessee are accepted. The AO is directed to verify the facts, only if the income brought to tax by AO in his order under section 143(3) rws 147 dated 21.03.2014 has been offered by assessee before Settlement Commission or not and the assessee in case the assessee has already paid the tax on such additional income, delete the entire addition accordingly.
6. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 11th day of October 2017. Sd/- Sd/- (P.K. BANSAL) (PAWAN SINGH) (VICE-PRESIDENT) JUDICIAL MEMBER Mumbai; Dated 11/10/2017 S.K.PS Copy of the Order forwarded to :
1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT Shri Shivkumar C. Acharya