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Income Tax Appellate Tribunal, A/“SMC” BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI
आदेश / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: All these four appeals are filed by the Assessee are directed against the different order of the Learned Commissioner of Income Tax(A)-4, Chennai, passed under section 143(3) r.w.s. 147 of the Act for the assessment years 2006-07,2007-08, 2008-09 & 2009-10.
Since issues involved in all these Assessee’s appeals are common in nature, these appeals are clubbed together, heard together, disposed off by this common order for the sake of convenience.
The first common ground in these four appeals is with regard to reopening of assessment within four years from the end of the relevant assessment year is bad in law as there is no fresh tangible material available in the hands of AO to re-open the assessment.
A.Y 2006-07:
Notice u/s.148 was issued on 12.09.2011 i.e. after the four years from the end of the relevant to assessment year. The assessment was reopened on the reason that assessee has not disclosed certain cash deposits into bank account and there was no assessment u/s.143(3) of the Act for assessment year 2006-07. The return was processed u/s.143(1) of the Act, Since there was no original assessment u/s.143(3) of the Act, first proviso to Sec.147 would not come to help of the assessee. Accordingly, this ground raised by the assessee in A.Y 2006-07 stands dismissed.
A.Y 2007-08:
The re-assessment notice was issued dated 08.09.2011, which is within four years of end of the relevant assessment year. Being so, there is a reason to believe that income escaped from the assessment as the assessee has not shown the bank deposits and re-assessment is valid.
A.Y 2008-09:
The re-assessment was re-opened on 08.09.2011, which is within four years of end of the relevant assessment year. Being so, there is a reason to believe that income escaped from the assessment as the assessee has not shown the bank deposits and re-assessment is valid.
A.Y 2009-10:
The re-assessment notice was issued on 08.09.2011, which is within four years of end of the relevant assessment year. Being so, there is a reason to believe that income escaped from the assessment as the assessee has not shown the bank deposits and re-assessment is valid.
Hence, the re-opening is confirmed for all these four years.
On merits, all these assessment years, the assessee is challenging the addition made towards unexplained deposits in the bank account and also gift received from various parties. Ld.A.R submitted that the cash flow filed by the assessee before the lower authorities is self-explanatory and due credit to be given to the source explained in the cash flow statement. It is also submitted that the AO cannot add both the source and its application as income of assessee, which is a double addition.
On the other hand, ld.D.R relied on the order of CIT(A).
I have heard both the parties and perused the material on record. In these assessment years, the AO made addition towards cash deposits into bank account as the source is not explained.
Whenever assessee deposits any cash or cheque to the bank, it is incumbent on the part of assessee to explain the source from which it is deposited. In the present case, the assessee failed to do so.
Before us also, assessee did not place any iota of evidence to the source of deposits. Being so, I am not in a position to appreciate the argument of the ld.A.R.
Regarding gift received from the spouse of the assessee, ld.A.R submitted that the assessee received the gift from the assessee’s spouse and it is to be deleted. The assessee received Rs.2 lakhs in the assessment year 2006-07; Rs.1 lakh in 2007-08; Rs.5,50,000/- in assessment year 2008-09; and Rs.3 lakhs in 2009-10. The assessee has not explained the capacity fo the assessee’s spouse to advance the money to the assessee’s spouse.
Having capacity to gift this amount, then it cannot be considered as unexplained in the hands of assessee. Being so, in the interest of justice, the issue is remitted to the file of AO with a direction to assessee to furnish the details of her PAN, her income return and details of cash flow statement to make gift to the assessee and the AO shall consider it and decide in accordance with law.
The other argument of the ld.A.R is that the AO had made addition both sources of fund and its application as unexplained income of the assessee. In my opinion, this leads to double addition and the AO shall limit either of them and if the source not explained and found to be unexplained, then it is to be considered as unexplained income and thereafter, its application cannot be brought to tax. With this observation, the issue in dispute is remitted to the file of AO for fresh consideration.
In the result, all the four appeals of the assessee are partly allowed for statistical purposes. Order pronounced in the open court on 10th July, 2017.