PARUL ROY,MUMBAI vs. ITO WD 20(2)(3) & CIT(A) XXXIX,

Assessee by : Shri Umesh Narvekar (AR) Revenue by : Shri Sambit Mishra (DR) Date of hearing : 16.02.2017 Date of Pronouncement : 03.03.2017 Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JM: 1. This appeal u/s 253 of the Income-tax Act (‘the Act’) is directed by the assessee against the order of Ld. Commissioner of Income Tax (Appeals) [for short ‘the CIT(A)] –39, Mumbai dated 25.02.2015 for Assessment Year (AY) 2008-09. Though, the assessee has raised as many as 10 Grounds of appeal, but most of the Grounds of appeal are either argumentative or general in nature. However, as per our considered opinion only 3 substantial Grounds of appeal emerges from the Grounds of appeal raised by assessee. (i) If the order of assessment order was passed without service of notice u/s 143(2) of the Act. (ii) If the ld. CIT(A) erred in confirming the addition of Rs. 4,65,720/- under the head “Income from Other Sources”, added on the basis of AIR information. (iii) If the ld. CIT(A) erred in confirming the addition of Rs. 33,18,100/- u/s 68 of the Act on the basis of AIR information.

2 Ms Parul Roy 2. Brief facts of the case are that the assessee is an individual, filed his return of income for relevant AY on 20.08.2009 declaring total income of Rs. 8,77,100/-. The assessment was completed u/s 143(3) of the Act on 28.12.2010. The Assessing Officer (AO) while passing the assessment order made the addition of Rs. 33,18,000/- u/s 68 of the Act and addition of Rs. 5,22,213/- on account of interest income under the head “Income from Other Sources”. Both the additions were made by assessing officer on the basis of AIR information. On appeal before Commissioner (Appeals) the addition u/s 68 of the Act was sustained. However, on the addition under the head “Income from Other Sources”, the assessee was restricting to Rs. 4,65,720/- by giving partial relief to the assessee. The Grounds of appeal by assessee that no proper and valid notice under section 143(2) was served, was also rejected by ld. CIT(A). Further aggrieved by the order ld. CIT(A). Further aggrieved by the order of ld Commissioner (Appeals) the assessee has filed the present appeal before us.

3. We have heard the ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the Revenue and perused the material available on record. Ground No.1 relates to the service of notice u/s 143(2) of the Act. The ld. AR of the assessee argued that no notice u/s 143(2) was served upon the assessee. In absence of notice, the assessment order is invalid. The ld. AR of the assessee invited are attention at page 44 & 45 of the Paper Book (PB) filed by assessee. The Page No. 44 of the PB, is the copy of notice u/s 143(2) dated 28.08.2010 and Page No. 45 is the copy of Acknowledgement Card (AD) of registered notice [Notice under section143(3)]. The ld. AR of the assessee submitted that the copy of AD Card and the copy of notice which was provided to the assessee during the First Appellate Proceeding. The copy of AD Card (PB-45) does not bear the signature of assessee. On our specific query the ld. AR of the assessee fairly admitted that the notice as well as AD Card bears the correct address of assessee. On the other hand, ld. DR for the Revenue strongly opposed the contention raised by ld. AR of the assessee. The Ld. DR for the Revenue argued that the notice was sent through Speed-Post with AD and was duly served upon the assessee as AD Card was received back through postal authorities by AO after service of (postal article) notice u/s 143(2) of the Act. The ld. DR for the Revenue further submitted that subsequent notice u/s 142(1) was also received by the assessee on the same address. The ld. DR for the Revenue invited our 3 Ms Parul Roy attention to the reply filed by assessee in response to the notice u/s 142(1), wherein the assessee has referred that the notice was received through Security Officer of the Society. The ld. DR for the Revenue further submitted that the contention raised by the assessee are based on self-serving statement of assessee that no notice was served. The ld. DR for the Revenue argued that u/s 114(f) of Indian Evidence Act and section 27 of General Clauses Act, there is presumption that notice is served on the addressee, if the notices is sent at the correct address in the usual course by registered post, if the same is not returned back by postal authorities.

4. We have considered the rival contention of the parties and have seen the notice dated 18.08.2010 and the copy of Acknowledgment received thereafter in the office of AO. We have also seen the original of AD Card from the record of AO along with the record of other notices sent u/s 142 of the Act. We have noticed that notice u/s 143(2) was sent at the correct address of the assessee. The ld AR for the assessee has not disputed the address mentioned on the AD card. Moreover, there is presumption under section 114(f) of India Evidence Act and section 27 of General Clauses Act, that if registered article sent at the correct address in usual course of its business, it would have been served to the assessee, if not returned back unserved. The ld. AR of the assessee raised the Ground that no proper and valid notice was served. There is no contention on behalf of assessee that no such notice u/s 143(2) of the Act was issued by AO or issued after due date. The other notice u/s 142(1) of the Act was admitted by the assessee to have been received on the same address. The assessee has not claimed that the other notices u/s 142 was received by assessee herself. Assessee herself has disclosed that notice u/s 142 was received through Security Officer of the Society Building on 27.10.2010. The presumption u/s 27 of General Clauses Act and 114(f) of Indian Evidence Act is rebuttable presumption. The assessee failed to rebut the presumption except relying upon her self-serving statement. The assessee has not furnished any evidence that either she was not available at her address during the period when notice u/s 143(2) was allegedly served. Thus, in our view the contention of assessee is not plausible and the same is rejected. In the result, Ground No.1 raised by assessee is dismissed.

5. Ground No.2 relates to addition of Rs. 4, 65,720/- under the head “Income from Other Sources” on the basis of AIR Information. The ld. AR of the assessee argued that no 4 Ms Parul Roy sufficient time was given by AO to reconcile the statement of certificate/Form 16A issued by the Bankers of the assessee. During the first appellate proceeding, ld. AR of the assessee furnished the fresh Form-16A and submitted that due to data migration and mistake of the Bank, there is duplication in the entry as two different ID’s were opened by the Bank without the knowledge of the assessee. On the basis of evidence furnished before the ld. CIT(A). The ld. CIT(A) called the remand report from the AO. The ld. CIT(A) not considered the contention urged before him and restricted the addition of interest to Rs. 4,65,720/-, without giving further opportunity to the assessee. The ld. AR of the assessee filed a fresh copy of Form-16A (duplicate) which was allegedly issued on 30.05.2011 and submitted that the Bankers of the assessee has admitted their mistake about the duplication of interest entries. On the other hand, ld. DR for the Revenue supported the order of ld. CIT(A) and would argue that ld. AR of the assessee instead of bringing sufficient evidence to make the clarify in the facts always tried to create the confusion. The assessee herself admitted before the AO in the remand report. During the remand report vide her letter dated 15.07.2011 that there was concealment of income of Rs. 4,65,720/-. The AO duly recorded the contention of assessee in the remand report on the basis of which the addition on account of interest income was sustained to Rs. 4,65,720/-.

to the file of AO to re-examine the issue afresh and pass the order in accordance with law. The AO will be at liberty to call the complete details from the Bankers of assessee. The assessee is also directed to fully cooperate and provide complete information with regard to the Bank Account(s), saving or current and the details of interest earned during the relevant assessment year. With these observations, this Ground of Appeal is allowed for statistical purpose.

7. Ground No.3 relates to addition of Rs. 33,18,100/- u/s 68 of the Act. The ld. AR of the assessee argued that assessee has availed a loan from one Amit Katyal of Rs. 2.00 Crore during the relevant Assessment Year. The assessee has proved the identity, creditworthiness of lender and genuineness of transaction. The ld. AR of the assessee placed on record the copy of confirmation of loan dated 12.05.2012 and the memo of understanding executed by assessee and the lender dated 05.04.2007. The ld. AR of the assessee further argued that he has proved the identity/creditworthiness of person and genuineness of transaction and prayed that the addition u/s 68 of the Act may be deleted. On the other hand, ld. DR for the Revenue supported the order of authorities below. The ld. DR for the Revenue further argued that the assessee is taking inconsistent plea. Before the lower authorities, the assessee submitted that cash deposit was made out of cash in hand and re-deposited from earlier withdrawal and now submitted that assessee has availed loan. The Ld. DR for the Revenue argued that argument of the ld AR for the assessee is not tenable and the ground of appeal is liable to be rejected.

6 Ms Parul Roy 8. We have considered the rival contention of the parties and perused the material available on record. During the assessment proceeding, the AO on the basis of AIR Information noticed that assessee has deposited cash of Rs. 33,18,000/- in Savings Bank A/c in Centurion Bank of Punjab Ltd. The assessee has asked to provide the Bank details and source of cash deposit along with documentary evidence. The assessee contended that the cash deposits were out of cash in hand and re-deposited in cash which was earlier withdrawn. No other evidence was furnished; the AO not accepted the contention of assessee and treated the cash deposit as unexplained cash credit u/s 68 of the Act. During the First Appellate Proceeding on the similar contention the ld. CIT(A) called the remand report from AO. In the remand report, the AO submitted that the assessee filed his letter on 31.12.2010 and 24.12.2010 for explaining the source of cash deposit. The assessee contended that Rs. 20.7 Lakhs were withdrawn from Bank were re-deposited, Rs. 4,86,000/- was withdrawn from S.B. A/c No. 4890 and Rs. 15,84,000/- was withdrawn from Current Account No. 4780. No Bank summary was filed. After considering the remand report, the ld. CIT(A) concluded that the assessee has not substantiated her contention that cash has been deposited after withdrawal. The ld. AR of the assessee vehemently argued before us that the assessee has availed the loan and field confirmation of lender. We have seen that the assessee for the first time, before us, the documents related with loan from Amit Katyal and confirmation of loan. Though the assessee has not raised such contention before lower authorities.

is allowed for statistical purpose.

10. In the result, appeal of the assessee is allowed for statistical purpose.