LAGAN VINCOM PVT. LTD.,KOLKATA vs. I.T.O., WARD - 1(1),, KOLKATA

At the time of hearing, the assessee pressed only ground nos.6,7 and 8, in which the common issue raised is against the order of ld. CIT (A) confirming the addition of ₹1,22,50,000/- as made by the ld. AO by wrongly invoking the provisions of Section 69A of the Act when the said transactions were duly recorded in the books of the assessee.

The facts in brief are that the assessee filed the return of income on 22.03.2013, declaring total income of ₹1,70,693/-, which was duly

In the appellate proceedings, the ld. CIT (A) upheld the addition on the ground that investment company did not have any genuine creditworthiness and consequently the transactions were held to be not genuine.

A perusal of the above figure would indicate that the assessee has deposited Rs.13,87,33,090/- during the accounting period of this A.Y. except the period of 8th November to 31st December, the ld. Assessing Officer has not doubted about these deposits. Their sources are identical. He even did not deem it necessary to examine the source of that money His only doubt is qua the source of Rs.2,13,00,000/-, out of which he has made addition of Rs.1,29,00,000/- roughly. In the assessee’s line of business, cash is being generated regularly which depicts in the earlier year where assessee has deposited Rs.3.17 crores during the period from 8th November to 31st December, 2015. This was not a demonetization period but no doubt was expressed by the revenue on this deposit. The total deposit in the year was Rs.18.13 crores including the period of 8th November to 31st December, 2015. In the A.Y. 2017- 18, i.e. involved in the present appeal, total deposit in cash was of Rs.16,00,33,090/-. The ld. Assessing Officer has accepted the majority of the cash deposits.

We have reproduced the assessment order but no specific reason is discernable from the finding of the ld. Assessing Officer for disbelieving cash deposits during demonetization period. To our mind, it is an arbitrarily exercise of powers at the end of the revenue. There is no logic or reasoning given for not accepting these cash deposits. The assessee was in such a line of business, where it has to sale pulses, wheat gram, “15. The use of the word "thereon" is important and it reflects that the Tribunal has to confined itself to the questions, which are arising or are subject matter in the appeal and it cannot be travelled beyond the same. The power to pass such orders as the Tribunal thinks fit can be exercised only in relation to the matter that arises in the appeal and it is not open to the Tribunal to adjudicate any other question or an issue, which is not in dispute and which is not the subject matter of the dispute in appeal.

In the present case, it is apparent that the subject matter of the dispute all through before the Tribunal in appeal was only with regard to the addition of alleged amount of the gift received by the appellant-assessee as his personal income under Section 68 of the Act and not whether such an addition can be made under Section 69- A of the Act.

In view of the above, it can safely be said that the Tribunal travelled beyond the scope of the appeal in making the addition of the said income under Section 69-A of the Act. It may be worth noting that the Tribunal has recorded a categorical finding that "it is clear that under the provisions of Section 68, the addition made by the Assessing Officer and sustained by the CIT (Appeals) cannot be sustained, meaning thereby that the Tribunal was of the opinion that the Assessing Officer and the CIT (Appeals) committed an error in adding the aforesaid amount in the income of the appellant-assessee under Section 68 of the Act.

In view of the above, when the said income cannot be added under Section 68 of the Act and the Tribunal was not competent to make the said addition under Section 69-A of the Act, the entire order of the Tribunal stand vitiated in law.

Accordingly, we answer the question of law, as framed above, in favour of the appellant-assessee and against the Revenue and hold that the Tribunal was not

In the result, the appeal of the assessee is allowed.