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Order Under Section 254(1) of Income tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of Learned Commissioner of Income Tax (Appeals) [in short ‘Ld. CIT(A)’] / Learned National Faceless Appeal Centre (in short ‘the NFAC’), Delhi, dated 03.07.2023 for Assessment Year (AY) 2011-12. The assessee has raised the following grounds: “
1. On the facts and circumstances of the case as well as law on the subject, the learned assessing officer has erred in re-opening assessment u/s 147 by issuing notice u/s 148 of the I.T. Act, 1961.
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer by sustaining the addition of Rs.6,52,835/- u/s 69A on account of alleged unexplained money.
3. It is therefore prayed that above addition made by the assessing officer and confirmed by CIT(A) may please be deleted.
4. Appellant craves leave to add or alter or delete any other ground or grounds of appeal at the time of hearing before Your Honour.”
ITA. 505/SRT/2023/AY.2011-12 Pritesh P. Sidhpuria
Rival submissions of the parties heard and record perused. The learned authorised representative (ld. AR) of the assessee submits that assessee is a Non-resident Indian (NRI) and was staying in Dubai during the relevant period, the copy of passport of assessee showing the departure on 13.01.2010 and arrival on 01.07.2023 is placed on record at page nos.22 to 25 of paper book. The assessee has not earned any income in India, which could be taxable in India. The case of assessee was reopened on the basis of AIR information that there were cash deposits of Rs.4,51,000/- in the bank account of assessee which has escaped from assessment. During the assessment, various show cause notices issued to the assessee. The assessee attended that proceeding on 31.08.2018 and explained that he was facing a matrimonial litigation with his wife which was ultimately settled. The assessee opened a joint bank account with his mother and wife for the purpose of payment of maintenance to his wife. Mere deposit in the saving bank account does not constitute undisclosed income which could be considered as escaped from assessment. The reasons recorded for reopening was not a valid reason. The ld. AR for the assessee submits that since the reopening was made in valid reasons, thus the action initiated thereupon is void ab initio.
The ld. AR for the assessee further submitted that since the assessee was first account holder, therefore on the basis of deposit in the bank account, the entire liability cannot fasten on the assessee. The Assessing Officer has not investigated the fact despite bringing all the facts in his notice. The ld. AR for the assessee submits that once it is established that account was in ITA. 505/SRT/2023/AY.2011-12 Pritesh P. Sidhpuria the joint name of assessee, his mother Ms. Urvashi Sidpuria and wife Ms. Chaitali Sidpuria, the entire addition in the bank account cannot be added as undisclosed deposits. The ld. AR for the assesse submits that no income can be generated in cash in India when the assessee was not doing any business activity or there was no source of income of the assessee in India. The perusal of bank statement clearly shows that bank deposit was ultimately used for the purpose of making fixed deposits in the name of assessee of Rs.85,000/-, Rs.2,10,000/- in the name his mother and again Rs.2,00,000/- in the name of assessee. The assessee during the assessment, vide his letter dated 31.08.2018, after coming to India explained before the Assessing Officer that he was facing matrimonial litigation and in anticipation of settlement of such cash was received from friends and relatives and deposited in the name of joint account including in the name of his ex-wife and mother. The divorce proceeding was lingering in Civil Court, Surat therefore the money was deposited. The entire amount cannot be taxed in the hand of assessee.
In alternative submission, the ld. AR of the assessee submits that entire amount cannot be added in the joint account as income of assessee and at the worst only 1/3rd of cash deposit may be added in the hands of assessee. To support such submission, the ld. AR relied upon the decision of Surat Bench, in 146, 154 & 155/SRT/2020, dated 14.07.2023. In support of valid of reopening, the ld. AR relied upon the decision in ITO Vs Lakhmani Mewalal Das 103 ITR 437-SC, ITO Vs Bhavin Arunbhai Patel in ITA No. 456/SRT/2023 and Bir Bahadur Singh Sijwal Vs ITO 53 taxmann.com 366 (Delhi-Trib). 3 ITA. 505/SRT/2023/AY.2011-12 Pritesh P. Sidhpuria 5. On the other hand, ld. Senior Departmental representative (Sr DR) for the Revenue supported the order of lower authorities. The ld. Sr. DR submitted that Assessing Officer passed the assessment order under section 144 as no material, information or evidence were placed before the Assessing Officer. The Assessing Officer passed the assessment under section 144 in absence of such information. Therefore, the assessee is now precluded from raising objection against the validity of reopening. On merits of the additions, the ld. Sr DR for the revenue supported the orders of lower authorities. The ld Sr DR for the revenue submits that all the submissions of assessee was considered by CIT(A) as has been raised before this Bench.
I have considered the submission of both the parties and have gone through the order of lower authorities below. I find that case of assessee was reopened on the basis of information that a cash of Rs.4,51,000/- was deposited with Bank of Baroda (BoB) during relevant financial year in the account of assessee. The Assessing Officer on recording reasons, issued notice under section 148. The assessee neither complied with the notice under section 148 nor filed any reply in response to various notices issued by Assessing Officer. The Assessing Officer in order to verify deposit in the bank issued notice under section 133(6) to the banker. In response to such notice, the bank manager furnished the bank statement and informed that there was total deposit of Rs.6,52,835/-. The Assessing Officer by recording the fact that the assessee has not filed any reply completed the assessment order under section 144 by making addition of unexplained money earned out of undisclosed source. Before ld. CIT(A), the assessee objected against the reopening as well as against the addition made on merit. Before the ld. 4