VIBRANT SHELTER PVT.LTD,,NAGPUR vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE - 13,, PUNE

On the facts and circumstances of the case, the assessment so framed is against the principles of natural justice making the assessment and the additions so made unsustainable and bad in law.

Mr. Hirani, first of all sought to challenge validity of the impugned reopening itself as not based on any “tangible” material and having taken recourse by the Assessing Officer by adopting “a borrowed satisfaction” only. He sought to buttress the point that the learned Assessing Officer herein had no access to the assessee’s

We find no substance in the assessee’s instant first and foremost legal ground as it has nowhere placed on record the corresponding reopening reasons going to root of the matter. That being the case, we express our inability to decide the instant clinching issue of validity of reopening on account of assessee’s failure in drawing some support from the Assessing Officer’s assessment order dated 30.03.2016 in casual fashion. This is indeed coupled with the fact that the learned counsel could not dispute the assessment findings that the assessee had not filed any return, even after receiving sec.148 notice, so as to question the validity of the impugned reopening in light of GKN Driveshafts (India) P Ltd., vs. ITO [2003] 259 ITR 19 (SC). We accordingly reject the assessee’s instant first and foremost substantive grievance.

The Revenue has drawn strong support from both the learned lower authorities action making the impugned addition.

We have given our thoughtful consideration to the foregoing vehement contentions and find no merit in the assessee’s stand in principle. We make it clear that the assessee had admittedly deposited the impugned cash amount(s) in it’s bank account(s). It has further failed all along to explain the corresponding alleged customer(s) forming source of the said deposits. So far as the assessee’s technical stand of non- applicability of sec.68 is concerned, hon’ble jurisdictional high court’s landmark decision in Arun J Muchalla vs. CIT [2017] 399 ITR 256 (Bombay) has settled the issue that mere mentioning of a wrong provision in the impugned addition does not ipso facto render the same as not sustainable in law. We thus reject the assessee’s vehement arguments seeking to delete the impugned addition on merits in principle.

Now comes the equally important aspect of quantification of the impugned addition. Mr. Murkunde could hardly dispute that the assessee’s impugned bank statement also involves reversal of an entry dated 27.01.2010 to the tune of Rs.5 lakhs as “funds insufficient”. We fail to understand as to how such an entry which is not actually credited, would form subject matter of an addition as unexplained income under the provisions of the Act. Faced with the 5 ITA.No.285/PUN./2018 situation, we grant limited relief to the extent of Rs.5 lakhs to the assessee in very terms. The impugned addition of Rs.84,05,721/- is affirmed to the extent of Rs.79,05,721/- in otherwords. The assessee gets relief of Rs.5 lakhs. Ordered accordingly.

The assessee’s last arguments seeking “peak” credits addition is found to be carrying no merit as it could not indicate any withdrawal and re-deposits from the said bank account statement forming part of the record. Rejected accordingly.

This assessee’s appeal is partly allowed in above terms.