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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)-3, Surat [for short to as “LdCIT(A)”] dated 13.06.2018 for assessment year 2009-10, which in turn arises out assessment order passed by Assessing Officer under section 144 r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 05.08.2016. The assessee has raised the following grounds of appeal:-
1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in re-opening the assessment and issuing notice u/s 148 of the I.T. Act 1961.
(A.Y 09-10) Sh. Bhulabhai P Patel
2. On the facts and circumstances of the case as well law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.10,26,000/- on account of alleged unexplained funds.
It is therefore prayed that the above addition may please be deleted as learned embers of the Tribunal may deem it proper.
4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
Brief facts of the case are that case of assessee was reopened on the direction of Ld. CIT(A) in appeal for assessment year 2010-11 that the cash credit in the bank account of Rs.10,86,648/- deposited on 31.12.2008 was required to be taxed in assessment year 2009-10 i.e. in the year under consideration. On the basis of such direction, the Assessing Officer reopened the case of assessee for assessment year 2009-10. Notice under section 148 dated 14.10.2015 was issued and served upon the assessee. The Assessing Officer during re-assessment proceedings issued show cause notice as to why amount of Rs.10,86,648/- should not be added to the total income of assessee. In response thereto the assessee filed his reply dated 04.08.2015. In the reply, the assessee submitted that he has sufficient agricultural income and other source of 2 (A.Y 09-10) Sh. Bhulabhai P Patel income of his family. Further, the assessee explained that the deposits were made with Shree Madhi Vibhag Khand Udyog Sahakari Mandli Ltd. in the name of various family members as well as relatives of assessee. The assessee also submitted that he has having salary income. The reply of assessee was not accepted by the Assessing Officer. The assessing officer recorded that he is specifically directed by ld CIT(A) to issue notice under section 148 and taxed the deposits in question of Rs. 10.26 lakhs in the hands of assessee. Accordingly, the assessing officer passed assessment order dated 05.08.2016 under section 144 r.w.s. 147 of the Act by making addition of Rs. 10.26 Lakhs.
3. Aggrieved by the addition as well as reopening, the assessee filed appeal before Ld. CIT(A). Before Ld. CIT(A) the assessee made his submission. The submission of assessee is recorded in para-6 of the order of Ld. CIT(A). The assessee in his submission, submitted that Assessing Officer reopened the case of assessee in compliance with the direction of Ld. CIT(A). The assessee produced evidence and explained before the Assessing Officer about the source of such cash credit but the Assessing Officer rejected the (A.Y 09-10) Sh. Bhulabhai P Patel submission made by assessee and added the amount and interest on such deposits to the income of assessee. The assessee further explained that initially the case of assessee was reopened for assessment year 2010-11 to verify the genuineness of bank deposits of Rs.24.25 lakh. In this regard, assessee explained that fixed deposits by taking some loan from relatives and friends as son of the assessee applied for VISA to prove the credibility in the form of bank balance, the assessee made such deposits. The assessee also submitted that he is an agriculturist and also employed with Shree Madhi Vibhag Khand Udyog Sahakari Mandli Ltd. The assessee further explained that fixed deposit from salary income and fixed deposit with Shree Madhi Vibhag Khand Udyog Sahakari Mandli Ltd. and on maturity of such fixed deposit the amount was further deposited in fixed deposit. The assessee also explained that he is living Bardoli where cost of living is too low and assessee is doing cultivated agricultural land of 10 vighas and cultivated sugarcane and seasonal crop and net revenue earned from such agricultural income at Rs.10 lakhs per annum. The assessee also furnished copy of Form 7/12 and 8A (A.Y 09-10) Sh. Bhulabhai P Patel respectively. The assessee also submitted that his family withdrawn Rs.4,59,535/-, Rs.5,36,429/- and Rs.9,03,757/- onwards in assessment years 2003-04 to 2006-07 which is totaling to Rs.18,99,721/-. Besides that, assessee is also having income from salary approximately 2 lakhs per annum. Out of his total income, the assessee invested in fixed deposits of Rs.10.26 lakh on the name of his various family members. The assessee also produced his salary certificate issued by Shree Madhi Vibhag Khand Udyog Sahakari Mandli Ltd., copy of fixed deposit and maturity deposits in the accounts of assessee to prove the genuineness of transaction.
The Ld. CIT(A) after considering the submission of assessee and the assessment order, held that in appeal for assessment year 2010-11 his predecessor has given finding after examining the same, he has no jurisdiction to review the finding of his predecessor and confirmed the addition made by Assessing Officer. Further aggrieved the assessee has filed present appeal before the Tribunal.
I have heard the submissions of Ld. Authorized Representative (Ld.AR) for the assessee and Ld. Senior (A.Y 09-10) Sh. Bhulabhai P Patel Departmental-Representative (Ld. Sr-DR) for the Revenue and perused the materials available on record. The Ld.AR for the assessee submits that the case of assessee was reopened on the direction of Ld. CIT(A) in appeal for assessment year 2010-11. Before Assessing Officer, the assessee explained the source of credit but Assessing Officer instead of considering the submission of assessee made addition without giving any independent corroborative finding. Before Ld. CIT(A) the assessee again explained the source of bank deposits and the evidence about his agricultural income. The Ld. CIT(A) despite recording the complete details and submission made by assessee confirmed the action of Assessing Officer by taking view that he has no power to review the finding of Ld. CIT(A) (his predecessor) for assessment year 2010-11. The Ld. AR for the assessee submits that action of lower authorities in not considering the submission made by assessee is unjustified though the assessee explained the source of such deposits. The Ld. AR for the assessee submits that he has filed the certificate issued by Shree Madhi Vibhag Khand Udyog Sahakari Mandli Ltd., wherein it is clearly showed that (A.Y 09-10) Sh. Bhulabhai P Patel assessee has made deposits in year 2003-04 of Rs.6,76,724/- and withdrawn only of Rs.4,59,353/-. Similarly, in the year 2004-05 the assessee has deposited Rs.4,27,274/- and made withdrawn of Rs.5,36,429/- and in year 2005-06, the assessee made withdrawal of Rs.9,03,757/-. Thus the assessee made total withdrawal of Rs.18,99,721/-. The assessee is having his agricultural land of 10 vighas, which is not disputed by lower authorities. Besides, assessee also employed with Shree Madhi Vibhag Khand Udyog Sahakari Mandli Ltd. and having earned income from salary approximately Rs.2.00 lakh per annum. Thus, assessee was having sufficient withdrawal. The Ld. AR for the assessee submits that assessee has fully explained his money withdrawal, therefore, no addition is liable to be sustained for the year under consideration. On reopening, Ld. AR for the assessee submits that in case the assessee’s contention is accepted on merit, he will not press the issue against reopening.
On the other hand, Ld. Sr-DR for the Revenue after hearing the submission of Ld.AR for the assessee and going through