SHRI RAJESH KUMAR GUPTA,,LUCKNOW vs. INCOME TAX OFFICER, JOUNPUR, JAUNPUR

This appeal of the assessee is directed against the order dated 28.11.2019 of ld. CIT(A)-1, Lucknow for the Assessment Year 2008-09. The assessee has filed revised grounds of appeal as under: “1. Because the proceeding, initiated u/s. 148 of the Income Tax Act, and the reassessment framed thereafter resolved without jurisdiction the reassessment framed to be quashed.

2. Because the notice issued u/s 148 of the Income Tax Act, and the reassessment framed thereafter all are without jurisdiction the assessment framed the same be quashed.

3. Because the ld. ld. CIT(A) passed the order without given proper opportunity of being heard, that is bad in law and liable to remand back to ld. ld. CIT(A).

3. On the other hand, ld. DR has submitted that the assessee has never filed the return of income and therefore the Assessing Officer has issued notices u/s. 148 of the Act on the basis of the AIR of deposits of Rs.26,97,050/- made by the assessee during the year in the ICICI Bank account. The said notice was issued after four years from the assessment year however, the assessee did not file any return of income in response to the notice issued u/s. 148 of the Act. In those circumstances, the Assessing Officer has passed the best judgment assessment as per the information available with the Assessing Officer. The ld. CIT(A) has considered the explanation of the assessee and noted that the withdrawal as claimed by the assessee is made by some third party and not by the assessee therefore, the same cannot be considered as source of the subsequent deposit. The ld. CIT(A) has called for remand report from the Assessing Officer and after verification of the fact that the withdrawals were made by different person not by the assessee, the explanation of the assessee was not found to be tenable. He has relied upon the orders of the authorities below.

4. I have considered the rival submissions as well as the relevant material available on records. The Assessing Officer issued notice u/s 148 on the basis of AIR information for the deposit of Rs.26,97,050/- in the bank account of the assessee. Since the assessee did not respond to the notices issued by the Assessing Officer therefore the Assessing Officer assessed the total deposit as income of the assessee. Before the ld. ld. CIT(A), the assessee explained that he 4 wanted to take loan from the bank and to develop his business. Since the assessee was not having good turnover on record therefore it was not possible to take the financial help from the bank. The assessee further explained that the assessee has used own money as well as relative money total amounting to Rs.1,25,000/- by depositing in the bank in small amount in parts and withdraw the same through relatives and again deposited in the bank account. This process was repeated many times during the year to reach the target of turnover. Thus the assessee explained before the ld. ld. CIT(A) that the assessee’s owned money was circulated in the deposit and withdrawal with the help of his relative to show the enhanced turnover for the purpose of taking the credit facility from the bank and therefore the deposit cannot be assessed as income of the assessee. The ld. ld. CIT(A) after calling for a remand report from the Assessing Officer has confirmed been the addition on the ground that the withdrawal was made by the third person not by the assessee and the assessee has failed to explain how these three persons with whom the assessee has shown the transactions of transfer of money through cheques was received back by the assessee for the subsequent deposit.