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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI KUL BHARAT
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), Rohtak, dated 24.07.2019, pertaining to the assessment year 2013-14. The assessee has raised following grounds of appeal:
“1. The assessment order passed by the AO is bad in law and fact for want of jurisdiction under facts and circumstances of the appeal. 2. The appellant humbly reiterates all the facts and grounds of appeal raised before the Ld CIT(Appeals). The CIT(A) has blindly confirmed the Assessment order.
3. The CIT(A) has committed a mistake on facts and circumstances prevailing in the case and as per provision and scheme of the Act. The CIT(A) has not considered legal and factually that the reasons recorded u/s 148 has no relevancy with material available on the record. The reasons recorded under Sec. 148 are different from material available on record. There is no vital link between reasons and evidence.
4. The CIT(A) has committed a mistake by treating the amount received from Sh. Duli Chand as appellant’s income. It is contrary to evidence available on the income tax assessment.
5. The CIT(A) has committed a mistake in respect of amount received from Sh. Duli Chand under the facts and circumstances of the appeal.
6. The case laws relied upon by the CIT(Appeals) has no application to the appeal in view particular facts and circumstances.”
Facts giving rise to the present appeal are that in this case the Assessing Officer was having information regarding cash deposited by the assessee amounting to Rs. 1,95,20,000/- in his savings bank account held with HDFC Bank, Bhawal during the F.Y. 2012-13. Therefore, the case of the assessee was reopened to examine the source of cash deposits. In response to statutory notices the assessee filed his return of income declaring total income at Rs. 2,90,800/-. Thereafter, assessment u/s 143(3) read with section 147 of the Income-tax Act, 1961 (the “Act”) was framed vide order dated 26.12.2016. Thereby the Assessing Officer, after considering the submissions of the assessee, treated a sum of Rs. 16,36,441/- as unexplained and added the same to the income returned by him. Thus, the AO assessed income at Rs. 19,26,941/-. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals) who dismissed the appeal. Now the assessee is in appeal before this Tribunal.
Learned counsel for the assessee submitted that the lower authorities failed to appreciate the fact that the assessee had furnished evidences relating to the availability of Rs. 15,00,000/- which he received from Shri Duli Chand and the authorities below without considering the facts, evidences and the contentions made the impugned addition.
Apropos to grounds of appeal nos. 1 to 3, learned counsel for the assessee submitted that the reopening is illegal on account of the fact that the additions have not been made in respect of the issues which were the basis for initiating proceedings u/s 147 of the Act. In this regard the assessee has placed reliance on various case laws as under:
- Bir Bahadur Singh Sijwali Vs. ITO (2015) 68 SOT 197 (ITAT) Delhi; - CIT Vs. Smt. Maniben Velji Shah (2006) 283 ITR 453 (Bom.); - Smt. Kantamani Venkata Satyavathi Vs. ITO (1967) 64 ITR 516 (AP); - ITO Vs. Electro Steel Castings Ltd. (2003) 264 ITR 410 (Cal.); - Smt. Munni Devi Vs. ITO Ward-2, Rewari (ITAT New Delhi); - CIT Vs. Mohmed Juned Dadani (2013) 355 ITR 172 (Guj.); - Bharat Singh Vs. ITO ward-2, Rewari, ITAT-Delhi dt. 23.5.2022 Therefore, he prayed that the reopening deserves to be quashed.
On the other hand learned DR opposed the submissions and supported the orders of the authorities below. He submitted that as per the report the assessment was reopened on the ground of the cash deposited by the assessee. Therefore, it is not the case where the AO has made addition in respect of unrelated issue. The assessee failed to explain the source of cash deposits. The assessee’s plea is that part of the cash was received from one Shri Duli Chand. Therefore, he submitted that the case laws as relied upon the learned counsel for the assessee would not help.
I have heard the rival contentions and perused the material available on record. I do not find any merit in the contention of the assessee that the reopening is illegal and is not based upon the reasons recorded by the Assessing Authority.
Undisputedly, additions are made on the basis of cash deposited by the assessee and the assessee has failed to point out where the AO did not consider the facts available at the time of reopening of the assessment. Therefore, ground nos. 1 to 3 of the assessee’s appeal are dismissed.
Ground no. 4 is in respect of merit of the addition. Before the lower authorities it was claimed by the assessee that the amount was received from one Shri Duli Chand. The assessee also filed affidavit of Shri Duli Chand. The Authority below without considering the same sustained the addition. Learned counsel submitted that the action of the authorities below is highly unjustified.
On the other hand, learned DR supported the orders of the authorities below.
As a matter of fact, from the impugned assessment framed u/s 143(3)/147 of the Act it is revealed that out of cash deposits of Rs. 1,95,20,000/- the AO himself accepted the source of deposits to the tune of Rs. 1,78,84,359/- as explained and made addition of the remaining amount of Rs. 16,36,141/- treating the same as unexplained cash credit u/s 68 of the Act. In appeal, before the learned CIT(A), the assessee had filed application u/s 46A of the Act for admission of additional evidence in the form of an ‘agreement to sell’ of one Shri Duli Chand with Smt.
Santra dated 11.05.2012. The assessee also filed affidavit of said Shri Duli Chand wherein he has admitted that he had received Rs. 15 lakh as advance in lieu of agreement to sell his land which he had given to the assessee for purchase of land.
The stand of the assessee is that the sum of Rs. 15,00,000/- received from Shri Duli Chand for propose sale of land was deposited by him in his bank account and since the deal could not be materialized the same was returned back to Shri Duli Chand. The learned CIT(A) after considering the remand report sought from the AO, rejected the claim of the assessee. Considering the totality of facts of the present case and the fact that the averments made in the affidavit of Shri Duli
Chand could not be rebutted by the Revenue, I am constrained to delete the addition made by the AO on account of unexplained cash deposited by the assessee. Ground no. 4 of the assessee’s appeal is allowed.
Ground nos. 5 & 6 are general in nature and need no adjudication.
In the result, assessee’s appeal is partly allowed.
Order pronounced in open court on 14th July, 2023.