MANVEER SINGH,GHAZIABAD vs. ITO,WARD-1(4), GHAZIABAD

That on the facts and in the circumstances of the case and in law impugned order passed by Learned Assessing Officer (‘Ld. AO’) is illegal and bad in law since relevant reassessment proceedings have been initiated merely on the basis of AIR information and without any independent application of mind by the Ld. AO.

That on the facts and in the circumstances of the case and in law, the impugned assessment order needs to be set-aside as the satisfaction recorded by the Pr. CIT is mechanical and without judicious application of mind.

That on the facts and circumstances of the case, the reassessment proceedings is without jurisdiction, illegal and bad in law in as much as the - copy of complete reasons (alongwith details/ material/ annexures referred therein) were not provided to the appellant.

That the orders passed by the Ld. CIT(A) and Ld. AO are against the principle of natural justice. Merits - Without Prejudice 7. That the addition of Rs. 10,90,380 made under Section 69 of the Act to the income of the Appellant is not tenable under the facts of the case since the same has been made in gross ignorance of the fact that the source of cash deposited in the bank account were either from the withdrawals made from the relevant Manveer Singh bank account or receipts generated during the course of agricultural business.

That on the facts and in the circumstances of the case and in law, the addition of Rs. 10,90,380/- in the hands of the Appellant is unwarranted in law since the entire cash deposited with the bank account cannot be treated as income of the Appellant and only a gross margin earned from the Appellant’s business can be treated as income of the Appellant.

That the addition of Rs. 10,90,380/- made under Section 69 of the Act to the income of the Appellant is not tenable under the law because additions are made in gross ignorance and in violation of real income theory of taxation which states that no income could be earned without incurring expenses for the same.

That on the facts and in the circumstances of the case and in law, the Ld. AO erred in making the addition upon ex-parte material, in gross violation of principles of natural justice.”

The AO made addition of Rs.10,90,380/- on the alleged cash deposits based on AIR information even without obtaining the bank statement and keeping in it on record. The revenue authorities are expected at least to obtain the bank statement before issue of notice u/s 148 of the Income Tax Act, 1961 and completion of the assessment proceedings u/s 144 of the Act. Since, the revenue could not bring anything on record with regard to the alleged deposits (bank statement) the tenets of “Best judge assessment” are grossly flouted. The addition made by the AO is hereby deleted.