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2023 (12) TMI 1257 - ITAT SURATValidity of reopening of assessment - addition u/s 69A - mandation of disposing objections of assessee - assessee has demanded during the assessment proceedings, by way of a letter stating that he was filing Income Tax Return regularly and therefore reopening of his case under section 147/148 of the Act, is not valid - HELD THAT:- Assessee had objected reopening of assessment u/s 147/148 of the Act. Therefore, it was the duty of the Assessing Officer to dispose of the objections raised by the assessee in respect of reopening of his case u/s 147/148 of the Act. However, I note that Assessing Officer did not dispose of the objection raised by the assessee, by way of passing speaking order, in writing and therefore re-assessment proceedings should be quashed on this count only. Assessee had objected reopening of assessment u/s 147/148 of the Act. Therefore, it was the duty of the Assessing Officer to dispose of the objections raised by the assessee in respect of reopening of his case u/s 147/148 of the Act. However, we note that Assessing Officer did not dispose of the objection raised by the assessee, by way of passing speaking order, in writing and therefore re-assessment proceedings should be quashed on this count only. Reasons were recorded by the Assessing Officer in an arbitrary manner and there is no application of mind by the AO. For example, the reasons stated that assessee has deposited an amount in his bank account to the tune of Rs. 14,55,300/-, whereas the actual amount deposited in the bank account by the assessee was to the tune of Rs. 21,54,800/- hence reasons were recorded on arbitrary basis and there is no application of mind by the AO. Therefore, respectfully following the binding precedent of Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd [2002 (11) TMI 7 - SUPREME COURT] quash the reassessment proceedings. Decided in favour of assessee. Addition u/s 69A - as per AO considering the smallness of the amount of cash deposit a suitable addition, say, @ 5% of the total cash deposit in the bank account of assessee may be sustained in the hands of assessee - HELD THAT:- Admittedly, AO during the assessment proceedings made addition on account of cash deposited aggregating to Rs. 2,64,500/-, as well as amount deposited by cheques is to the tune of Rs. 4,20,355/-. The amount deposited by way of cheques in the bank account is out of known sources, hence addition should not be made in the hands of the assessee, hence addition to the tune of Rs. 4,20,355/- is hereby deleted. Cash deposit it would be in the interest of justice that only profit eliminate @ 5% should be considered on total cash deposits of Rs. 2,64,500/-. Therefore, the Assessing Officer is directed to consider net profit @ 5% of total cash deposits. Accordingly, the addition is restricted in the hands of the assessee to the tune of Rs. 13,225/-. This assessee`s appeal is therefore, partly allowed in above terms.
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