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2019 (7) TMI 794 - AT - Income TaxBest Judgement assessment u/s 144 - Non-issue of notice u/s. 143(2) - unexplained bank deposit/s - assessment completed u/s 144 without notice - return filed on fag end of proceedings on the date order was also filed - HELD THAT:- The filing of the return by the assessee on 20.3.2013 is mischievous; in fact, an abuse of the process of law. It is, as observed, after the close of the hearing in the assessment proceedings. Sh. Kalia could not, on being asked during hearing about the provision of law under which the said return was filed on 20.3.2013, state any. No cognizance in law could be placed on such a ‘return of income’. The income, voluntarily ‘returned’, is, in any case, a source of information with the AO, which could without doubt be taken into account by him in framing the assessment. Further still, the obligation on the AO to issue a notice u/s. 143(2) is only if he intends to verify the return. Being not in a position to verify the return; a notice u/s. 143(2) cannot be regarded as an empty formality, he may in an appropriate case, as indeed the instant case, choose not verify the same and, consequentially, not issue notice u/s. 143(2). The ensuing assessment, as also observed in Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT] is an assessment u/s. 144. The instant assessment is an assessment u/s. 144, and not, as stated, u/s. 143(3). Rather, a return is not filed has to be supplemented by physical return, of which there is no mention or contention, in the absence of which the same cannot be said to have been filed. In fact, the completion of the said procedure after 20.03.2013, the date of assessment, even if so, is to moment, as the assessment stand already completed on that date. The assessment in the instant case, is accordingly, to be regarded as u/s. 144 r/w s. 147, and the AO is incorrect stating it to be u/s. 143(2) r/w s. 147. Considered whichever way, the assessee’s legal challenge is without merit, both on facts as well as, and for that reason as well, in law. In fact, the assessment as framed is in u/s. 144, and the Revenue authorities, were in law, under no obligation to accept the ‘additional’ evidences sought to be furnished by the assessee in the appellate proceedings. An appellate authority, when he so does, converts a s. 144 assessment into a s. 143(3) assessment, which is impermissible, as explained in CIT v. Rayala Corporation (P.) Ltd. [1995 (1) TMI 42 - MADRAS HIGH COURT] Taxability of lease rent for the agricultural land - HELD THAT:- For merits of addition assessee’s explanation with regard to lease rental of agricultural land, has been accepted by the ld. CIT(A), implying acceptance of the assessee’s claim of agricultural income to that extent. The same has, accordingly, been incorporated in the cash flow statement at ₹ 4 lacs (on 15.02.2005), as agricultural income. Taxability of cash gift - received from S. Jagjit Singh, the assessee’s father-in-law, on the occasion of the golden jubilee of the assessee’s marriage - HELD THAT:- There is also no evidence of the stated donor, S. Jagjit Singh, owning 21.82 acres of agricultural land, or his income, on record. Why, nobody keeps cash in such a high amount at home, and there is nothing to show of cash being withdrawn from bank on or before 03.04.2004. Rather why should the gift, which could easily be so from his bank account, be in cash, i.e., if it was from accounted income, i.e., assuming the source to be the said gift. In the absence of any corroborative material; rather, even as to the assessee’s marriage date – being unstated, the 50th anniversary of which forms the occasion for the gift, is not stated, the explanation of cash gift has, in my view, been rightly not accepted by the Revenue. Unexplained income - cash deposit in account - as per cash flow statement it was deposited out of withdrawal from assessee as well as from that of his wife and son account - HELD THAT:- Surely, the cash withdrawals and deposits in all the bank accounts (of all these three persons), is to be taken into account, to arrive at the availability of cash at any particular date during the year. Again, assuming no adverse circumstance/s, the said cash flow statement being prepared toward explanation of cash deposit of ₹ 20.61 lacs in the assessee’s bank account during the year, cannot be regarded as an evidence of ₹ 16 plus lacs cash with the family on 31.3.2005. The same, in fact, is without deducting ₹ 3 lac toward household expenses. Any adverse finding by the AO, needless to add, shall be preceded by due opportunity of hearing to the assessee and, further, per definite findings of fact (by the AO). The assessee shall cooperate in the matter lest the AO draw adverse inference as admissible under the circumstances. The AO shall complete the said verification in a time bound manner, being also required to observe the time limit u/s. 153 of the Act, as specified after 01.06.2016. - assessee’s appeal is partly allowed on the afore-said terms
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