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2022 (4) TMI 1178 - AT - Income TaxReopening of assessment u/s 147 - Whether case being reopened as being without jurisdiction? - receipt of information from AIR that assessee had received cash deposits in saving bank account maintained with Corporation Bank - HELD THAT:- The assessee had not filed return of income for the captioned year. Not only this, the subsequent conduct of the assessee during the assessment also points to total non-cooperation on his part and in absence of any explanation forthcoming from the assessee, Assessing Officer was forced to pass ex-parte assessment order treating the above sum as undisclosed income of the assessee. In our view, since the assessee had not filed return of income for the captioned year and there was a huge cash deposit in his saving bank account, and further, when the assessee was called upon to provide an explanation in respect of this deposit, he did not comply, this itself leads to an reasonable doubt regarding the source of such deposits especially when return of income has not been filed. As in the case of Smt. Uma Mandal [2021 (4) TMI 904 - ITAT JAIPUR] ITAT held that where Assessing Officer issued a reopening notice against assessee on ground that an information was received that assessee had deposited certain amount in cash in her bank account but did not file return of income, since Assessing Officer reopened assessment after recording due reasons and after following due process and such information available before Assessing Officer was relevant and afforded a nexus to formation of prima facie belief that income chargeable to tax had escaped assessment in hands of assessee, impugned reopening notice was justified. Therefore, in our considered view, looking into the totality of facts in the case, the Ld. Assessing Officer is justified in re-opening the assessment in the instant set of facts. The process of re-opening was initiated after affording due opportunity to the assessee to give explanation regarding source of deposit. It is only when the assessee failed to comply / co-operate that case was re-opened u/s 148 of the Act, after following due process of law. - Decided against assessee. Addition as cash credit in the hands of the assessee - As the assessee has been able to establish the source of cash deposit. The Revenue has not brought anything on record that the lenders were not in existence (the Aadhar cards of lenders have been placed on record) or that they did not have agricultural land capable of earning agricultural income and neither the confirmations filed by lenders were challenged as being fallacious. The assessee has thus discharged the initial burden cast upon him u/s 68 of the Act. It is a well settled that under the law the assessee can be asked to prove source of credit but not the source of the source as held by various Courts including the jurisdictional High Court in the case of Rohini Builders [2001 (3) TMI 9 - GUJARAT HIGH COURT] - In view of the above discussion and the facts of the present case, in our view, the Ld. CIT(Appeals) has erred in facts and in law in sustaining addition u/s 68 of the Act in respect of cash deposits in the hands of the assessee. - Decided in favour of assessee. Addition u/s 56 for income from other sources - Once having held that when source of deposits has been duly explained by the assessee (refer Ground No. 3 above), the additions cannot be taxed as ‘Income from Other Sources’ in the hands of the assessee. Addition of Interest income - The assessee has been maintaining account with Corporation Bank. Once, the source of deposits in the bank has been duly explained and held as not taxable in the hands of the assessee, the interest amount of ₹ 2,052/-, since it falls below the taxable limit on standalone basis, is not liable for tax in the hands of the assessee. Assessee appeal allowed partly.
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