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Late Sushil Modi Versus CIT., Central -II

2015 (4) TMI 835 - CALCUTTA HIGH COURT

Treatment of cash deposits - unexplained cash credit by invoking provisions of section 69 - Held that:- In the case before us, the assessee admittedly made an investment of a sum of ₹ 2,01,000/- which was not disclosed by him in the returns filed under Section 139. During search his explanation was that “the said deposits were made out of the cash balance available. In the absence of any proof with regard to such availability of funds, the assessing officer treated the aforesaid deposits a .....

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ce a copy thereof before us which may have tilted the balance in his favour. The fact that the assessee-appellant did not take any such step leaves no doubt in our mind that the submissions are not true. The investment discovered during the search and seizure has not been disputed on facts. Therefore, it was a clear case where Section 69 of the Income Tax Act would be applicable and this is what was done. - Decided against assessee. - ITA No. 52 of 2003 - Dated:- 1-4-2015 - Girish Chandra Gupta .....

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to 20.9.1996. The question, which the learned Advocate for the appellant has pressed before us, is Question No.(iii) which reads as follows:- (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in having upheld the treatment of cash deposits of ₹ 2,01,000/- in Canara Bank during assessment year 1987-88 as unexplained cash credit by invoking provisions of section 69 of the I.T. Act, 1961, inasmuch as the source of such deposits were duly considered i .....

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ssary enquiry was possible with the Bank where deposits were found and the Banks from which the amount were debited for credit to the assessee s account. Such enquiry was not even attempted. The conclusions are mostly on the basis of A.O. s statement that assessee was not able to explain. Such conclusion can indicate either absence of explanation or explanation given verified to be not tenable. However, such conclusion has to be based on result of specific post such enquiry and assessee s explan .....

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ly in order but calls for further enquiry as he is not only an adjudicating authority but an investigating authority as well. In this respect, an Assessing Officer is different from a Civil Court as held in the decision of Re: Gee Vce Enterprises -Vs- Addl. CIT (New Dehli) reported in (1975) 99 ITR 375. Lack of necessary enquiry makes an assessment order erroneous as held by the Hon'ble Supreme Court of India in Re: Malabar Industrial Corporation (2000) 243 ITK 83 (SC) . The learned Tribunal .....

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course of search. If the addition is based on some material found in the course of search, then the second question that arises for consideration is as to whether the provisions of Sec.69 are attracted in the case of block assessments and finally it is to be considered as to whether the assessee had satisfactorily explained the source of the deposits in the bank account and not whether the addition was justified in block assessment. In this case, the existence of Savings Bank Account No. 4790 w .....

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000/- was deposited on 7.4.1986 and the balance sum of ₹ 1000/- was deposited on 21.1.1987. This is also reflected in paragraph-15 of the impugned judgment. The deposit was admittedly made during the financial year 1986-87 corresponding to assessment year 1987-88. Before the learned Tribunal, the defence as regards the aforesaid sum of ₹ 2,01,000/- was that the deposit was made from out of the cash balance available with the assessee as would appear from paragraph-15 of the impugned .....

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ed the cash deposit in Canara Bank amounting to ₹ 2,00,000/- and ₹ 1000/- on 7.4.86 and 21.187 respectively as unexplained cash credit while the source of such deposit was duly considered in the final accounts of the appellant. Mr. Sen, learned Advocate for the appellant repeated that the aforesaid sum of ₹ 2,01,000/- was duly accounted for in the final accounts of the financial year 1986-87 corresponding to assessment year 1987-88, but the Assessing Officer did not take the tr .....

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on, nothing was easier for the assessee than to produce a copy thereof before us which may have tilted the balance in his favour. The fact that the assesseeappellant did not take any such step leaves no doubt in our mind that the submissions are not true. The investment discovered during the search and seizure has not been disputed on facts. Therefore, it was a clear case where Section 69 of the Income Tax Act would be applicable and this is what was done. In the written notes quoted above empha .....

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(b) That the order is prejudicial to the interest of the Revenue. An answer to the question whether the order is prejudicial to the interest of Revenue is dependent upon proper and requisite investigation by the assessing officer. The assessing officer cannot accept a claim made by the assessee without satisfying himself about the correctness thereof. For arriving at such satisfaction, he is empowered to make the necessary investigation. In the case before us, the assessee admittedly made an inv .....

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