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2015 (7) TMI 206 - ITAT BANGALORE

2015 (7) TMI 206 - ITAT BANGALORE - TMI - Reopening of assessment - validity of the notices issued under Section 148 challenged - whether the Assessing Officer can invoke the provisions of section 150(1) of the Act to assume jurisdiction under Section 147 of the Act? - unexplained investment - Held that:- CIT (Appeals) has given a clear finding that the unexplained investment in the residential property fall in three years relevant to Assessment Years 2003-04 to 2005-06. The learned CIT (Appeals .....

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ndered a clear ‘finding’ in the matter and that, therefore, in the facts and circumstances of the case on hand, the Assessing Officer has correctly assumed jurisdiction under Section 147 of the Act by invoking the provisions of section 150(1) of the Act. - Decided against assessee.

As regards the additions made by the Assessing Officer towards unexplained investment of ₹ 1,15,710 for Assessment Year 2003-04 and of ₹ 5,13,517 for Assessment Year 2004-05, it is seen that the .....

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view of the above factual matrix of the case, we concur with the learned CIT (Appeals) in upholding the additions made by the Assessing Officer in this regard. - Decided against assessee.

Interest under Sections 234A, 234B and 234C is consequential and mandatory and the Assessing Officer has no discretion in the matter. This proposition has been upheld by the Hon'ble Apex Court in the case of Anjum H Ghaswala (2001 (10) TMI 4 - SUPREME Court) and we, therefore, uphold the action of t .....

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05. As the issues involved and the grounds of appeal raised in both appeals are identical, both the appeals are heard and disposed off by way of this common order. 2. The facts of the case, briefly, are as under :- 2.1 In the course of survey action under Section 133A of the Income Tax Act, 1961 (in short 'the Act') at the assessee's premises, it came to the knowledge of the Assessing Officer that the assessee had constructed a residential house at Somwarpet and that the investment i .....

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77; 15,52,707, the Assessing Officer made an addition of ₹ 48,42,501 being the balance unexplained portion of the investment in the order of assessment for Assessment Year 2005-06 passed under Section 143(3) rws 147 of the Act vide order dt.30.12.2008. 2.2 Aggrieved by the order of assessment for Assessment Year 2005-06 dt.30.12.2008, the assessee carried the matter in appeal before the CIT (Appeals), Mysore. The learned CIT (Appeals) disposed the assessee's appeal vide order dt.16.3.2 .....

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ment Years 2003-04 to 2005-06. In this view of the matter, the learned CIT (Appeals) confirmed the addition of ₹ 12,15,417 in Assessment Year 2005-06 and observed that the Assessing Officer is at liberty to take necessary steps to tax the remaining unexplained investment in the other two years. 2.3 In compliance with the above observations of the learned CIT (Appeals), the Assessing Officer re-opened the assessment proceedings for Assessment Years 2003-04 and 2004-05 under Section 147 of t .....

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t. Those orders of assessment for Assessment Years 2003-04 and 2004-05 were completed under Section 147 rws 150 of the Act vide orders dt.11.2.2013. 3. Aggrieved by the orders of assessment for Assessment Years 2003-04 and 2004- 05 dt.11.2.2013, the assessee preferred appeals before the CIT (Appeals), Mysore. In these appeals, the assessee, inter alia, challenged the issue of notices under Section 148 of the Act and the assumption of jurisdiction by the Assessing Officer under Section 147 of the .....

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Appeals), Mysore dt.27.8.2013 for Assessment Years 2003-04 and 2004-05, the assessee has preferred these appeals before this Tribunal, raising the following grounds which are identical except for ground No.6 for Assessment Year 2003-04 where the assessee challenges the action of the Assessing Officer in treating the claim of agricultural income of ₹ 1,38,500 as not acceptable and taxing the same as unexplained income. The assessee has raised the following grounds of appeal for A.Y. 2003-04 .....

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der of assessment made under Section 147 rws 150 of the Income Tax Act holding that the provisions of Section 150(1) are clearly attracted. 4. The impugned order of assessment made under Section 147 rws 150 of the Income Tax Act is illegal and void in so far as the same is made by the Assessing Officer without assuming jurisdiction under Section 147 of the Act. 5. That the impugned proceedings under Section 147is barred by limitation and as such the impugned assessment order is liable to be annu .....

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impugned order is liable to set aside. 8. That the impugned levy of interest of ₹ 68,544 under Section 234A is liable to set aside in so far as the appellant is not liable there for and the same is opposed to the provisions contained therein. 9. That the impugned levy of interest of ₹ 71,232 under Section 234B is liable to set aside in so far as the appellant is not liable there for and the same is opposed to the provisions contained therein. 10. That the impugned levy of interest of .....

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submitted by the assessee. 5. Grounds at S. Nos. 1 to 5 - Assumption of jurisdiction. 5.1 In these grounds, the assessee has challenged the Assessing Officer s assumption of jurisdiction under Section 147 of the Act and the validity of the notices issued under Section 148 of the Act. This issue revolves on whether the Assessing Officer can invoke the provisions of section 150(1) of the Act to assume jurisdiction under Section 147 of the Act. Section 150(1) of the Act empowers the Assessing Offi .....

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s contention, the assessee placed reliance on the following judicial pronouncements :- (i) Southern India Plywood Company V ACIT in ITA No.722/Bang/2010 dt.29.6.2012. (ii) Rajinder Nath V CIT in 120 ITR 14 (SC). (iii)Consolidated Coffee Ltd. V ITO 155 ITR 729 (Kar). The learned CIT (Appeals), however, has distinguished the facts of the assessee's case with the findings made by the co-ordinate bench of this Tribunal in the above cited cases and confirmed the actions of the Assessing Officer. .....

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nue has the option to take or not to take action. It is, therefore, clear that by using the words it is open for the revenue the High Court has not given any direction to the revenue to take action. The Hon'ble Apex Court has stated that A Direction by a statutory authority is in the nature of an order requiring positive compliance. What is left to the option and direction of the ITO whether or not to take action, it cannot in our opinion, be described as a direction. …… The co .....

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he learned CIT (Appeals) in his order for Assessment Year 2005-06 dt.16.3.2011 has held that the unexplained investment in the property has been made over three years and observed that …. The A.O. is at liberty to take necessary steps to tax the remaining unexplained investment in other two years. The issue before us is whether this constitutes a direction and / or finding as contemplated in the provisions of Section 150(1) of the Act. 5.3.3 On a perusal of the order of the CIT (Appeals) .....

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said residential property in the period prior to Assessment Year 2003-04. ii. The approval letter from the local municipal authorities obtained to construct the building between 11/2011 to 03/2005. iii. In such circumstances, I think it fit to spread over the total investments equally in different years. iv. The appellant submissions were that she withdrawn an amount of ₹ 9,12,707 for the property in the F.Y. 2002-03 and further ₹ 5,00,000 during F.Y. 2003-04. v. The total investmen .....

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nder appeal. The A.O. is at liberty to take necessary steps to tax the remaining unexplained investment in the other two years. 5.3.4 From the above, in our view, it is evident that the learned CIT (Appeals) has given a clear finding that the unexplained investment in the residential property fall in three years relevant to Assessment Years 2003-04 to 2005-06. The learned CIT (Appeals) has also rendered a finding that the addition to be made on account of unexplained investment in the said prope .....

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the Assessing Officer has correctly assumed jurisdiction under Section 147 of the Act by invoking the provisions of section 150(1) of the Act. Consequently the grounds raised at S.Nos.1 to 5 for both assessment years 2003-04 and 2004-05 are dismissed. Ground Nos.6 & 7 6. Substantitve Additions - On Merits. 6.1 As far as the unexplained investment in construction of the property is concerned, the learned CIT (Appeals) had rendered a categorical finding that the investment is spread over the .....

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er were unsubstantiated, were added back. 7.1 For Assessment Year 2003-04, the Assessing Officer accepted an amount of ₹ 9,12,707 claimed as drawn from the HUF and an amount of ₹ 48,500 claimed as income from other sources shown in the return of income for Assessment Year 2003-04. The Assessing Officer, however, added the amount of ₹ 1,38,500 claimed as agricultural income and amount of ₹ 1,15,710 which was unexplained. 7.2 The assessee's claim of agricultural income .....

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ngs of the Assessing Officer either in the first appellate proceedings before the learned CIT (Appeals) or in the proceedings before us. Therefore, in the absence of any evidence being put forth to controvert the findings of the Assessing Officer on this issue, we uphold the decision of the learned CIT (Appeals) in rejecting the claims of the assessee and confirming the addition made by the Assessing Officer. Consequently, Ground NO.6 for Assessment Year 2003-04 is dismissed. 8. As regards the a .....

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