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Farukbhai Mohammed Mahida Versus Income Tax Officer Ward 2 (2) (5)

2015 (12) TMI 982 - GUJARAT HIGH COURT

Reopening of assessment - undisclosed cash deposit - Held that:- When the bank account was not only disclosed by the petitioner at the outset along with return but was also noticed by the Assessing Officer during scrutiny, the main foundation of the allegation of the cash deposit having escaped to the notice of the Assessing Officer of the bank account not having been disclosed, stands falsified. The question of application of Explanation-1 to Section 147 of the of the Act would simply not arise .....

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eging that the assessee did not disclose fully and truly all material facts.

Coming to the second element of the reasons for reopening the assessment, the petitioner pointed out to the Assessing Officer in objections raised to the reopening of assessment that he never owned or operated any bank account in Kotak Mahindra Bank as alleged. He would presume that reference to cash deposit of ₹ 14,67,075/- was to the loan sanctioned and disbursed by the said bank for purchase of car. .....

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o suggest that the petitioner's frontal assertion that he did not have any bank account in Kotak Mahindra Bank nor did he make any cash deposit in the said bank account as alleged, is false. In fact, the petitioner reconciled the said amount of ₹ 14,67,075/- by pointing out that this was exactly the same amount which the Kotak Mahindra Bank released by way of car loan, which was, in fact, paid over directly to the dealer. - Decided in favour of assessee - Special Civil Application No. 1195 .....

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individual and is engaged in the business of repairing of motorcars. For the Assessment Year 2008-09, the petitioner filed return of income disclosing total income of ₹ 4.62 lacs (rounded off). Such return was taken in scrutiny. The Assessing Officer framed scrutiny assessment, assessing total income of the assessee at ₹ 5.39 lacs (rounded off). The Assessing Officer later on issued impugned notice seeking to reopen such assessment for which he had recorded following reasons:- " .....

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to ₹ 25,39,075/- during the year under consideration. On verification of balance sheet and assessment records it is found that the assessee has not disclosed the above bank accounts therefore the cash deposits in the above accounts has escaped the assessment. 2. In view of the above facts and material on record, I have reason to believe that an amount of ₹ 25,39,075/- has escaped assessment within the meaning of section 147 of the IT Act. I am satisfied that the case of the assessee .....

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ond a period of four years from the end of relevant Assessment Year. The petitioner had not been guilty of non-disclosure of true and correct facts necessary for assessment. The Assessing Officer, therefore, committed a serious error in issuing the impugned notice. 3.1 Our attention was drawn to the reasons recorded for issuing the impugned notice in which it has been stated that there were cash deposits by the petitioner in two bank accounts maintained by him, viz. in the Bank of India and Kota .....

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ought further information about the bank account of the petitioner, which was duly supplied. With respect to the Kotak Mahindra Bank, Counsel pointed out that the petitioner had no such account in the said bank. Amount of ₹ 14.66,075/- was disbursed by the said bank by way of car loan and was directly paid to the dealer. There was, therefore, no question of disclosing any such bank account during the assessment. These aspects were brought to the notice of the Assessing Officer in the objec .....

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ia was disclosed, according to the Counsel, the case would fall under Explanation-1 to Section 147 of the Income Tax Act, 1961. 5. We are examining the case of reopening of assessment, where the original assessment was completed after scrutiny and the notice for reopening has been issued beyond a period of four years from the end of relevant Assessment Year. The important condition to be satisfied in such case therefore would of the assessee having failed to disclose truly and fully all material .....

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y the assessee. He was emphatic that on verification of balance sheet and assessment records, it is found that the assessee had not disclosed the said bank accounts and therefore, the cash deposits in the said accounts escaped assessment. 6. With respect to Current Account No.8109 of Bank of India, this ground is wholly baseless. The petitioner had filed audited accounts along with return, which itself disclosed that the petitioner operated the said bank account. If this much was not enough, the .....

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ct of the reconciliation." 7. In response to this query, the petitioner replied as under:- "4. Details of bank account maintained during the year is as under:- Sr. No. Bank Name Account type and Number Balance as per Books of Account as on 31.03.2008 Balance as per Bank statement as on 31.03.2008 Reconciliation if any. 1 Bank of India Kamrej Br.Surat. Current A/c-8109 122441-00 122441-00 Nil 2 Bank of India Kamrej Br.Surat. Current A/c-285 51638-00 51638-00 Nil 3 The Varachha Co.Op.Ban .....

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en this bank account was not only disclosed by the petitioner at the outset along with return but was also noticed by the Assessing Officer during scrutiny, the main foundation of the allegation of the cash deposit having escaped to the notice of the Assessing Officer of the bank account not having been disclosed, stands falsified. The question of application of Explanation-1 to Section 147 of the of the Act would simply not arise. Even otherwise, it would appear that the petitioner gave full de .....

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ial facts. 9. Coming to the second element of the reasons for reopening the assessment, the petitioner pointed out to the Assessing Officer in objections raised to the reopening of assessment that he never owned or operated any bank account in Kotak Mahindra Bank as alleged. He would presume that reference to cash deposit of ₹ 14,67,075/- was to the loan sanctioned and disbursed by the said bank for purchase of car. These objections, however, met with a total silence by the Assessing Offic .....

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