TMI Blog2017 (1) TMI 1496X X X X Extracts X X X X X X X X Extracts X X X X ..... Muzaffarnagar dated 28.3.2016 pertaining to the A.Y. 2009-10. 2. Facts:- The assessee is an individual and is admittedly an agriculturist having no other source of income. There were certain deposits made in the assessee s bank account. On receipt of AIR information the Assessing Officer (A.O.) recorded reasons that income which is subjected to tax has escaped assessment and issued notice of reopening under section 148 of the Income Tax Act, 1961 (the Act). Thereafter, an order was passed under section 144 of the Act by the Assessing Officer on 27.3.2015 making an addition of ₹ 9,15,000/- u/s 69 of the Act. The assessee carried the matter in appeal. Before the first appellate authority he submitted that he is an agriculturist and does not have any other income. It was submitted that the ancestral agricultural land was sold to one Mr. Haji Mohd. Momin S/o Mr.Shokat Ali at ₹ 7 lakhs per biga and thereafter on behalf of Mr.Haji Mohd. Momin, the agreement holder, the land was sold in favour of Mr Giriraj Kishore, S/o Shri Shivcharan Lal. In other words it was contended that the amount in question is nothing but sale proceeds of ancestral agricultural land. The Ld.CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, I have reasons to believe that income chargeable to tax amounting to ₹ 6.00.000/- for the F.Y. 2005-06 relevant to A.Y. 2006-07 has escaped assessment and it is a fit case for initiation of proceedings u/s 147 of the Act. Proposal in the prescribed form for the A.Y. 2006-07 (F.Y. 2005-06) is submitted herewith for kind consideration and necessary approval u/s 151(2) of the I.Tax Act,1961 as the same is getting barred by limitation on 31/3/2013. If approved, notice u/s 148 of the act may be issued. 9. As it is manifest from the reasons recorded by the AO that the AO proposed to reopen the assessment by issuing notice u/s 148 on the basis of information received that the assessee deposit cash amount of ₹ 6 lac in the bank account. The AO has recorded in the reasons that the assessee has not filed return of income for the Assessment Year 2006-07. This fact recorded by the AO that the assessee has not filed the return of income for the Assessment Year under consideration has turned out to be incorrect as the assessment order begins with the narration of fact that manual return declared ₹ 112030/- filed on 31.03.2007. Thus at the time of pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee and therefore merely deposit of cash in bank itself would not lead to the conclusion or believe that the said amount is assessable income of the assessee and escapement of assessment. In the case in hand there are number of withdrawals and deposits in the bank account of the assessee in question. It is clear from the details of the bank account that prior to the deposit of this amount of ₹ 6 lac there was withdrawals of about ₹ 14 lac from the said bank account, therefore in the absence of any other information or material to indicate the source of this deposit other than withdrawals from the bank account the AO was not having any tangible material to believe that this deposit of ₹ 6 lac constitute the income of the assessee for which the source has not been disclosed by the assessee or the assessee is not in a position to disclose the source. Accordingly the reopening is nothing but to investigate the matter to ascertain whether this deposit would constitute the income of the assessee which has escaped the assessment or not. In the case of the C.M. Mahadeva Vs. CIT, Hon'ble Karnataka High Court while dealing with identical facts of reope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal held as follows. 11. We have heard both the parties and perused the relevant records available with us, especially the orders of the revenue authorities and the case laws cited by the assessee s counsel on the issue in dispute. In our view, it is very much necessary to reproduce the reasons recorded by the AO before issue of notice u/s. 148 for reopening of assessment which reads as under:- As per AIR information for FY 2006-07 received in this office, the assessee has made cash deposits of ₹ 49,42,000/- in bank account with Canara Bank, Pulhawas, Rewari. A query notice was issued to the assessee on 24.1.2012. But no response has been received from the assessee. I, therefore have reason to believe that the assesse has deposited cash in his bank account out of his income from unexplained sources. Accordingly, income to the extent of ₹ 49,42,000/- and any other income which subsequently comes to the notice of the undersigned has escaped assessment within the meaning of section 147 of the I.T. Act, 1961. Issue notice u/s. 148 of the I.T. Act, 1961 for the assessment year 2007-08. Sd/- (O.P. Poonia) Income Tax Officer, Ward- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngh Sijawali (Supra) has been followed in this case. 44. It is this question which takes us back to the applicability/nonapplicability of the decision in Bir Bahadur Singh Sijwali (supra). The ratio thereof has not at all been disputed by the Department. In fact, the only dispute which has been raked up is the applicability or otherwise thereof to the facts of the present case, in view of the position that the initiation of the assessment proceedings U/S 147 in the present case stands preceded by the issuance of the alleged enquiry letter by the ITO. This dispute has been dealt with in detail in the foregoing paragraphs. 45. In 'Bir Bahadur Singh Sijwali' (supra), it has been held that where the AO issued a notice U/S 148 on the ground that there was, fin escapement of income and the belief regarding such escapement of income was formed on the fallacious assumption of the AO that bank deposits constituted undisclosed income, over-looking the fact that the source of the deposits need not necessarily be the income of the assessee, the reassessment proceedings cannot be sustained. In the present case, similarly, the basis of initiation of the assessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... light of this legal position, revert to the facts of the case before us. All that the reasons recorded for reopening indicate is that cash deposits aggregating to Rs.l0,24,100/- have been made in the bank account of the assessee, but the mere fact that these deposits have been made in a bank account does not indicate that these deposits constitute an income which has escaped assessment. The reasons recorded for reopening the assessment do not make out a case that the assessee was engaged in some business and the income from such a business has not been returned by the assessee. As we do not have the liberty to examine these reasons on the basis of any other material or fact, other than the facts set out in the reasons so recorded, it is not open to us to deal with the question as to whether the assessee could be said to be engaged in any business; all that is to be examined is whether the fact of the deposits, per se, in the bank account of the assessee could be basis of holding the view that the income has escaped assessment. The answer, in our humble understanding, is in negative. The Assessing Officer has opined that an income of Rs.l 0,24, 1 00/- has escaped assessment of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons recorded to initiate assessment proceedings under section 147 of the Act and all proceedings pursuant thereto, culminating in the impugned order, are cancelled. Ground No.2 is, accordingly, accepted. C. Apex Court judgment in the case of Parimisetti Setharamamma vs. CIT reported in 57 ITR 532 has held as under:- By sections 3 and 4 the Act imposes a general liability to tax upon all income. But the Act does not provide that whatever is received by a person must be regarded as income liable to tax. In all cases in which a receipt is sought to be taxed as income, the burden lies upon the department to prove that it is within the taxing provision. Where however a receipt is of the nature of income, the burden of proving that it is not taxable because it falls within an exemption provided by the Act lies upon the assessee. The appellant admitted that she had received jewellery and diverse sums of money from Sita Devi and she claimed that these were gifts made out of love and affection. The case of the appellant was that the receipts did not fall within the taxing provision: it was not her case that being income the receipts were exempt from taxation because of a sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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