TMI Blog2017 (12) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... e return of income in response to the notice issued u/s 148 of the Act. However, the assessee requested the AO consider the original return of income as return filed in response to the notice issued u/s 148 of the IT Act. Thereafter, the assesse did not appear before the Assessing Officer. Accordingly, when the assessee has chosen not to participate in the assessment proceedings then the AO was left with no option but to complete the assessment u/s 144 of the Act. Addition u/s 69A - Held that:- The payment made for the purchase of new house has gone from the bank account in which the cash was deposited. Even otherwise if the contention of the assessee is accepted that he has received part of sale consideration in cash then applying the same analogy the purchase consideration paid in cash for purchase of new house is also required to be explained by the assessee and at least in the same ratio the purchase consideration in cash has not been explained by the assessee. Thus, it is clear that cash consideration if any received by the assessee, the same has been paid for purchase of the new house and therefore, the source of cash deposit in the back account remained unexplained. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een disputed by the Revenue. Therefore, when the authorized representative of the assessee in his affidavit has accepted the bonafide mistake and oversight for not filing the appeal within the period of limitation despite the appeal was ready and fee was paid in time then it would be a reasonable cause for not presenting this appeal within the period of limitation. Having regards to the facts and circumstances of the case that the assessee took the requisite steps to file the appeal in time and also deposited the appeal fee I am satisfied that the assessee had a reasonable cause for not presenting the present appeal in time. Accordingly, the delay of 209 days in filing the present appeal is condoned. 4. The assessee has raised the following grounds:- 1. That the Learned CIT(A) erred in certainning the action for imitation of proceedings u/s 147 by A.O in order. 2. Whether on the facts and circumstances of the case the Learned CIT(A) was justified in confirming the assessment made u/s 144? 3. Whether on the facts and circumstances of the case the Learned CIT(A) was justified in confirming the addition of ₹ 2054500/- made by AO u/s 69A? 4. The Learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Hon ble High Court has held that existence of tangible material for the formation of opinion is pre-requite for initiation of action u/s 147 of the Act. There should be facts before the AO that reasonably give rise to the belief, but the facts on the basis of which he entertain the belief need not at this stage be tentative conclusion. The material before the AO must have rational connection or relevant bearing to the formation of the belief. The ld. AR has further submitted that the AO cannot make a fishing or rowing enquiry into the whole question as to how the income was generated chargeable to tax has escaped assessment. The reasons recorded for reopening of assessment did not make out of a case that the assessee was engaged in some business and income from such business has not been returned by the assessee which represents the cash deposits in the bank account. The Source of deposits need not necessarily be income of the assessee, therefore, the reassessment proceedings cannot be resorted with a purpose to examine the facts unless there was a reason to belief rather than suspect that income has escaped assessment. The ld. AR has relied upon the following decisions:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has also not filed the return of income in response to the notice issued u/s 148 of the Act. However, the assessee requested the AO consider the original return of income as return filed in response to the notice issued u/s 148 of the IT Act. Thereafter, the assesse did not appear before the Assessing Officer. Accordingly, when the assessee has chosen not to participate in the assessment proceedings then the AO was left with no option but to complete the assessment u/s 144 of the Act. The ld. CIT(A) while considering this issue has taken note of the fact that the AO issued notices to the assessee and fixed the hearing, but the assessee did not appear either in person or through representative. Even no adjournment request was filed before the Assessing officer. Accordingly, in the absence of any contrary fact brought before the Tribunal I do not find any reason to interfere with the orders of the authorities below qua this issue. 10. Ground no. 3 is regarding the addition of ₹ 20,54,500/- made u/s 69A of the I.T. Act. 11. I have heard the ld. AR as well as ld. DR and considered the relevant material on record. The assessee has not disputed the fact of depositing of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record. Undisputedly the assessment was completed ex-parte u/s 144 r.w.s. 147 of the Income Tax Act. It is apparent that the assessee did not disclose the transaction of sale of house and the AO completed the assessment by making the addition on account of cash deposit in the bank account of the assessee. Before the ld. CIT(A) the assessee claimed the benefit of section 54 on account of investment made in purchase of new house. The ld. CIT(A) denied the claim of the assessee on the ground that the new house was purchase in the name of his wife. At the same time, the ld. CIT(A) has observed that the entire sale consideration will be assessed as capital gain. 14. The ld. CIT(A) has denied the claim of deduction u/s 54 by following decision of Hon ble Jurisdiction High Court in case of kalya vs CIT (2012) 22 taxman.com 67 (Raj). However, the Hon ble jurisdiction High Court in the latest decision dated 07.11.2017 in case of Laxmi Narayan vs. CIT in ITA No. 20/2016,118/2017 136/2017 after consideration all the decisions on this point including the decision in case of kalya vs CIT (supra) has held in para 7.2 and 7.3 as under:- 7.2 On the ground of investment made by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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