TMI Blog2019 (4) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... whole of deposits cannot be regarded as income and therefore the assumption of jurisdiction is vitiated under law is not correct. To our mind, so long as there is an element of income which has escaped taxation and which exceeds the maximum amount which is not chargeable to tax, the same is sufficient enough to uphold the jurisdiction so invoked by the AO u/s 147 of the Act. Addition treating cash deposits in his saving bank account as unexplained and taxable u/s 69 - HELD THAT:- We find that out of deposits of ₹ 23,45,000, deposits to the extent of ₹ 11 lacs has been found explained as made out of withdrawals in the month of March 2008. Regarding the remaining amount found deposited, we find that the Revenue has accepted the turnover of the assessee from his business of supply of building material to the tune of ₹ 26,04,540, therefore, the source of deposits to the extent of ₹ 12,45,000 found deposited in the bank account can reasonably be held from such business and thus stand duly explained. Regarding the cheque withdrawals/payments made by the assessee to the tune of ₹ 14,46,384, we find that there is an equivalent amount of cheque deposits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee and income to the extent of ₹ 23,43,500 has escaped assessment. In response to the notice issued u/s 148, the assessee filed his return of income declaring total income of ₹ 1,43,790/- which includes ₹ 1,34,540/- as business income u/s 44AF of the Act. The Assessing Officer after given the benefit of ₹ 11,00,000/- shown as withdrawals in the previous financial year has brought to tax the balance amount of cash deposits of ₹ 12,45,000/- as unexplained income u/s 69 of the Act. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the findings of the Assessing Officer. Now, the assessee is now in appeal before us. 3. Ground No. 1 was not pressed during the course of hearing. Hence, the same is dismissed as not pressed. 4. In Ground No. 2, the assessee has challenged the initiation of proceedings u/s 147 of the Act. During the course of hearing, the ld. AR submitted that from the perusal of reasons recorded by the Assessing Officer before issuance of notice u/s 148, it can be noted that the case of the assessee was reopened due to cash deposition of ₹ 23,43,500/- in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are in nature of income which has escaped taxation. It was submitted that such prima facie belief is sufficient enough for the Assessing officer to assume jurisdiction u/s 147 where the assessee has not filed his return of income. It was accordingly submitted that there is no basis for challenging the initiation of proceedings u/s 147 as contended by the ld. AR. 6. Heard both the parties and perused the material available on record. We find that it is a case where return of income has not been filed by the assessee and pursuant to notice u/s 148, he has filed his return of income. Prior to such notice u/s 148, there is no past history of the assessee where he has filed any return of income wherein he has disclosed the savings bank account. For the first time, the matter was opened for the reason that there are cash deposits worth ₹ 23,43,500 in his saving bank account which have escaped taxation. It is therefore a case of assessment and not reassessment and for the purposes of assumption of jurisdiction u/s 147, what is required is that the Assessing officer should have reasons to believe any income chargeable to tax has escaped assessment. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the case of the assessee. In the result, ground of appeal is dismissed. 7. Now coming to Ground Nos. 3 and 4 wherein the assessee has effectively challenged the addition of ₹ 12.45 lacs on merits by treating cash deposits in his saving bank account as unexplained and taxable u/s 69 of the Act. 8. During the course of hearing, the ld. AR submitted that out of cash deposits of ₹ 23,45,000/- during the year under consideration, an amount of ₹ 11 lacs have been considered as available out of cash withdrawals in March, 2008 and the remaining amount of ₹ 12,45,000/- have been brought to tax as unexplained income in the hands of the assessee. It was submitted that undisputed facts are that during the year under consideration, there were cash withdrawal of ₹ 23,59,881/- which have not been denied and evident from the bank statement and same has been included in cash flow statement so submitted by the assessee. The cash flow statement from bank is a factual statement and not under any doubt. Out of said withdrawal of ₹ 23,59,881/-, it was submitted that alleged unexplained amount of ₹ 12.45 lacs have been deposited. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be accepted as the basis to treat the deposits as explained. Under the circumstances the theory of reintroduction of the cash again as the explanation to reduce the unexplained amount cannot be accepted and therefore, the addition of ₹ 12,45,000/- being unexplained income should be confirmed. 10. Heard both the parties and perused the material available on record. We find that out of deposits of ₹ 23,45,000, deposits to the extent of ₹ 11 lacs has been found explained as made out of withdrawals in the month of March 2008. Regarding the remaining amount found deposited, we find that the Revenue has accepted the turnover of the assessee from his business of supply of building material to the tune of ₹ 26,04,540, therefore, the source of deposits to the extent of ₹ 12,45,000 found deposited in the bank account can reasonably be held from such business and thus stand duly explained. Regarding the cheque withdrawals/payments made by the assessee to the tune of ₹ 14,46,384, we find that there is an equivalent amount of cheque deposits to the tune of ₹ 14,60,241 in the bank account which again reasonably ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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