TMI Blog2019 (4) TMI 1649X X X X Extracts X X X X X X X X Extracts X X X X ..... - DELHI HIGH COURT] the re-assessment proceedings were not valid and were liable to be quashed. Viewed from any angle, the addition made by the A.O. and sustained by the CIT(A) was not justified - Decided in favour of assessee. - ITA No.481/Chd/2018 - - - Dated:- 24-4-2019 - Shri N.K. Saini, Vice President For the Assessee : S/Shri Sudhir Sehgal, adv. And Ashok Goyal, CA For the Revenue : Shri Manjit Singh, Sr.DR ORDER This appeal filed by the assessee is directed against the order dated 19.2.2018 of the Commissioner of Income Tax (Appeals)-2, Ludhiana (in short CIT(A)). 2. The assessee has raised following grounds: 1. That the order under appeal is excessive, unjust, contrary to facts and is against law. 2. That initiation of proceedings under Section 147 and issuance of notice under Section 148 of the Income Tax Act, 1961 by the Income Tax Officer, Ward-5, Khanna is bad of law and without jurisdiction as the appellants was having its jurisdiction with Income Tax Officer Ward-1(2) Rampur (U.P) and the jurisdictions was got transferred to Khanna without a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur parts. 4. Vide ground No.3, the assessee has challenged the jurisdictional of the A.O. for reopening of assessment u/s 147 of the Income Tax Act, 1961 (in short the Act ) by issuing the notice u/s 148 of the Act vide ground Nos.4 and 5, the assessee has challenged the sustenance of addition of ₹ 17,25,135/-, which was the opening cash in hand. 5. The facts of the case, in brief, are that the A.O. received AIR Information that the assessee had deposited/made investment of ₹ 1,06,29,400/- in his saving bank account maintained with Oriental Bank of Commerce, Doraha on various dates. On the basis of information, the A.O. reopened the case u/s 148 of the Act after recording the reasons u/s 147 of the Act. In response, the assessee filed return of income on 9.5.2016 declaring an income of ₹ 1,44,270/-. The A.O. during the course of assessment proceedings, asked the assessee to furnish documentary evidence and source with respect to cash deposited in Oriental Bank of Commerce, Doraha amounting to ₹ 1,06,29,400/-. In response, the assessee furnished cash flow statement as under: Also cash flow statement submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Also as per balance sheet as on 31.03.2008 the assessee has shown cash in hand of ₹ 17,25,135/- on the asset side. 7. The A.O. after considering the submissions of the assessee observed that the assessee had shown net profit of ₹ 75,135/- for the year ending on 31.3.2008 i.e. the preceding year, while the cash in hand was of ₹ 17,25,135/-. He made the addition of the opening cash in hand of ₹ 17,25,135/- in the hands of the assessee. 8. Being aggrieved, the assessee carried the matter to the CIT(A) and challenged the jurisdiction for reopening by the A.O. and submitted that the assessee produced the books of account alongwith vouchers, sale and purchase bills before the A.O. and also explained the cash deposited amounting to ₹ 1,06,29,400/- in saving bank account and that the A.O. was fully satisfied in regard to the sources and deposits of cash in the saving bank account. The Ld.CIT(A), however, was not satisfied from the reply of the assessee and sustained the action of the A.O. in reopening the assessment while observing as under: 5.2 I have considered the observations of the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee furnished the explanation of the opening balance with evidences, the said amount was the closing balance as on 31.3.2008, relating to the preceding year relevant to the assessment year 2008-09, so there was no reason to treat the same as unexplained for the year under consideration. It was also submitted that the A.O. at the most could have examined the availability of cash balance as on 1.4.2008 from the Balance Sheet as on 31.3.2008 instead of adding the opening balance of cash as unexplained. The reliance was placed on the following cash laws: 1. ACIT Vs. N. Sasikala (2006) 151 TaxmanITAT 42 43 (I.T.A.T. Chennai Bench A ). 2. CIT Vs. Usha Stud Agricultural Farms Ltd.(2009) 183 Taxman 277. 3. Dy.CIT, Central Circle-1, Kanpur Vs. Shri Satish Chandra Pandey, ITA No No.525/LKW/2010. 4. DCIT, CC-3, Hyderabad Vs. R.A. Alagar Raja, Bengaluru, ITA No.1139/Hyd/2013 5. Assistant Commissioner of Income Tax Vs. Smt.N.Sasikala, ITA No.435/Mds/1997 reported in (2005) 92 TTJ 1196. 6. Dy. Commissioner of Income Tax, Central Circle-4, Hyderabad Vs. Shri Madhusudan Sonthalia, Hyderabad, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y evidence, the opening cash in hand shown by the assessee cannot be said to be explained. In other words, the cash deposits in the bank account of the assessee to the extent of opening cash in hand which were explained by the assessee with opening cash in hand cannot be said to be explained. However, I am of the opinion that the Assessing Officer should have made the addition under section 69A of the Act instead of section 68. The mistake of the Assessing Officer is corrected accordingly. The judicial pronouncements relied upon by the learned AR of the assessee have altogether distinguishable facts from the facts of the case of the assessee and has no application in his case. Under such circumstances, the action of the Assessing Officer in making an addition of ₹ 17,25,135/- in this case on account of unexplained cash deposits in the bank account of the assessee maintained by him with OBC, Doraha cannot be said to be unjustified. Having said so, the addition of ₹ 17,25,135/- made by the Assessing Officer in this case on account of unexplained cash deposits in the bank account of the assessee maintained by him with OBC, Doraha is, therefore, upheld. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh in hand for the year under consideration. In that view of the matter, the addition made by the A.O. and sustained by the Ld.CIT(A) deserves to be deleted. Moreover, the assessment was reopened by the A.O. on the basis of the information received from Investigation Wing. 14. On a similar issue, the Hon'ble Delhi High Court in the case of Signature Hotels Pvt. Ltd. Vs. I.T.O. Another (supra) held as under: that the reassessment proceedings were initiated on the basis of information received from the Director of Income-tax (Investigation) that the petitioner had introduced money amounting to ₹ 5 lakhs during financial year 2002-03 as stated in the annexure. According to the information, the amount received from a company, S, was nothing but an accommodation entry and the assessee was the beneficiary. The reasons did not satisfy the requirements of section 147 of the Act. There was no reference to any document or statement, except the annexure. The annexure could not be regarded as a material or evidence that prima facie showed or established nexus or link which disclosed escapement of income. The annexure was not a pointer and did not ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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