TMI Blog2020 (2) TMI 1280X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to go through records produced by assesses and to point out specific defects /escarpment of income leading to culmination of income which had escaped assessment and which needed to be brought to tax in the hands of the assessee instead of making generalized comments - Appeals filed by assessee are allowed for statistical purposes. - ITA Nos. 2921 And 2922/Chny/2018 - - - Dated:- 27-2-2020 - Shri N.R.S. Ganesan, Judicial Member And Shri Ramit Kochar, Accountant Member For the Appellant : Mr.N. Viswanathan, Adv. For the Respondent : Mr.A.R.V.Sreenivasan, JCIT ORDER PER RAMIT KOCHAR, ACCOUNTANT MEMBER: These two appeals filed by assessee are directed against two separate appellate order(s) both dated 21.08.2018 passed by learned Commissioner of Income Tax (Appeals)-13 , Chennai (hereinafter called the CIT(A) ), in ITA No. 145/CIT(A)-13/AY2012-13 and ITA No. 145/CIT(A)-13/AY2012-13 for assessment year s (ay s) 2012-13 and 2011-12 respectively , the appellate proceedings before learned CIT(A) had arisen from two separate assessment orders both dated 10.03.2016 passed by learned Assessing Officer (hereinafter called the AO ) u/s.143(3) read with Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treat peak cash credit as arrived by the assessing officer during the assessment proceedings for ₹ 3,05,500/- as unexplained cash credit in the hands of the assessee. The grounds of appeal on the issue is accordingly dismissed. 1. The issues raised by the Hon. ITO in his Asst. Order (extract above) are as follows :- i) Bank statement were examined. ii) The assessee informed during the course of hearing that he could not produce the details for cash deposits. iii) The assessee agreed for adopting 'peak credit' method to find out the income on account of cash deposits. iv) Accordingly, peak credit was worked out to ₹ 3,05,500/- is added to the total income of the assessee. Hence, primarily the reason for adding ₹ 3.05,500/- under peak credit method, is the assessee could not produce the details for cash deposits. 2. The issues raised by the Hon. CIT (Appeals) in his Appeal Order (extract above) are as follows:- i) The AO has not examined the source of above cash deposits. ii) Complete books of accounts, evidences, various ledger accounts like loan accounts, jewel loan account, commission account, interest accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is presumptive, [as explained in 2(b) above] iv) With reference to point 2(iv) above: The Hon. CIT (A)-13 statement that source of cash deposit as such could not be substantiated with evidences is incorrect because: a) The cash book clearly shows the evidences for the source of the cash deposits. The sources for cash deposits as per the Cash Book are namely, Opening cash balance, building rent, tower rent, remuneration and interest on Capital received as Managing Partner from the Partnership Firm, bulk cash withdrawals from the same bank etc., b) The cash book entries clearly depicts the source of cash deposits does not arise from items like loan accounts, jewel loan account, commission account, interest as mentioned in the CIT (A) Order. v) With reference to point 2(v) above: The Hon. CIT (A)-13 statement that in absence of supporting and corroborative evidences considering peak cash credit is incorrect because: As explained (iv) (a) (b) above there are sufficient supporting and corroborative evidences for the cash deposits in the bank. vi) With reference to point 2(vi) above: The assessee now producing reconstru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin four years from the end of the assessment year. Similar issues are involved in both the years and we are adjudicating both these appeals together. The assessee for ay: 2011- 12 filed a letter dated 12.08.2015 stating that return of income filed on 24.10.2011 may be treated as return of income in respect of notice issued u/s.148 of the Act by the AO. While for ay: 2012-13 since the assessee did not file his return of income originally , the assessee in the course of reassessment proceedings in pursuance to notice dated 29.01.2015 issued by AO u/s 142(1) of the 1961 Act filed return of income on 17.07.2015 admitting a total of ₹ 3,46,000/- in response to notice issued u/s 148 of the 1961 Act. During the course of reassessment proceedings conducted by AO u/s 147/148 of the 1961 Act for both the ay s: 2011-12 2012-13, the assessee was asked to produce sources for cash deposits, confirmation for loan, details of interest paid and copy of bank statements. The AO in the meantime obtained bank statements directly from bank which were examined by the AO. The assessee submitted before the AO during the course of proceedings that due to the accountant of the assessee leaving his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also stated that during the course of original appellate proceedings conducted by Ld.CIT(A) , the assessee has produced additional evidences explaining cash deposits by way of computerized cash book and bank book. The assessee also filed books of accounts for verification along with balance sheet , P L A/c, Indian Overseas Bank book maintained for fy s, cash book(s) maintained and ITR acknowledgment(s) for both the years. The matter was remanded by Ld.CIT(A) to AO for necessary verification and for submission of remand report. The AO admitted in its Remand report that assessee was prevented to produce the relevant records before the AO during the course of the assessment proceedings due to floods in Chennai. The AO also admitted in remand report that aforesaid documents were filed, the copy of remand report is produced for ay: 2011-12 is reproduced hereunder: GOVERNMENT OF INDIA OFFICE OF THE INCOME TAX OFFICER, Non Corporate Ward-11(4), Room No.206, 2nd Floor, Tower II, BSNL Building, 16.Greams Road, Chennai-600 006. NOTICE U/S 271 (1) (C) R.W.S 129 OF THE INCOME TAX ACT, 1961 PAN: AATPG7393J/ NCW-11(4)/ REMAND REPORT/2018-19 Dated: 30/07/2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rces of cash deposits before AO in remand report proceedings and nothing more is required to be said and prayers were made to delete additions as were made by the AO. The Ld.CIT(A) rejected contentions of the assessee , by holding as under: Decision: The appellant filed rectification petition u/s 154 stating that the undersigned has not considered the additional evidences submitted in the course of appeal proceedings. The appellant contended that the very basis on which peak cash credit method is to be applied is, when the appellant is completely unable to explain the source of cash credit. In the present case the appellant submitted that he has provided source of cash credit (cash book having positive cash balance) even though not during the assessment proceedings but at the time of Appeal proceedings. The appellant further submitted that the non co-operation and non submission of relevant documents at the time of assessment proceedings were due to some unavoidable circumstances and clarified it was neither intentional nor willful, because of which he could not produce the books of accounts which lead to the addition of peak credit of ₹ 6,25,500/- for the year un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Shri. K. Gurumurthy - PAN: AAIPG7393J - AY: 2011-12 Ref: Remand report under rule 46A of Income Tax Rules 1962 letter Dt.13.06.2018 from the O/o CIT(A)-13 in ITA No: 146/AY 2011-12/RR/CIT(A)-13. We have received and have noted the contents of the Remand Report dt. 30.07.2018 issued by the Hon.ITO NCW-11(4) Chennai, with respect to the AY 2011-12. We do not have any point to rebut the contents of the Remand Report, since the Hon. ITO has accepted all of our submissions. We have enclosed herewith the following: 1. Copy* of letter dt. 17.05.2018 submitted to Hon. ITO NCW 11(4). *(PDF copy and editable word file) 2. Copy ITR ack AY 2011-12 3. Copy of Balance sheet for the FY 2010-11 4. Copy of Profit Loss a/c for the FY 2010-11 5. Copy of IOB bank book and Cash book for the FY 2010-11 Prayer: We earnestly pray to the HON. CIT (A) 13 to kindly consider and accept our submissions. The AO was required to verify the source of cash deposit appearing in the bank accounts. The assessee has re-constituted cash books based on withdrawal and deposits from the bank accounts. But has not explained the source from where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- as unexplained cash credit in the hands of the assessee. The grounds of appeal on the issue is accordingly dismissed. In the result, the appeal of the assessee is dismissed. 5. Aggrieved by separate appellate orders both dated 21.08.2018 passed by learned CIT(A) for both ay s , the assessee has filed two seperate appeals before tribunal. Since common issues are involved both these appeals are disposed off by this common order. The learned counsel for assessee made contentions before the Bench that assessee has discharged his onus and all the details as to sources of cash deposits were duly explained in remand proceedings before AO and before Ld.CIT(A). It was stated that there was flood/rains in Chennai in December 2015 which led to damage to the records/books of accounts and hence when assessment proceedings were going on before AO, the assessee could not produce relevant documents/records and it is explained that later on said documents including cash book and sources of cash deposits were duly produced before AO Ld.CIT(A) and proper explanations were submitted. It is prayed that additions to the income as were made by authorities below by adopting peak cash m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Loss a/c for the FY 2010-11 5. Copy of IOB bank book and Cash book for the FY 2010-11 Similar records were also produced for ay: 2011-12 by assessee before learned CIT(A) and AO during remand proceedings.The Ld.CIT(A) observed that source for cash deposits were not explained with the cogent evidences. The assessee has tried to explain the sources of cash deposits before us through cash/bank book filed before us by way of withdrawals from banks, rent , partner remuneration from firm etc. which need verifictaion. We have also at the same time observed that no specific deficiencies were pointed out by authorities below in the cash/bank books while generalized adverse comments were made by authorities below. To be fair and reasonable to both the parties and to render justice, in our considered view, there is a need for verification of cash/bank book entries vis- -vis cash deposits and co-relation with income declared by assessee before Revenue in the return of income filed and consequently due taxes paid to revenue on such income claimed to be sources of deposits. Thus for this limited verification ,we are restoring the matter back to the file of the AO for both the years as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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