TMI Blog2021 (1) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... ade of ₹ 6,055,367/ . Thus assessee gets relief of ₹ 5,598,734/ . Enhancement made by the learned CIT A - HELD THAT:- CIT A must first issue a notice to the assessee proposing the reasons and the amount of enhancement of the income of the assessee. In the present case the learned CIT A has enhanced the income of the assessee without issuing any show cause notice. Therefore it is clearly in violation of the provisions of Section 251 (2) of the income tax act and therefore it cannot be sustained. Even otherwise the learned CIT A has provided 24 opportunities to the assessee to hear him on the merits of the addition made by the learned assessing officer. However, for the purpose of making enhancement he did not issue a single notice as provided u/s 251 (2) of the act which clearly shows that enhancement cannot be sustained. Addition for non-deduction of tax at source as well as for making payment in violation of the provisions of Section 40 A (3) - HELD THT:- AO has rejected the books of accounts of the assessee, which is been upheld by the learned CIT A. Even otherwise when books of accounts have been rejected in toto by the learned assessing officer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of provisions of sec. 40a(ia)/40A(3). (iv) That even otherwise, there is no case of violation of provisions of sec.40a(ia)/40A(3) of the Income Tax Act, 1961. (v) That the provisions of sec. 40a(ia)/40A(3) have been applied on illegal and arbitrary basis and without proper appreciation of facts and opportunity to the appellant. 4.That the orders of the lower authorities are not justified on facts and same are bad in law. 03 Brief facts of the case shows that assessee is an Individual and is carrying on the business income from hiring charges, advertisement and rent a cab business. He also earned interest income and the accounts are audited under Section 44AB of the Income Tax Act, 1961 (the Act). In the profit and loss account assessee shows income for hiring receipts. The assessee filed its return of income on 30th September, 2009 declaring total income of ₹ 5,01,650/-. The case of the assessee was selected for scrutiny. 04 The assessment under Section 143(3) of the Act was passed by the ld. Income Tax Officer, Ward 32 (1), New Delhi, on 20th December, 2011 wherein an addition of ₹ 16,80,537/- was made on account of cash deposit in ICICI Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the act. He otherwise submitted that when the assessee has been assessed on the best image business by finding out the difference between the amount of investment made with the amount of source available with the assessee for making such investment, the disallowance cannot be made for non-deduction of tax or for provisions of Section 40 A (3) of the act. 07 The learned departmental representative vehemently supported the orders of the learned lower authorities. He submitted that for the purpose of making the enhancement the learned CIT A has held the hearing 24 times and therefore it cannot be stated that the assessee has not been granted any opportunity as provided u/s 251 (2) of the act. 08 We have carefully considered the rival contention and perused the orders of the lower authorities. The facts stated in this case earlier clearly shows that there was a cash deposit in the bank account of the assessee amounting to ₹ 1,680,531 and assessee has also made credit card payment of ₹ 1,069,179/ to the HDFC bank Ltd and Citibank. The assessee is engaged in the business of renting of cabs in the name of Mrs Suneel Saini and has five bank accounts. In these five bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vertisement expenses of ₹ 4,623,279/ , commission expenses of ₹ 1,903,597 and interest expenditure of ₹ 300,692 are required to be disallowed. He held that this is the enhancement of the income made by him and directed the learned assessing officer to give the consequential effect to this enhancement. Consequently the penalty was also initiated in respect of income of ₹ 1,127,000/ u/s 271 (1) (c) of the act. Before us the learned authorised representative has stated that the assessee has been assessed u/s 16 (3) of the act for assessment year 2008 09 wherein the assessment order Under the wealth tax act 1957 was passed and the net wealth of the assessee has been assessed at ₹ 5,598,734 wherein the cash held by the assessee as on 31st of March 2008 i.e. the valuation date for assessment year 2008 09 has been accepted by the revenue. He stated that assessee was having the net wealth of cash in hand of ₹ 5,598,734 and the commercial vehicles of ₹ 1,473,088/ as on that date. This amount has been accepted by the revenue in the wealth tax act and consequential penalty proceedings Under the well tax act have also been initiated u/s 18 (1) (C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the learned CIT A has provided 24 opportunities to the assessee to hear him on the merits of the addition made by the learned assessing officer. However, for the purpose of making enhancement he did not issue a single notice as provided u/s 251 (2) of the act which clearly shows that enhancement cannot be sustained. Further the disallowance made by the learned assessing officer is for nondeduction of tax at source as well as for making payment in violation of the provisions of Section 40 A (3) of the act. The learned assessing officer has rejected the books of accounts of the assessee, which is been upheld by the learned CIT A. Even otherwise when books of accounts have been rejected in toto by the learned assessing officer and same has been confirmed by the learned CIT A also, the income of the assessee has been assessed on the basis of total investment made compared with the amount of funds available with the assessee for making such investment, no disallowance u/s 40 (a) (ia) or u/s 40 A (3) of the act can be made. Even after granting the assessee the credit of the opening cash on hand available at the beginning of the year, the addition sustained by us also remains on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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