TMI Blog2021 (3) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... being heard have been given by the Ld. CIT(A). This issue is, therefore, decided against the assessee and contention of Learned Counsel for the Assessee is rejected. Addition of new source of income while enhancing the income of the assessee - A.O. has made addition on account of commission income estimated on Bank deposits in several Bank accounts maintained by assessee - Assessee submitted that Ld. CIT(A) cannot enhance the income by considering the new source i.e., entire Bank deposits as unexplained - HELD THAT:- Since the A.O. in the absence of any evidence on record did not make addition of unexplained cash deposits in the Bank accounts of the assessee and even no details were filed before the Ld. CIT(A), the Ld. CIT(A) was justified in considering the same source of income at appellate stage and was justified in making enhancement. Notice to the assessee as to show cause why income should not be enhanced by making the addition on account of entire cash deposited in the Bank accounts of the assessee clearly support his findings that it was same source considered. CIT(A), thus, did not consider a new source of income while making enhancement to the income of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the issue on merit has held that assessee failed to furnish the evidence to explain the source of the cash deposits in the Bank accounts of the assessee, therefore, entire cash deposits in the Bank accounts becomes unexplained money in the hands of the assessee under section 69A of the Income Tax Act, 1961. The Ld. CIT(A) also alternatively held that since the amount is credited into the books of the assessee, the amount is liable to be added under section 68 also. Thus, the finding of fact given by Ld. CIT(A) as reproduced above clearly show that Ld. CIT(A) correctly made addition under section 69A. Validity of reopening of assessment - as argued no reasons recorded under section 148 have been supplied to the assessee - HELD THAT:- CIT(A) also reproduced the Order Sheet Dated 05.11.2018 for the A.Y. 2008-09 in the appellate order in which Ld. CIT(A) has specifically mentioned the submission of the assessee that assessee never asked for the reasons for reopening of assessment as well as did not challenge the reopening of assessment in the matter. These background of the facts clearly show that assessee and A.O. were in collusion with each other and A.O. made a very small ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 148 of the I.T. Act, 1961. During the re-assessment proceedings the Bank accounts statements were requisitioned under section 133(6) of the I.T. Act, 1961 from 12 Banks details of which were noted in para-2 of the assessment order. The assessee has not filed any details in response to notice under section 142(1) of the I.T. Act, 1961, issued time to time. Hence, summons under section 131 of the I.T. Act, 1961 were issued and statement of assessee was recorded on oath. During the course of statement, assessee has admitted to have opened 12 Bank Accounts in different Banks which were operated by him through his proprietary concern M/s. Rama Trading Co. and M/s. Shri Govind Enterprises and M/s. Shri Bhagwati Enterprises. The accounts maintained are with ICICI Bank, Royal Bank of Scotland, Citizen Co-operative Bank, IDBI Bank, HDFC Bank and Indusland Bank. The assessee also explained that he was working as a commission agent and got commission on sale of clothes and chemicals. It was also explained that he is engaged in business of discounting of cheques, DDs and Pay Order and was also making payment for electricity bills on behalf of various factory owners and charge commission. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n A.Y. 2010-2011 assessee also raised the issue that no reasons for reopening of the assessment have been supplied to the assessee. The Ld. CIT(A) noted in the appellate order that no specific ground have been raised challenging the reopening of the assessment under section 148 in A.Y. 2008-2009. It was raised for the A.Y. 2010-2011 that A.O. has not provided copy of the reasons recorded for reopening of the assessment and there is non-application of mind. The Ld. CIT(A), however, noted that assessee has not raised this issue and that A.O. is expected to dispose of all the objections when assessee raised the objection before him. Copy of the reasons are given only when asked for by the assessee. The Ld. CIT(A) referred to Judgment of Hon ble Supreme Court in the case of GKN Sriveshafts (India) Ltd., vs., ITO Others [2003] 259 ITR 19 [SC]. The Ld. CIT(A) also noted that A.O. has asked the assessee to explain the source of the deposits in the Bank Accounts, therefore, reasons for reopening of the assessment stood communicated to the assessee. The Ld. CIT(A) also mentioned the order sheet Dated 05.11.2018 in the impugned order in which assessee has submitted before him that copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, non compliance of the decision of the Hon ble Apex Court in the case of GKN Drivshafts India Ltd. (supra) could not have made the assessment order void ab-initio. As regards the reasons recorded, the standard operating procedure of the department has been discussed in the decision of Mayur Bhai Mangal Das Patel of Hon ble ITAT Ahemdabad, confirmed by Hon'ble Gujarat High Court and reported in 93 taxman.com 220 Gujarat. 13. On merits the electricity companies do not accept cash payments tor its bills above a threshold amount. The assessee claims to be engaged in issuing cheques for payment of electricity bills of clients against cash received from them. Such activity is opposed to public policy and is an illegal activity. Without prejudice to the same the assessee is still required to explain the source of cash deposits by furnishing the names and addresses of persons from whom such cash has been received and deposited. The assessee failed to furnish the same therefore the entire cash deposits in the bank account becomes unexplained money in the hands of the assessee u/s 69A. Since the amount is credited into the books of the assessee the amount is liable to be added u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltimately there were no compliance to the notice of hearing. The Counsel for Assessee was also replied about the dates of hearing fixed for hearing of the appeals in response to the request for adjournment made by the Counsel for Assessee. Therefore, contention of Learned Counsel for the Assessee is without merit that no reasonable opportunity of being heard have been given to the assessee. Section 251(2) of the Income Tax Act, 1961 provides The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such assessment or reduction. This provision does not require the Ld. CIT(A) to issue any formal notice to the assessee for enhancing the assessment. The only requirement provided is that the Ld. CIT(A) while enhancing the assessment shall give a reasonable opportunity of showing cause against such enhancement. In the present case, the Ld. CIT(A) has given a specific notice to assessee under section 251(2) of the Income Tax Act, 1961 for enhancing the assessment and such fact is mentioned in the Order Sheets Dated 05.11.2018 and 15.11.2018 as is mentioned in paras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see which do not match with the returned income shown by the assessee. The A.O, therefore, reopened the assessment on having reason to believe that income chargeable to tax on account of unexplained cash deposits in the Bank accounts of the assessee has escaped assessment. The A.O. called for the details of the Bank accounts from the assessee, but, the assessee did not produce the same. The A.O, however, requested the details of Bank accounts under section 133(6) of the Income Tax Act, 1961 and ultimately assessee agreed that he was maintaining 12 Bank accounts in assessment year 2010-11and 02 Bank accounts in assessment year 2008-09. The assessee explained that he is working as a commission agent of sale of cloth and chemical and was also engaged in business of discounting of Cheque/Demand Draft/Pay Order and also making payment of electricity bills on behalf of the various factory owners and charge commission. The A.O. asked the assessee to give names and addresses of the factory owners and the businessman and to support such statement. However, no such information have been provided by the assessee. The A.O. in the absence of such information should have consider the cash deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts. Therefore, additions have been rightly made against the assessee on merit. The Ld. D.R. relied upon the Judgment of the Hon ble Punjab and Haryana High Court in the case of Sudhir Kumar Sharma vs., CIT 46 taxmann.com 340 (P H) in which there was huge cash deposited in the Bank accounts of the assessee. The assessee failed to give list of the persons who advanced cash to him along with their conformations in respect of the said cash credit. The addition under section 68 of the I.T. Act 1961, was confirmed. The decision of the Punjab and Haryana High Court in this case has been confirmed by the Hon ble Supreme Court by dismissing the SLP which was reported in 69 taxmann.com 3219 (SC). The Ld. D.R. also similarly relied upon Judgment of the Hon ble Delhi High Court in the case of Rajiv Jain vs., ITO reported in 101 taxmann.com 92 (Del.) in which assessee made cash deposits in his Bank accounts and claimed that the said amount represented sale proceeds of wearing apparel and traditional silver utensils. The A.O. rejected the explanation of assessee and made the addition in the absence of any evidence or material to establish sale or inheritance etc., impugned addition was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sinessman which were deposited in the Bank accounts of assessee for making further payment on their behalf. In the absence of any evidence, material or explanation in this regard, we are of the view that assessee failed to substantiate the explanation given before the authorities below, therefore, assessee failed to establish the source of the cash deposits in the Bank accounts of the assessee. We, therefore, do not find any merit in this ground of appeal of assessee. The same is accordingly dismissed. ISSUE NO. 4 : 12. Whether addition under section 68 on account of cash deposits in the Bank accounts is maintainable ? 13. Learned Counsel for the Assessee submitted that Ld. CIT(A) has made addition under section 68 of Income Tax Act, 1961, despite assessee did not maintain any books of accounts. Therefore, addition under section 68 of the Income Tax Act is not sustainable. We do not agree with the contention of Learned Counsel for the Assessee. The Ld. CIT(A) while considering the issue on merit has held that assessee failed to furnish the evidence to explain the source of the cash deposits in the Bank accounts of the assessee, therefore, entire cash deposits in the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pening of the assessment from the A.O. as per remand report of the A.O. It appears from the findings recorded by the A.O. in the assessment order that despite there were cash in Crores of Rupees found to have been deposited in the Bank accounts of the assessee and assessee failed to explain the source of the cash deposits in the Bank account of assessee, the assessee choose to remain silent before the A.O. as regards reopening of assessment because the A.O. without any reasons and justification and in collusion with the assessee completed the formality just by making addition an account of small commission. The A.O. in A.Y. 2010-11 as against the total unexplained cash deposit of ₹ 24.34 crores made addition of ₹ 19,47,247/- only. In A.Y. 2008-09 despite there were unexplained cash deposits in the Bank accounts of assessee of ₹ 10.95 crores, the A.O. merely made addition of ₹ 2,32,434/- only. The background of these facts clearly show that despite A.O. reopened the assessment on account of unexplained cash deposits being in the Bank accounts of the assessee, but, the A.O. in collusion with the assessee did not make additions on account of unexplained deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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