TMI Blog2022 (5) TMI 1141X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has produced the names of the person to whom the payments have been made and the copy of the bank account from which the payments are made. It is also substantiated by the ledger accounts where narration of such expenditure is provided. Only reason for disallowance is that the names of persons, which mentioned in the bank statements and their identity, could not be verified. Amount of gross income shown by assessee AO has disbelieved gross receipt - The gross receipts have been stated to be higher than the cash deposit of ₹30,63,900/- and ₹ 2 lacs. These two items are also separately added by the learned AO. Naturally, the gross receipts i.e. Income as well as the expenditure both have been added into the hands of the assessee. Even otherwise, the learned Assessing Officer should have verified independently whether the cash deposit is a sum received by the assessee as professional fees or not. Further, when the amount is deposited in bank account is emanating from books of accounts, further addition of cash deposit amounts to double addition. Ld AO did not carry out this examination. Advance received Assessing Officer could have asked the assessee to produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Commissioner of Income tax (Appeals)-4, Mumbai [the learned CIT (A)] on 28 February 2020 for Assessment Year 2013-14. 02. Assessee has raised following grounds of appeal. 1. That the order passed by the Ld. CIT (A) u/s 250(6) was incorrect, bad in law and have been passed without considering the submissions of the appellant. 2. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned reassessment order u/s 143(3) r.w.s147 of the Act and that too without assuming jurisdiction as per law and without complying with the mandatory conditions u/s 147 to 151 as envisaged under the Income Tax Act, 1961. 3. That the reasons recorded by Ld. AO for issuance of notice u/s 148 read with S. 147. has not been supplied to the assessee with the notice u/s 148 as well as subsequently which is totally against the settled proposition of law and Ld. CIT (A) erred in upholding the same. 4. That the Ld. AO has erred in following the procedures laid down for issuance of notice u/s 148 of the Act, i.e. recording of reasons before issuance of notice, sanction appropriate author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 148 of the income-tax Act, 1961 (the Act) was issued on 21 March 2018. The assessee in response to the notice stated that he has already filed his return of income on 28th September, 2018 declaring total income of ₹4,48,890/-. The Assessing Officer issued notice under section 133(6) of the Act to DCB bank, Mumbai and ICICI Bank, Mumbai for calling certain details. The learned Assessing Officer on examination of the return noted that assessee has shown a turnover of ₹52,45,940/- on account of professional receipts and miscellaneous income. Assessee has also shown cash on hand and bank balance of ₹58,95,562/-, but cash deposit of ₹96,95,000/- could not be traced either in the turnover of the assessee or in the balance sheet. The Assessing Officer further examined the gross turnover of the assessee of ₹52,45,940/-. The Assessing Officer also examined that assessee has also shown expenditure of ₹51,15,384/- and net income was shown at ₹1,30,556/-. It was also noted that assessee has deposited cash of ₹30,73,900/- in DCB bank account. The assessee explained that the above cash deposited was from the books of accounts, it was st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as asked to explain these cash deposits. With respect to the sum of ₹75 lacs in a DCB account, Assessee submitted that the above sum was received in terms of agreement dated 19 July 2012, between assessee and Mr. Gurdeep Singh Chadha. He submitted copy of agreement as well as confirmation of Mr. Chadha. He also gave the address of the person, who paid of ₹75 lacs, which is a cash advance. The learned Assessing Officer rejected the same stating that stamp paper which is purchased on 30th April, 2012, was used for agreement dated 19th July, 2012, is not in the name of either of the parties. Therefore, he rejected that it is an afterthought. Learned Assessing Officer refused to believe it and made a Google search to found that Mr. Gurdeep Singh Chadha had died on 17 November 2012, and therefore, the agreement could not have been entered on 19 July 2012. He also alleged that Mr. Gurdeep Singh Chadha is known as Ponti Chadha. He further noted that cash advances were given to the assessee after the death of Mr. Gurdeep Singh Chadha and a confirmation letter dated 1 April 2013 was given after his death. Thus, ld AO held that the cash deposit of Rs 75 lakhs allegedly received f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name of either of the parties, then such Instrument cannot be admitted in evidence for any purpose. Thus, there is merit in the argument of the A.O that agreement seems to be made as an after thought (2) The agreement has been executed on 19.07.2017 whereas cash totaling up to 75 lakhs has been deposited between 07.01.2013 and 04.02.2013. On this issue, there seems to be merit in the argument of the A.O that it is improbable that cash received as advance on the occasion of signing of contract will be kept by the assessee with him for six months without depositing the same immediately. (3) A confirmation letter dated 01.04.2013 is being referred to by the Appellant. This confirmation is allegedly signed by Mr. Gurdeep Singh Chadha and the date of this letter is 01.04.2013. However, the A.O has clearly demonstrated in the assessment order that Mr. Gurdeep Singh Chadha alias Ponty Chadha had died on 17.11.2012. 4.4 On the basis of above facts, it can be seen that the A.O has given a point by point rebuttal of all the arguments made before him regarding the cash deposit of ₹ 75,00,000/- The A.O has demonstrated by his inquiry and analysis that the Appellant has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aryana High Court in the case of Sudhir Kumar Sharma, HUF V/S CIT 3, Ludhiana 224 Taxman 178 that in case where cash has been deposited in the bank account of the assessee, onus is upon the assessee to explain the nature and source of such deposits. It is important to mention here that SLP filed against this case has been dismissed by the Hon'ble Supreme Court 239 Taxman 264 (SC). After considering the totality of the facts and the position of the law, addition of 2,00,000/- is, sustained. 07. Assessee is aggrieved with that order and has preferred this appeal. 08. The learned Authorized Representative and the learned Departmental Representative were heard extensively on these issues. The learned Departmental Representative vehemently supported the order of the learned lower authorities, however, the learned Authorized Representative submitted that a. Addition of ₹ 75 lacs is unwarranted when the confirmation was provided. He submitted that the business of the Wave Films is continuing and therefore the confirmation as well as the transaction is genuine. He further submitted that merely because Mr. Gurdeep Singh Chadha has passed away, the business of that perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,85,384/- out of the total expenditure of ₹51,15,384/-. In the order itself, the learned Assessing Officer earlier agreed with the assessee that only 40% of such expenditure is disallowable. Order sheet has been reproduced by the learned Assessing Officer at page no. 6 of the assessment order. When the assessee agreed for 40% disallowance, the learned Assessing Officer made the volte face and disallowed almost 100% of such expenses. In support of that expenditure, assessee has produced the names of the person to whom the payments have been made and the copy of the bank account from which the payments are made. It is also substantiated by the ledger accounts where narration of such expenditure is provided. Only reason for disallowance is that the names of persons, which mentioned in the bank statements and their identity, could not be verified. 012. Further, with respect to the amount of gross income shown by assessee of ₹52,45,940/-, the learned Assessing Officer has disbelieved gross receipt. The gross receipts have been stated to be higher than the cash deposit of ₹30,63,900/- and ₹ 2 lacs. These two items are also separately added by the learned Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
