TMI Blog2022 (10) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... e issues on merits will be dealt. From the record, it is evident that even after receipt of the reasons recorded for issuing notice under section 148 of the Act, the assessee did not file any objections against same nor sought any other details. As noted above, the reasons recorded indicate the basis on which proceedings under section 147 of the Act were initiated in the case of the assessee. Therefore, we are of the considered view that AO had 'reason to believe' on the basis of tangible material for initiating proceedings under section 147 of the Act. As a result, grounds No. 1 and 2, raised in assessee's appeal, are dismissed. Addition on account of cheque and cash deposited in the bank accounts of the assessee - It is not in dispute that assessee's bank account with HDFC Bank was an overdraft account and the closing overdraft balance on this account tallied with the 'Bank OD A/c' on the liability side of the assessee's balance sheet. In the return of income filed in response to notice issued under section 148 of the Act, the assessee returned the above figures of overdraft. Therefore, insofar as the cheque transactions amounting to Rs. 8,15,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order passed by the learned CIT(A). As a result, ground raised in assessee's appeal is dismissed. - ITA No. 7952/Mum./2019 - - - Dated:- 26-9-2022 - SHRI OM PRAKASH KANT , ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL , JUDICIAL MEMBER Assessee by : Shri Piyush Chhajed a/w Shri Sumit Mantri Revenue by : Shri Ajeya Kumar Ojha ORDER Per Sandeep Singh Karhail, JM The present appeal has been filed by the assessee challenging the impugned order dated 16/10/2019, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by learned Commissioner of Income Tax (Appeals)-6, Mumbai, [ learned CIT(A) ], for the assessment year 2010-11. 2. In this appeal, the assessee has raised following grounds: The Grounds of Appeal mentioned hereunder are without prejudice to one another 1. On the facts and circumstances of the case, the Learned Assessing officer erred in Issuance of Notice U/s 148 without bringing but any tangible material in the reasons recorded based on which the formation of belief as to Income has escaped Assessment. 2. On the facts and circumstances of the case, the Learned Assessing officer ought to have apprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons. In response, assessee filed electronically return of income on 02/04/2015, declaring NIL total income. Pursuant thereto, statutory notices under section 143(2) and 142(1) of the Act were issued and assessee filed its reply to the information/details sought. After considering the submissions of the assessee, the Assessing Officer ('AO') vide order dated 10/02/2016, passed under section 143(3) r/w section 147 of the Act assessed the total income at Rs. 44,50,240, after making certain additions to the income returned by the assessee. We find that in its appeal before the learned CIT(A), the invocation of jurisdiction under section 147 was not challenged by the assessee and thus there are no findings on this aspect by the learned CIT(A). However, in the present appeal, the assessee has for the first time challenged invocation of proceedings under section 147 of the Act. Though, any issue which is raised for the first time is required to be taken by way of an additional ground. However, since the present issue is the legal issue and the basic facts for deciding the same are also on record, therefore, we proceed to decide the same. The learned Departmental Representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t file the Return of Income for A.Y. 2010-11. Since no return has been filed and also no Books Balance Sheet, Profit Loss Account, computation of Income Tax is available on record; I have reason to believe that the income has escaped assessment. Therefore, the case has been reopened u/s. 147 of the I.T. Act and accordingly notice u/s. 148 of the Act dated 17/03/2015 has been issued. 8. Thus, from the aforesaid it is evident that the proceedings under section 147 of the Act were initiated not only on the basis that cash has been deposited by the assessee but AO also had the information regarding the other transactions of the assessee, which in the absence of any return of income, were not disclosed by the assessee. In ACIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd., [2007] 291 ITR 500 (SC), the Hon'ble Supreme Court observed as under: 16. Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase reason to believe would mean cause or justification. If the Assessing Officer has cause or justification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions some codes of the Department. As per the learned DR, the codes links to the information available with the Department and the assessee never requested during the continuation of the proceedings under section 147 of the Act to share that information. The learned DR further submitted that extent of the information available with the Department will be clear when the issues on merits will be dealt. From the record, it is evident that even after receipt of the reasons recorded for issuing notice under section 148 of the Act, the assessee did not file any objections against same nor sought any other details. As noted above, the reasons recorded indicate the basis on which proceedings under section 147 of the Act were initiated in the case of the assessee. Therefore, we are of the considered view that AO had 'reason to believe' on the basis of tangible material for initiating proceedings under section 147 of the Act. As a result, grounds No. 1 and 2, raised in assessee's appeal, are dismissed. 10. The issue arising in grounds No. 3 and 4, raised in assessee's appeal, is pertaining to addition on account of cheque and cash deposited in the bank accounts of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cheque Interest / Dividend Total Vaishya Sahakari Bank Ltd. (Dindoshi Branch, Mumbai) S.B. A/c 6217 3,88,000 8,75,222 83 12,63,305 NKGSB Co op. Bank Ltd. (Dindoshi Branch, Mumbai) S.B. A/c 16650 14,30,000 9,63,500 4756 23,98,256 Total: 18,18,000 18,38,722 4839 36,61,561 13. Accordingly, the AO asked the assessee to show cause as to why the credits in these accounts should not be treated as income of the current year. In respect of the cheque deposits, the assessee submitted that same are mainly transferred from other bank accounts of the assessee and his wife except Rs. 90,000, Rs. 3,50,000, deposited with NKGSB Bank on 24/06/2009, and 25/09/2009, and Rs. 3,50,000, deposited with Vaishya Sahakari Bank on 25/09/2009, about which assessee agreed and admitted that he does not have any details of so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proceedings without disputing the aforesaid facts have contended that the rest of the deposits except for Rs. 90,000/-, Rs. 3,50,000/- deposited with NKGSB Bank on 24.06.2009 and 25.09.2009 and Rs. 3,50,000/- deposited in Vaishya Sahakari Bank on 25.09.2009 i.e., totaling to Rs. 7,90,000/-, all other deposits are either explainable based on the contention that the cash etc., were taken from daughter, sourced from past saving of the self or cash corpus of Rs. 15,00,000 for medical treaties of assessee's wife and brother and maintained by the family with him it can be seen that there is no details, documents or any plausible explanation which could lend credence to such story submitted by the assessee. Further thereto, if the sums so credited in the undisclosed bank accounts were in any ways explainable, there was no reason for the assessee to have not disclosed the said accounts, despite issue of notice u/s. 148 of the Act and assessee clearly knowing that once the notice u/s. 148 has been issued and the return has been filed only consequent to that, the case of the assessee shall be subjected to scrutiny. The assessee probably by filing the return of income declaring a loss, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le and are therefore, rejected. Similar is the position regarding credit of Rs. 4,839/- as the assessee had shown interest of Rs. 28/- and Rs. 30/- credited in NKGSB Bank as dividend income and therefore the fact that Rs. 4,839/- also represented exempt income is not found to be acceptable. In view of the facts and circumstances of the case and discussion hereinabove, the submissions of the assessee are not found to be acceptable and are rejected. Ground No. 1 is accordingly dismissed. Being aggrieved, the assessee is in appeal before us. 15. During the course of hearing, learned AR by referring to the bank account statements of the assessee and his wife maintained with HDFC bank submitted that the cheque transaction of Rs. 22,15,000, in the aforesaid two undisclosed bank accounts, is from HDFC bank account. As regards the cash deposited in the aforesaid two undisclosed bank accounts, the learned AR reiterated the submissions made before the lower authorities. The learned AR also referred to the income tax return of the daughter of assessee, forming part of the paper book. On the other hand, the learned DR vehemently relied upon the orders passed by the lower authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. POONAM SANGHI HDFC OD A/C 11578 961673 26/09/2009 3,50,000 4. HDFC OD A/C 11578 46537 24/02/2010 1,00,000 5. HDFC OD A/C 11578 46539 05/03/2010 1,00,000 6. HDFC OD A/C 11578 46543 20/03/2010 2,00,000 7. HDFC OD A/C 11578 46548 30/03/2010 2,00,000 SUB TOTAL b 9,50,000 8. UNEXPLAINED CHEQUES RECEIPT 24/06/2009 90,000 SUB TOTAL c 90,000 GRAND TOTAL (a+b+c) 14,30,000 Vaishya Co.op. Bank A/c 6217 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hya Sahakari Bank (account No. 6217) are also from assessee's and his wife's aforesaid bank accounts maintained with HDFC Bank. 18. Further, in the present case, it is not in dispute that assessee's bank account no. 02122100000104 with HDFC Bank was an overdraft account and the closing overdraft balance on this account tallied with the 'Bank OD A/c' on the liability side of the assessee's balance sheet. Further, in the return of income filed in response to notice issued under section 148 of the Act, the assessee returned the above figures of overdraft. Therefore, in view of the above, insofar as the cheque transactions amounting to Rs. 8,15,000 in the aforesaid two undisclosed bank accounts, which are duly corroborated with the assessee's overdraft bank account maintained with HDFC bank, we find the same to be duly explained. Therefore, to this extent we direct the AO to delete the addition made under section 69A of the Act. 19. However, as regards wife's bank account no. 0060210011578, the nature of receipts and source of deposit in her account are not explained and the assessee merely submitted that the deposits in aforesaid two undisclosed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted upon by the bank. Thus, we do not agree with the plea of the assessee and upheld the orders passed by the lower authorities in respect of the cash deposits in the aforesaid two undisclosed bank accounts by the assessee. 22. As a result, ground No. 3 is partly allowed for statistical purpose, while ground No. 4 raised in assessee's appeal pertaining to cash deposit of Rs. 13,51,500 is dismissed. 23. The issue arising in ground No. 5, raised in assessee's appeal, is pertaining to addition of Rs. 6,31,000 in respect of peak cash deposit in HDFC bank account. 24. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the course of assessment pursuant to notice under section 148 of the Act, while examining the entries in the disclosed bank accounts of the assessee it was observed that there are several entries of cash deposits. The assessee was asked to file source of such cash deposits along with copy of cash book Ledger. In reply, the assessee filed two cash book Ledgers. One as per the books of account maintained and other accounting for the undisclosed bank accounts. The AO vide order passed under section 143(3) r/w sect ..... 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