TaxTMI 
TaxTMI 
2023 (3) TMI 776
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....l these appeals are clubbed, heard together and disposed off in this consolidated order. Appeal wise adjudication is given in following paragraphs of this order. ITA No. 247/Viz/2020 (AY: 2014-15) (By Revenue) 2. This appeal filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-10, Hyderabad [CIT(A)] in DIN & Order No. ITBA/APL/S/250/2020-21/1028055116(1), dated 24/09/2020 arising out of the order passed U/s. 143(3) of the Income Tax Act, 1961 [the Act] for the AY 2014-15. 3. Briefly stated the facts of the case are that the assessee is a non-resident filed his return of income electronically on 16/11/2014 for the AY 2014-15 admitting the total income of Rs. 52,81,470/-. Subsequently a revised return of income was filed on 24/1/2016 declaring a total income of Rs. 64,69,210/-. Subsequently, the case was selected for scrutiny and a notice U/s. 143(2) was issued to the assessee on 26/7/2016 by ACIT, Circle-2(1), Tirupati. Subsequently the case was transferred from ACIT, Circle-2(1), Tirupati to DCIT, International Taxation, Visakhapatnam. A notice U/s. 142(1) was issued on 8/9/2016 posting the case on 15/9/2016. The assessee's Authorized Represent....
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....ssued calling for explanation from the assessee. In response the Ld. AR of the assessee submitted that out of the consolidated salary received by the assessee in Nepal which is already taxed in Nepal has been brought into India and deposited in various bank accounts in India in assessee's account. The Ld. AO considered the explanation of the assessee is not in accordance with the Exchange Management (Export and Import of Currency) Regulations, 2000 and treated the cash deposits made by the assessee in India as income from other sources. Further, the Ld. AO also added an amount of Rs. 33,60,000/- by way of cheque into the assessee's bank account and since no explanation was offered by the assessee, Ld. AO added the same to the assessee's total income. Further, the Ld. AO on verification of the Balance Sheet furnished by the assessee treated the amount of Rs. 40,568/-, the difference between the actual amount received from the students and the amount disclosed in the balance sheet, as income of the assessee which was not disputed by the assessee. Further, the Ld. AO also made addition of Rs. 1,49,68,154/- since the assessee failed to explain the sources for the excess amount of unexp....
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....ve Bank of India vide Notification No. FEMA 6/RB-2000, dated 3rd May, 2000 concluded that the Indian Currency cannot be brought from Nepal in denominations of above Rs. 100/-. For the sake of convenience, the above regulation is reproduced below: "In exercise of the powers conferred by clause (g) of sub-section(3) of Section 6, sub-section (2) of section 47 of the foreign Exchange Management Act 1999 (42 of 1999), the Reserve Bank makes the following regulations for export from and import into India of currency or currency notes, namely: 8. Export and import of currency to or from Nepal and Bhutan: Notwithstanding anything contained in these regulations, a persona may: i) Take or send out of India to Nepal or Bhutan, currency notes of Government of India and Reserve Bank of India notes (other than notes of denominations of above Rs. 100 in either case); ii) Bring into India from Nepal or Bhutan, Currency notes of Government of India and Reserve Bank of India notes other than notes of denominations of above Rs. 100 in either case: iii) Take out of India to Nepal or Bhutan, or bring into India from Nepal to Bhutan, currency notes being the currency of Nepal or Bhutan." 9....
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....Ld. AR. Therefore, we find no infirmity in the order of the Ld. CIT(A) on this issue as the Ld. CIT(A) has rightly allowed the same and therefore we do not wish to interfere with the order of the Ld. CIT(A) on this ground. Thus, this ground raised by the Revenue is dismissed. 12. Grounds No. 9 and 10 with respect to deletion of addition of Rs. 1,49,68,154/- by the Ld. CIT(A) being the difference amount received from the students on behalf of the Medical College in Nepal and the amount transferred to the Medical College in Nepal. The Ld. DR submitted that the assessee has made cash deposits and cheque deposits including RTGS, NEFT transfers and has received a sum of Rs. 15,34,83,979/- in the bank account on behalf of the Medical College in Nepal. However, the assessee has transferred only Rs. 13,85,15,825/- to the Medical College in Nepal. Therefore, the Ld. DR submitted that the assessee has rightly treated the difference of Rs. 1,49,68,154/- as unexplained cash deposits and added the same to the total income of the assessee. Therefore, the Ld. DR pleaded that the order of the Ld. AO be upheld. Per contra, the Ld. AR submitted that this account is like a running account and the ba....
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....f liable to be assessed over and above the income returned an amount of Rs. 64,69,210/- under the facts and circumstances of the case. 4, Without prejudice the Ld. CIT(A) failed to adjudicate all the grounds raised by the respondent / cross objector under the facts and circumstances of the case: i) The Ld. CIT(A)-10, Hyderabad failed to appreciate that the order of assessment passed by the Ld. AO U/s. 143(3) of the Act is bad in law as the mandatory notice U/s. 143(2) of the Act was not issued within the time limit prescribed for the purpose of making assessment order U/s. 143(3) of the Act under the facts and circumstances of the case. ii) The Ld. CIT(A) failed to appreciate that the notice U/s. 143(2) of the Act, issued by the ACIT, Circle-2(1), Tirupati is bad in law as the Ld. ACIT Circle 2(1), Tirupati had no jurisdiction over the respondent / cross objector, under the facts and circumstances of the case. iii) The Ld. CIT(A) failed to appreciate that the Ld. DCIT(IT), Visakhapatnam is not justified in proceeding on the basis of notice issued U/s. 143(2) of the Act, issued by the Ld. ACIT, Circle 2(1), Tirupati without issuing mandatory notice U/s. 143(2) of the Act wit....
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....der was passed U/s. 143(3) of the Act is not valid in law. Further, the Ld. AR also submitted that notice U/s. 143(2) was issued by ITO, Circle-2(1), Tirupati where the assessment was completed by the DCIT (International Taxation), Visakhapatnam. The Ld. AR further submitted that no fresh notice U/s. 143(2) was issued by the Ld. DCIT (international taxation), Visakhapatnam. The Ld. AR further submitted that this issue was raised before the Ld. CIT(A) but not before the Ld. AO. The Ld. AR accepted that the assessee participated in the assessment proceedings. The Ld. AR therefore pleaded that the scrutiny assessment order passed U/s. 143(3) of the Act is invalid in law and shall be quashed. The Ld. AR relied on the decision of the Hon'ble ITAT, Visakhapatnam Bench in ITA No. 602/Viz/2019 in the case of D. Ushareddy vs. ITO. Per contra, the Ld. DR submitted that the assessee's return of income can be treated as modified return and not as a revised return. Further, the Ld. DR submitted that the assessee's case was selected for complete scrutiny and not for limited scrutiny as per the screen shot submitted before the Bench. The Ld. DR further submitted that as per section 143(2) of the....
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....he assessee has also participated in the proceedings before the jurisdictional Assessing Officer without objecting to the non-issuance of notice U/s. 143(2) of the Act as prescribed U/s. 124(3A) of the Act. In the instant case, since the assessee is a non-resident Indian, the case was transferred to the DCIT (International Taxation), Visakhapatnam and therefore the case relied upon by the Ld. AR is of no help to the assessee. In the light of the above facts, we are of the considered view that this legal ground raised by the assessee in his cross objection is dismissed. 22. The other grounds raised by the assessee are supportive in nature and therefore they need not be adjudicated. 23. In the result, Cross Objection filed by the assessee is dismissed. ITA No. 01/Viz/2021 (AY: 2015-16) (By Revenue) 24. This appeal filed by the Revenue against the order of the Ld. CIT(A)- 10, Hyderabad in DIN & Order No. ITBA/APL/S/250/2020- 21/102815937, dated 07/10/2020 arising out of the order passed U/s. 143(3) of the Act dated 31/3/2017 for the AY 2015-16. 25. The Revenue has raised 11 grounds in its appeal. However, Grounds No.2, 3, 4, 5 are with respect to deletion of addition towards cas....
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....erdraft account for a short period until credits into the accounts are made by the assessee to regularize the overdraft facility. The Ld. CIT (A) in para 13.2 has rightly considered the same and held as follows: "13.2. I have considered the submission made by the appellant and I am of the opinion that the amount of interest, which was charged by the Andhra Bank, Tirupati Branch, on the short term overdraft (SoD) Account No. 003330100005862, is a running account of the appellant, the amount which are credited is adjusted against the interest in the overdraft accounts or from the undisclosed sources, the amount which is out of the books of accounts or from the undisclosed sources, the amount which is debited to the account is accounted in the bank statement, the addition made by the AO only on the basis that the amount is not reflected in the books of accounts. As rightly pleaded by the appellant, the AO has not brought on record any evidence that the amount is paid out of undisclosed income. The recording of these transactions in the books of accounts is more a matter of form, rather than substance. The addition does not stand on merits and hence the Ground of appeal raised by the....
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....result, Cross Objection raised by the assessee is dismissed. ITA No. 02/Viz/2021 (AY: 2014-15) (By Revenue) 36. This appeal is filed by the Revenue against the order of the Ld. CIT(A)-10, Hyderabad in DIN & Order No. ITBA/APL/S/250/2020- 21/102816126, dated 7/10/2020 arising out of the order passed U/s. 143(3) of the Act, dated 30/12/2016 for the AY 2014-15. 37. Briefly stated facts of the case are that the assessee, Smt. Nallamilli Sridevi, is a non-resident filed here original return of income electronically for the AY 2014-15 on 16/11/2014 declaring total income of Rs. 28,77,080/-. Subsequently, the assessee filed a revised return on 24/1/2016 declaring a total income of Rs. 29,02,330/-. The assessee's case was selected for scrutiny under CASS with a direction to the Assessing Officer to examine certain issues viz., (i) Interest expenses; (ii) purchase of property reported in Form 26QB; (iii) substantial increase in capita in a year and (iv) sale consideration of the property reported in ITR is less than the sale consideration of property reported in AIR and to verify the cash deposits. Accordingly, a notice U/s. 143(2) was issued to the assessee on 25/7/2016 by the ITO (IT)....
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....ich is already taxed in Nepal has been brought into India and deposited in various bank accounts in India in assessee's account. The Ld. AO considered the explanation of the assessee is not in accordance with the Exchange Management (Export and Import of Currency) Regulations, 2000 and treated the cash deposits made by the assessee in India as income from other sources. Further, with respect to cash deposits in various bank to the tune of Rs. 1,00,90,882/- the assessee submitted before the Ld. AO that the same is nothing but her salary drawn from Nepal and on being asked to submit the reconciliation statement the assessee admitted that there is a deficit cash of Rs. 17,60,024/- and agreed to voluntarily offer the same as additional income for the FY 2013-14. Considering the assessee's explanation, the Ld.AO added the amount of Rs. 17,60,024/- as unexplained cash deposits. Further, the Ld. AO in the absence of any cogent evidence for the cash deposits in various banks, treated the amount of Rs. 55,00,000/- as unexplained cash deposits and added the same to the total income of the assessee. Thus, the Ld.AO computed the assessee's income and determined the assessed income at Rs. 2,81,....
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.... Revenue. 42. With respect to second issue viz., Addition of cheque deposits of Rs. 55,00,000/- in the assessee's bank account, the Ld. AR submitted that the sources for cheque deposits from assessee's joint bank account maintained with her husband. He therefore pleaded that it cannot be treated as unexplained / unaccounted cheque deposits as each amount is deposited by way of cheque transfers either from assessee's own account or from the joint account. He therefore pleaded that the order of the Ld. CIT(A) be upheld. Per contra, the Ld. DR submitted that no bank statement was provided before the Ld. AO and the assessee has furnished only before the Ld. CIT(A). The Ld. DR further submitted that such additional evidence should have been remanded back to the Ld. AO for his remand report after examining the same. The Ld. DR relied on the order of the Ld. AO. 43. We have heard both the parties and perused the material available on record and the orders of the Ld. Revenue Authorities. Admittedly it is noticed that the assessee has made cheque deposit in the bank accounts the details are as under: Sl no Deposited in Account No. Cheque No. Date Amount (Rs.) 1. Andhra Bank SOD A/c....
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.... it does not require any further enquiry by the Ld. AO and the Ld. CIT(A) has exercised his powers u/s. 250(4) of the Act and has rightly disposed off the additional evidence submitted before him. We therefore do not find any infirmity in the order of the Ld. CIT(A) on this issue also. Accordingly, the relevant ground raised by the Revenue on this issue is dismissed. 47. Ground No. 7 is general in nature and need not be adjudicated. 48. In the result, appeal filed by the Revenue is partly allowed. C.O. No.16/Viz/2021 (AY: 2014-15) (By Assessee: Nallamilli Sridevi) 49. This cross objection is raised by the assessee wherein the assessee has raised six main grounds (Ground no.4 has sub-grounds). A perusal of the Grounds raised by the assessee in the instant Cross Objection, we find that the Grounds are identical to that of the grounds raised by the assessee in the case of Sri Vittalam Nataraj Prasad (assessee's husband) vs. ACIT (IT), Visakhapatnam in his Cross Objection No.14/Viz/2021 for the AY 2014-15 which is adjudicated in the above paragraphs of this order. Considering the similarity of the issues involved in both the Cross Objections, our decision given in CO No. 14/Viz/20....