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TMI Blog2023 (6) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... (the Act) concerning AY 2009-10. 2. The substantive grounds of appeal raised by the assessee are extracted hereunder: "1. On the facts and circumstance of case and in law, the Ld. CIT(A) has wrongly enhanced the disallowance made by the Ld. Assessing Officer in making addition of Rs. 42,10,200/- by invoking the provision of 69 w.r.t. unexplained investment to Rs. 3,69,55,260/-. 2. On the facts and circumstance of case and in law, the Ld. CIT(A) as well as the Ld. Assessing Officer has erred in making addition on the ground other than recorded reasons." 3. In the course of hearing, the ld. counsel for the assessee raised additional grounds of appeal vide application dated 02.03.2023 which read as under: "1. That the initiation of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition, both erred in law and in facts of the case that the additions are not sustainable in law as the same has been made without identifying the precise section under which additions are covered. 5. The Ld. Assessing Officer erred in re-opening of the assessment that while recording the "Performa for approval to issue notice u/s 148 of the Act" mentioned that case falls under the Explanation 2(c) of section 147 of the Act without appreciating the fact that the no original assessment was completed u/s 143(3) and the reopening the assessment based on wrong premises, is merely patent non-application of mind." 5. As per Rule 11 of the Income Tax [Appellate Tribunal] Rules, 1963, the additional grounds of appeal not set forth in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porated on 12.05.2008. The assessee company filed return of income for Assessment Year 2009-10 on 31.03.2010 which was processed under Section 143(1). Subsequently, based on information received from the Investigation Wing in the case of the company, the Assessing Officer found that large amount of cash deposits on various branches followed by transfer to account of various individuals and business within the bank and other banks were done by the assessee. The volume of cash transaction was estimated at Rs. 19 crore during the month of December, 2009. The Assessing Officer thereafter recorded detailed reason under Section 148(2) of the Act to conclude that chargeable income has escaped assessment. Notice under Section 148 was issued on 30.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s failed to pointedly demonstrate any specific carrying on of business to explain the nature of flow of funds in and out of the bank. The CIT(A) further noted that the assessee could not establish the carrying out any business activities as conventionally perceived. In the peculiar circumstances, the CIT(A) observed that concept of peak credit shall not apply in the instant case as the immediate nexus of flow of fund has not been established. Thus, the CIT(A) was of the view that entire deposit requires to be treated as income in the instant case instead of merely adding the peak sum as unexplained income since the assessee has not furnished any explanation in respect of flow of fund except some stray justifications. The CIT(A) thus enhance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moval of the name of the company from register of members. The AR for assessee rather attended the assessment proceedings and suppressed the crucial facts of such nature. The ld. DR further referred to the judgment rendered by the Hon'ble Delhi High Court in the case of Ravinder Kumar Aggarwal vs. ITO judgment dated 17.11.2022 in W.P.(C) 7122/2019 & CM APPL.29656/2019 and contended that it is a case of voluntary winding up and the existing liability of the assessee prior to such voluntary winding up will not dissolve by the act of the assessee to the detriment of the Revenue. Section 250 of the Companies Act, 2013 provides the safeguard in this regard. A reference was made to the decision of the Tribunal in the case of Dwarka Portfolio P. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onable opportunity of showing cause against any proposed enhancement to the Assessee. Thus, the CIT(A) is prevented from making enhancement to the assessed income without opportunity to the assessee. In view of the explicit provision in this regard, it is mandatory requirement of law to necessarily provide opportunity failing which the enhancement carried out is unsustainable in law. On a perusal of the order of the CIT(A), nowhere reference to such show cause or opportunity to assessee for carrying out enhancement is found. Therefore, the enhancement made by the CIT(A) is unsustainable in law. The enhancement so carried out by the CIT(A) thus stand reversed. 13. Ground No.1 of the appeal of the assessee is thus allowed. 14. As per Ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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