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TMI Blog2023 (7) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and are bad-in-law. - - 5. The assessee craves to add, amend, alter or delete any of the above grounds of appeals. Total tax effect (see note below) Rs. 18,28,550/- Condonation of Delay: 3. At the outset, we observe that the appeal is time-barred by 126 days. Before us, the counsel for the assessee submitted an application for condonation of delay, and argued that the reason for delay in filing appeal before ITAT was that the assessee was suffering from spinal injury and was advised complete bed rest by the doctors. In support of the above contention, the assessee also filed medical certificate with respect to the injury suffered by the assessee. Accordingly, in the interest of justice, we are hereby condoning the delay of 126 days in filing of the present appeal. On jurisdiction 4. On jurisdiction, the assessee has challenged the initiation of proceedings under section 147 of the Act. However, we observe that in the instant set of facts, there was a substantial cash deposit made by the assessee in his bank account. Further, the assessee has been non-filer of income tax return. It is a well-settled principle of law that for initiation of proceedings u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial facts, reopening of assessment was justified, SLP against said impugned order was liable to be dismissed. 4.2 In the case of Kottex Industries (P.) Ltd. v. ACIT [2021] 129 taxmann.com 151 (Gujarat), the Gujarat High Court held that at the time of recording the reason for satisfaction of Assessing Officer, there should be prima- facie some material on the basis of which, the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. It will be open to the assessee to prove that the assumption of fact made in the notice was erroneous at the time of assessment proceedings. 4.3 In the case of BharatkumarKalubhaiGhadiya [2021] 129 taxmann.com 306 (Gujarat), the High Gujarat Court observed that only a prima-facie belief is required for re-opening of assessment. The High Court made the following observations in this regard: 5.2 Further, the term "reason to believe", however, is not defined in the Act but it can be gathered and available from the information, leading the Assessing Officer to reopen the assessment. The term itself is suggestive of its prima-facie characteristics and not established or conclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, the ground of appeal no. 2 of the appellant is dismissed." 5. Accordingly, in our view, the AO had sufficient material to form a prima facie belief that there was escapement of income in the instant set of facts. Therefore, we find no infirmity in the order of Ld. CIT(Appeals) when he held that proceedings under section 147 of the Act were validly initiated, looking into the facts of the instant case. 6. In the result, Grounds Number 1 of the assessee's appeal is dismissed. On merits 7. The brief facts of the case are that during the course of assessment, the AO observed that the assessee had made cash deposits amounting to Rs. 32,70,525/- in his bank account and the assessee was asked to prove the source of deposit of the aforesaid amount. However, the assessee submitted that the aforesaid deposit belongs to financial year 2009-10 and that he did not remember each entries for the concerned year, as at the relevant time of assessment, the assessee did not have documents relating to cash deposit the bank account. Accordingly, in absence of any details/explanation put forth by the assessee, the entire deposits amounting to Rs. 32.70 lakhs was treated as unexplained income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant that the appellant had made subsequent withdrawals also. It is pleaded by the AR of the appellant that in case of deposit of cash in bank and subsequent withdrawals i.e. debit entries followed by credit entries, it is not correct to add entire amount of cash deposit to the income of the appellant. As per the AR addition should be made to the extent of profit element only which can be assumed at 8% as per the provision of section 44AD of the Act. In support of his contention, it is mentioned by the appellant's AR that in subsequent year also the appellant has shown business income and filed return accordingly. But this entire submission of the AR of the appellant is not supported by any evidence and relevant records. There is nothing on record to show that the deposits and withdrawals of cash amounts of Rs. 31,90,000/- were made in the bank account because of any business activities. It is not explained by the appellant's AR that which type of business activities were carried out by the appellant and from whom cash amounts were received because of such activities and to whom cash amounts were paid because of such activities. The name and address of the persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 32,55,500/- belong to FY 2009-10 and he did not remember each entries for the concern year as of now as he did not have documents related to cash deposited with him right now. Obviously, the appellant failed to explain the sources of cash deposits of Rs. 32,55,500/- and he himself admitted to the AO that he did not have any documents related to this cash deposits. Even at appellate stage also no any documentary evidences with regard to sources of cash deposits are filed by the appellant's AR. Considering all these facts, it is held that the appellant has failed to explain the sources of cash deposits of Rs. 32,55,500/- as made during the year under consideration. In view of the facts and circumstances of the case of the appellant as discussed in this appeal order, the various case laws as relied by the appellant are not applicable to his case. However, I agree with the contention of the appellant that in case of deposit of cash in bank and subsequent withdrawals i.e. debit entries followed by credit entries, it is not correct to add entire amount of Cash deposit to the income of the appellant. In my opinion the entire amount of credit side of Rs. 32,55,500/- cannot be added t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable percentage (in the range of 8% on presumptive basis) may be subject to tax in the hands of the assessee. 10. In response, the Ld. DR placed reliance on the observations made by Ld. CIT(Appeals) in the appellate order. He further submitted that though the assessee has filed return of income, however such return of income only pertains to subsequent assessment years and not to prior assessment years, and therefore it cannot be concluded that the cash deposits have been made out of agricultural produce. 11. We have heard the rival contentions and perused the material on record. We observe that while the assessee is averring that it has been earning agricultural income over the years and the said cash deposits is out of the said agricultural receipts, however, we note that there has been certain discrepancy regarding the statements made by the assessee before the Department at various stages of proceedings. Before the AO, the assessee gave no explanation regarding the source of cash deposits during the impugned assessment year. The Ld. CIT(Appeals) made a specific observation that there is discrepancy regarding the statement was made by the assessee, wherein on one hand the ..... 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