TMI Blog2023 (2) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... n/Soiled/Mutilated notes to the bank account and he is required to withdraw amounts from the bank account for the purpose of giving the same in exchange to its customer and clients. Therefore we declined to approve basis taken by the AO for making addition of entire cash deposited to the bank accounts of the assessee and ignoring the high amount of cash withdrawn by the assessee for the purpose of its business. Therefore addition made by the AO and upheld by the Ld. CIT(A) has no legs to stand. Our above noted conclusion also gets strong support from the judgement of Sona Electric Co. [ 1984 (2) TMI 37 - DELHI HIGH COURT] and Mrs. Deepali Sehgal [ 2014 (9) TMI 1073 - ITAT DELHI] and Smt. Parminder Kaur Matharoo [ 2022 (11) TMI 779 - ITAT DELHI] to hold that the addition made by the AO u/s 68 of the Act is not sustainable - Assessee appeal allowed. - SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER, AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER For the Assessee: Shri C.S Anand, Advocate For the Revenue : Shri Kanv Bali, Sr.DR ORDER PER CHANDRA MOHAN GARG, J.M. This appeal filed by the assessee is directed against the order dated 12.09.2019 of the Ld. CIT(A), New Delhi, relating to Assessment Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much influenced with the representation made by the Id AO vide his application for admission of additional evidences . 11. That the Id CIT(A) has erred in admitting the Id AO's application for admission of additional evidences, particularly when copies of the same were not provided to the assessee. Ground No. 1 to 6 3. Apropos ground 1 to 6 of assessee the learned counsel submitted that from the copy of the reasons recorded by the AO for initiating proceedings u/s. 147 of Income Tax 1961 (for short the Act ), available at page no. 1 to 5 of assessee paper book, from column 8 at page no. 1 it is discernable that the Assessing Officer proceeded to initiate proceedings on the assumption that the assessee has not filed any return of income for relevant A.Y. 2011- 12. The learned AR further drew our attentions towards page no. 2 that is reasons para 2 and 7 and submitted that the Assessing Officer, in the reasons clearly stated that the assessee has not filed its return of income for A.Y. 2011-12 even after sufficient opportunity for filing the same. The learned AR further pointed out that despite the fact that the assessee filed return of income for A.Y. 2011-12 on 02.07.2012 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of RMG Polyvinyl [I] Ltd 396 ITR 5. The relevant facts of that case are as under: 4. Notice under Section 147 of the Act was issued by the AO to the Assessee on 25th March, 2011. The following reasons for the re- opening were furnished to the Assessee for reopening the assessment: 11. Reasons for the belief Information has been received from the that Information has income has escaped Investigation Wing of been received from the Income-tax assessment. Department income has escaped that M/s Pine View Construction Traders Investigation Wing of Pvt. Ltd. is a beneficiary of accommodation the Income-tax entries received from certain established assessment entry operators identified by the Investigation Wing during the period relevant to A. Y 2004-05. A comprehensive investigation was carried out by the Investigation Wing for identification of entry operators engaged in the business of money laundering for the beneficiaries and on the basis of investigation carried out and evidences collected, a detailed report has been forwarded. In the instant case, the assessee is found to be the beneficiary of accommodation entry from such entry operators as per the transaction mentioned in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d there was some clerical error as certain single transactions were appearing in multiple and this resulted in working of the escaped income to the extent of Rs.1,56,00,000/-. However, the same has now been considered and stands corrected for the purposes of completion of proceedings. 7. In para 3.1 of the above assessment order, the AO has set out the information received from the Investigation Wing regarding the alleged bogus accommodation entries pertaining to 16 entities which sum in the aggregate works out to Rs. 78 lakhs. 8. Mr. Ruchir Bhatia, learned Senior Standing Counsel for the Revenue, relied on the decisions in Income-Tax Officer v. Selected Dalurband Coal Co. Pvt. Ltd. (1996) 217 ITR 597 and ITO v. Purushottam Das Bangur (1997) 224 ITR 362 to urge that at the stage of reopening of the assessment, the AO is not expected to undertake any detailed inquiry; it was sufficient if on the basis of the information received he was prima facie satisfied that a case was made out for reopening the assessment as income had escaped assessment. 9. However, in neither of the above cases are the facts similar to those in the present case. The two glaring errors in the reasons in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee is engaged in the business of Exchange of Torn/Soiled/Mutilated Indian Currency Notes into New/Fresh and vice-versa on discount/commission basis. The learned counsel further submitted that the assessee during the course of reassessment proceedings clarified to AO that torn currency notes were deposited with normal currency notes while providing date wise details of cash withdrawn and cash deposited in the bank account. The learned counsel further submitted that the assessee used to withdraw cash out of its bank account and used to deposit the cash in its bank accounts from time to time and the cash transactions were duly recorded in the cash book available at page no. 14 to 39 of assessee s paper book. The learned counsel further pointed out that at no point of time during FY 2010-11there was any negative cash balance and the opening cash in hand/stock was of Rs. 68,99,594/- which was reflected in the balance sheet as on 31.03.2010 and brought as opening balance on 01.04.2010. The learned counsel further explained that the closing cash in hand/stock was Rs. 1,58,45,705/- which amount was reflected in the balance sheet on 31.03.2011 as cash in hand/stock. The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - which was the total amount of cash deposited to the two bank accounts of the assessee. The learned Senior DR could not controvert that the assessee also withdrew Rs. 1,99,30,000/- from the same bank accounts during FY 2010-11. When the assessee is in the business of exchange of old Torn/Soiled/Mutilated currency noted then the modus operandi of business would be the same as stated by the learned counsel of the assessee that is the assessee has to deposit old Torn/Soiled/Mutilated notes to the bank account and he is required to withdraw amounts from the bank account for the purpose of giving the same in exchange to its customer and clients. Therefore we declined to approve basis taken by the AO for making addition of entire cash deposited to the bank accounts of the assessee and ignoring the high amount of cash withdrawn by the assessee for the purpose of its business. Therefore addition made by the AO and upheld by the Ld. CIT(A) has no legs to stand. Our above noted conclusion also gets strong support from the judgement of the Hon ble Delhi High Court in the case of Sona Electric Co. Vs. CIT (supra) and orders of ITAT Delhi Bench in the case of ITO vs. Mrs. Deepali Sehgal and Sm ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
