9911796707
TMI Blog2025 (3) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... fly stated the facts of the case are that a survey was conducted at M/s. Xentrix Studios Pvt. Ltd. on 4.5.2017. A sworn statement was recorded from Shri D.S. Nandish u/s. 131 of the Act. Shri D.S. Nandish was questioned about the origins of cash deposits in various bank accounts associated with entities closely linked to him. He admitted his inability to account for these deposits and voluntarily offered to declare the unexplained cash as income for the respective entities. The unaccounted cash deposits in the assessee company's account amounted to Rs. 32,71,500 for AY 2013-14 Rs. 22,84,500 for AY 2014-15 and Rs. 1,05,06,500 for AY 2015-16. 4. A search was conducted on 28.8.2017 in the case of Mr. D.S. Nandish. During the course of statement u/s. 132(4), Mr. Nandish reaffirmed the statement recorded u/s. 131 of the Act and agreed to disclose additional income towards unexplained cash deposits. Accordingly the AO made addition u/s. 68 of the Act. Further the AO noted from the financial statements submitted by the Director during the scrutiny proceedings that the assessee has sundry creditors in the balance sheet and assessee has paid interest on such creditors. The assessee was ask ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. The notice has been issued u/s 148 on the basis of statements recorded during the survey proceedings which is very much clear from the copy of reasons recorded but not on the basis of search, therefore the arguments advanced by the ld. AR regarding its validity is not correct. The ld. CIT(A) has incorporated in his order the reasons recorded and copy of approval granted by the Pr.CIT u/s. 151 of the Act. The ld. DR relied on the order in the case of Singhad Education Society reported in [2017] 84 taxmann.com 290 (SC) and the judgment in the case of Abhisar Buildwell (supra) at para no.3.1 (iii). She further submitted that the AO before reopening the case has followed the procedure in entirety. The DIN is also quoted in the respective documents. She further submitted that during the course of assessment proceedings, the assessee was unable to provide the details of cash deposits in terms of section 68 of the Act. She further submitted that in the case of interest payment, the assessee has not deducted TDS and genuineness of the payment is also doubted. Therefore, the AO has also doubted the genuineness of expenditure incurred by the assessee for want of proper evidence. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the Fin Year 2012-13. In absence of any books of accounts, documentary evidence or explanation to show the sources of unaccounted cash deposits, Mr D S Nandish admitted to disclose an additional income of Rs. 32,22,000/- in the hands of M/s N 9 Sports & Leisure Holdings P Ltd in the capacity of promoter/director of the company. 3. Analysis of information collected/ received : From the above information received, it is clear that M/s N 9 Sports & Leisure Holdings P Ltd was having other income for Asst Year 2013-14 and had not declared the same in its return of income. 4. Enquiries made by the AO as sequel to information collected /received : On verification from the ITD system, it is found that return of income filed for Asst Year 2013-14 by the assessee company does not declared its true income. 5. Findings of the AO : It is found that the assessee is having bank account no. 845603477 with Axis Bank, Karthik nagar, Bangalore. There were total cash deposits of Rs. 32,71,500/- in bank account during the period 01.04.2012 to 31.03.2013. A copy of bank statement for the period 01.04.2012 to 31.03.2013 is on record. Further, it is seen that the assessee has made many transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year : [Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:" 10. From the above section it is clear that the pre-condition to invoke section 68 is any sum found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof. The assessing officer is very much sure wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO which are not part of the very basis for reopening or part of the reasons recorded, therefore during the course of reassessment proceedings any further addition is made by AO is also not sustainable. Our view is supported by the decision of the coordinate Bench of ITAT Agra reported in [2014] 41 taxmann.com 380 in the case of Asha Kansal wherein it is held as under:- "7. Section 147 provides that if the Assessing Officer has reasons to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income "and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of proceedings under this section." Explanation 3 to Section 147 inserted by Finance Act 2009 specifically provides that the "Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue has come to the notice subsequently in the course of proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under such Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med a reason to believe that it has escaped assessment. Hence, the language which has been used by Parliament is indicative of the position that the assessment or reassessment must be in respect of the income in respect of which he has formed a reason to believe that it has escaped assessment and also in respect of any other income which comes to his notice subsequently during the course of the proceedings as having escaped assessment. If the income, the escapement of which was the basis of the formation of the season to believe is not assessed or reassessed, it would not be open to the Assessing Officer to independently assess only that income which comes to his notice subsequently in the course of the proceedings under the section as having escaped assessment. If upon the issuance of a notice under section 148(2), the Assessing Officer accepts the objections of the assessee and does not assess or reassess the income which was the basis of the notice, it would not be open to him to assess income under some other issue independently. Parliament when it enacted the provisions of section 147 with effect from 1-4-1989 clearly stipulated that the Assessing Officer has to assess or reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by any other mode, even a whisper against such findings which have thus reached finality. While on this issue, it is also important to note that, as is the settled legal position, the reasons recorded for reopening the assessment are to be read exactly as these are recorded and it cannot be open to the Assessing Officer to fill in the gaps, even if any, while justifying the reassessment proceedings. Nothing can be added to these reasons nor anything can be deleted from the same. To highlight this aspect of the matter, we may refer to the following observations made by their Lordships in the case of Prashant S. Joshi v. ITO [2010] 324 ITR 154/189 Taxman 1 (Bom.). 'Sec. 147 provides that if the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may subject to the provisions of ss. 148 to 163, assess or reassess such income and also any other income chargeable to tax, which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. The first proviso to s. 147 has no application in the facts of this case. The basic postulate which underlines s. 147 is the formati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .B. Wadkar [2004] 268 ITR 332/137 Taxman 479 (Bom): ".....the reasons are required to be read as they were recorded by the AO. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the AO to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of mind of the AO. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide link between conclusion and evidence. The reasons recorded must be based on evidence. The AO, in the event of challenge to the reasons must be able to justify the same based on material available on record. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the AO cannot be supplemented by filing affidavit of making oral submission, otherwise, the reasons which are lacking in material particulars would get supplemente ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
