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TMI Blog2025 (4) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... is of audited books of accounts and the same was processed u/s 143(1). 4. The sequence leading to reopening of the case u/s 148 are that the notice u/s 133(6), dated 08.02.20219 was received from the ITO, Nabha for verification of financial transactions with regard to cash deposits in the regular bank accounts of the assessee, to which, the assessee replied by way of letter, dated 18.02.2019 and furnished the copies of the bank statements of his business where the cash deposit was there and it Was further stated as under: - "The source of cash deposits in the banks is mainly out of cash sales and receipts from sundry debtors. The cash deposits have been duly accounted for in the books of accounts." 5. Thereafter, nothing was received from the AO. Notice u/s 148, dated 28.03,2019 was issued by the ITO, Ward- Nabha for Assessment year under consideration for which, the return was filed in response to notice and copy of the reasons as may have been recorded was asked for. 6 Before us, the following grounds of appeals have been taken:- "1. That the Ld. CIT(A), NFAC, Delhi has erred in confirming the order of the Assessing Officer, Circle Mandi Gobindgarh in the reassessment proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that finding deserves to be set aside and the assessment as framed u/s 148 deserves to be quashed. b). Notwithstanding, the above said ground of appeals, the ITO, Ward Nabha who had issued the notice u/s 148 on 28.03.2019, did not have any valid jurisdiction to issue the notice u/s 148 as the jurisdiction of the assessee lies with the ACIT/DCIT, Mandi Gobindgarh and on the strength of notice u/s 148 as issued by non- jurisdictional ITO, Ward Nabha, the assessment so framed u/s 148/143(3) by the ACIT/DCIT, Mandi Gobindgarh, deserves to be quashed. 5. Notwithstanding the above said ground of appeal, the notice u/s 148 having been issued beyond four years without there being any tangible material on record, deserves to be quashed, irrespective of the fact, whether the assessment have been framed within four years or beyond four years and, as such, the reopening having been merely made on account of change of opinion, which is not permitted as per binding judgment of Madras High Court in the case as reported in 447 ITR 357, which has been confirmed by the 'Apex Court' in 447 ITR 370 and also by way of judgment of 'Apex Court' in the case of 'Kalpataru Land Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer have failed to appreciate that there was requisite stocks available with the assessee in respect of 'Combines' and 'spare parts' out of which, the sales have been made and the balance closing stock as on 31.03.2012 have been accepted by the Assessing Officer and the balance stock Carried forward to next year, which stands accepted and, as such, in view of the binding judgment of Hon'ble Delhi High Court in the case of Akshit Kumar, 197 DTR 121, Agson Global (P) Ltd., 65 taxmann.com 51 (Delhi) and judgment of Jurisdictional Chandigarh Bench in the case of 'Charu Aggarwal', Fashion Zone, no such addition on account of cash deposits out of sale proceeds recorded in the books of accounts is called for. c). That the confirmation of addition by the CIT(A) is again illegal/arbitrary because the addition as made by the Assessing Officer of the sales as recorded in the books of treated, as alleged unexplained cash credits, which is unlawful since, the sales recorded in the books of accounts cannot be subject matter of addition as 'unexplained credit'. 12. Notwithstanding the above said ground of appeal, the addition of Rs. 12,39,90,680 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o failure on the part of the assessee. 10.1 It was further argued that wrong reason to believe have been formed by the Assessing Officer for reopening of the case. Since the deposit in the bank accounts were only to the tune of Rs. 12,39,90,680/-, for which, the addition has been made by the Assessing Officer. 11. The Ld. Counsel of the assessee relied upon a number of judgments of the Jurisdictional Bench of the ITAT, Chandigarh Bench and Gujarat High Court and Bombay High Court in the following cases : S.No. Name of Judgement 1. Judgment of The Hon'ble Jurisdictional Bench of ITAT Chandigarh in the case of Smt. Monika Rani in ITA no. 582/chd/2019 dated 28.02.2020. 2. Judgement of the Hon'ble Amritsar Bench, of ITAT Amritsar (Jalandhar Camp), in the case of Gaurav Joshi Vs. ITO as reported at (2019) 55 CCH 0083. 3. Hon'ble Jurisdictional High Court in the case of CIT vs. Atlas Cycle Industries reported at 180ITR 319. 4. Sagar Enterprises vs. ACIT (2002) 257 ITR 335 (Gujarat High Court) 5. Harjeet Singh Vs ITO (ITAT Delhi), order dated 12.11.2018, in ITA No. 2013/DEL/2015 6. KMV Collegiate Sr. Sec. School v. ITO (2017) 163ITD 653 (Asr.) (Trib.) 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed as per following judgments:- i). Shiva Exports Vs ITO, 27 CCH 742 (Chd. Trib.) ii). CIT Vs Orient Crafts Ltd. reported in 354 ITR 536 (Delhi High Court) iii) Samrat Plywood Ltd. Vs ACIT, 87 ITR (Trib.) 102 (Chandigarh) Thus, it was argued that the notice u/s 148 be quashed both on account of jurisdiction and on wrong reason to believe and non-application of independent mind by the AO. 12. On merits, the assessee has taken the ground of appeals from ground No.7 to ground No. 12. It was argued before us that during the course of assessment proceedings, the questionnaire was issued, dated 19.11.2019 with regard to source of cash deposit of Rs. 12,39,90,680/-, against the alleged cash deposits mentioned in the reasons recorded u/s 148 to the tune of Rs. 18,52,71,560/-, copy of which is placed at paper book. The details of cash receipt from various parties on account of sale of Harvester Combines, spare parts was filed. It was further submitted that in case of any further verification is required then, opportunity be afforded to the assessee. Copies of the bank accounts from the books of accounts were submitted. However, no further query was raised by the AO and the AO made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o argued that once, the sales have been accepted and cash sales have been deposited in the bank accounts of the assessee, then, there is no justification of making the addition on account of cash credit:- i). Fashion Zone Vs DCI in ITA No. 331/Chd/2023, dated 20.03.2024. ii). ACIT Vs Mahendra Kumar Agarwal as reported in (2023) 104 ITR (Trib.) 455 (Jaipur). iii). ACIT Vs Chandra Surana, reported in(2023) 104 ITR (Trib.) 503 (Jaipur) iv). Mahesh Kumar Gupta Vs ACIT in 151 taxmann.com 339 (Jaipur Trib.) Thus, in nutshell, it was argued that both on jurisdictional issue and on merits, the Ld. CIT(A) was not justified in dismissing the appeal of the assessee. 13. The Ld. CIT(DR) justified the action of the AO in issuing the notice u/s 148 by ITO, Nabha and also argued that even if, the case has been transferred to ACIT/DCIT, Mandi Gobindgarh, the concerned Officer at Mandi Gobindgarh has rightly framed the assessment. It was further argued that original assessment has been framed u/s 143(1) and no opinion has been expressed and, as such, the AO was fully justified in reopening the case u/s 148 after due application of mind. With regard to wrong figure of cash deposits mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashed and while delivering that judgment, the following finding had been recorded in the case of 'Raman Pillai': i). The DCIT Vs Sh.Manjeet Singh, as reported in ITA No.312/Chd/2022 (ITAT Chandigarh, dated 15.10.2024). "15. We have considered the arguments of Id. Counsel of the assessee and the Id. DR as well as the brief synopsis and written submissions along with the judgments relied upon by both the sides and also the various case laws as cited before us. It is a fact borne out from record that prior to the issue of notice u/s 148 vide notice dated 28.03.2019 for the assessment year under consideration that the assessee is a non-resident as per the facts stated above by the Id. Counsel and the documents submitted before us for Assessment Year 2011 -12. It is also a fact that the assessee is a citizen of USA and is holding American Passport and notice u/s 148 was issued by the non-jurisdictional ITO and as per the judgment of the Delhi ITAT in the case of Mukesh Kumar and of the Chandigarh Bench and Delhi Bench of the ITAT and the other judgments of the Bombay High Court and Rajasthan H ;h Court, as cited supra, we have no hesitation in holding that the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer, because in the reason so recorded, the amount of cash deposits has been mentioned at Rs. 18,52,71,560/- and which was in actual Rs. 12,39,90,680/- Assessee's reliance on various judgments, are very much relevant to the facts and circumstances of the case and in the judgment of Gaurav Joshi in ITA No. 274/Asr/2018, reported in 197 TTJ, 946, similar facts were there, wherein, the cash deposits in assessee's bank account was less than the amount mentioned in the reopening notice and it was held that the reasons recorded by the AO were not emerging from the record available with him and the AO having recorded the reasons which were not found to be valid and, therefore, the reassessment framed was quashed. Similar finding has been given in various other judgments. The Chandigarh Bench of the ITAT, in Baba Kartar Singh Dukhi Educational Trust and Others as cited above, the findings are the same. 17. On merits of the case, it is a fact that during the course of proceedings u/s 133 (6) and later on, assessee had submitted the correct cash deposits in the Bank accounts, which was stated to be out of the sales of Harvester Combines and its spares and such sales have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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