9911796707
TMI Blog2025 (5) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts and on the circumstances of the case, the AO was justified in reopening of the case. (2) Whether on facts and on circumstances, the ld. CIT(A) erred in confirming the addition of Rs. 3,53,884/-." 2. Brief facts of the case are that, assessee is an individual and allegedly engaged in repairing and maintenance of automobiles in the name of "Raju Auto Garage", filed his return of income for the A.Y. 2014-15 on 20.02.2015 declaring income of Rs. 1,91,350/-. Initially, return was not selected for scrutiny. Subsequently, case of assessee was reopened under section 147 of the Income Tax Act, 1961. Case was reopened on the basis of information received from ITO, Ward-27(1)(3), Mumbai that assessee is one of the members in Himachal Mitra Mandal Co-op Credit Society and during the year under consideration he made cash deposits of Rs. 5,87,678/- in his bank accounts. Notice under section 148 of the Act dated 31.03.2021 was issued to the assessee. The Assessing Officer issued show-cause notice to the assessee through ITBA Portal for seeking reply of assessee about source of cash deposits and copy of bank statements of all other bank accounts. The Assessing Officer recorded tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, in response to notice dated 29.12.2021 the assessee submitted documents alongwith computation of income, profit and loss account from business showing business income, which was not considered by the Assessing Officer and completed the assessment by determining total assessed income of Rs. 5,45,234/- and thereby made addition of Rs. 3,53,884/- against the original returned income of Rs. 1,91,350/-. While making such assessment the Assessing Officer made addition of closing balance in Bank of India of Rs. 97,704/-, closing balance in State Bank of India of Rs. 13,580/- and closing balance in Himachal Mitra Mandal Co-op Credit Society of Rs. 3,80,445/-, interest on Fixed Deposits (FD)from Himachal Mitra Mandal Coop Credit Society of Rs. 33,600/- total of which were Rs. 5,45,234/-. From total receipt of Rs. 545,234/- the Assessing Officer reduced the net taxable income offered by the assessee, thereby made addition of Rs. 3,53,884/-. The assessee further stated that he is in the business of repairing and maintenance of bike and auto at Shop No.21, Plot No. 76, sector 17. J.K. Chambers, Vashi, Navi Mumbai. In the business the assessee getting 100% cash from his repair and mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account, on the basis of such observations, ld.CIT(A) upheld the addition made by the Assessing Officer. Further, Aggrieved the assessee has filed present appeal before the Tribunal. 5. We have heard the submissions of Learned Authorised Representative (Ld.AR) of the assessee and Learned Senior Departmental Representative (Sr.DR) for the revenue. Ld.AR of the assessee also filed short written synopsis on our directions. During the hearing of the appeal, the ld AR of the assessee fairly submitted that impugned order by ld CIT(A) was passed on 17.12.2022, however, this appeal before Tribunal was filed on 09.01.2025, thus there is delay of two year and thirty days. The assessee has already filed application for condonation of delay in the form of affidavit. The ld AR of the assessee submits that delay in filing appeal is neither intentional or deliberate. The assessee is a man of small means and was not aware of technicalities of tax laws and was dependent on his consultant. His consultant took time to file appeal before Tribunal. The assessee is really interested in persuing his case on merit and would suffer prejudice if the delay in filing appeal is not condoned. In support of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d has paid tax thereon. Thus, before finalizing the assessment order, the assessee has paid more tax than the liability. Once the assessee has already considered all the receipts in computing the total tax liability and has paid the tax thereon, therefore no addition on account of cash deposits to be made. The ld.CIT(A) confirmed the action of Assessing Officer without appreciating the fact. 7. On the other hand, Learned Senior Departmental Representative (Sr.DR) for the revenue supported the orders of lower authorities. Against the plea of condonation of delay, the ld Sr DR for the revenue submits that the assessee is relying on self-serving story. The delay in filing appeal is inordinate and may not be condoned. On merits of the addition, the Sr.DR for the revenue submits that no supporting documents to substantiate the cash deposit with Himachal Mitra Mandal Co-op Credit Society were furnished. Since the assessee failed to substantiate the cash deposits therefore, the Assessing Officer added such deposit under section 68 of the Act. The assessee took the plea of business receipt, no evidence of such business activity was filed by the assessee. The assessee filed revised computa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit Society. The assessing officer after recording reasons of reopening and serving notice under section 143(2)/ 142 proposed to make addition of such cash deposits by taking view that the assessee has not offered any explanation about the nature and source of such deposits. On service of draft assessment order, the assessee submitted that there were total cash deposits in Himachal Mitra Mandal Co-op Credit Society of Rs. 3,80,445/-. Apart from such deposits, the assessee also earned interest from Himachal Mitra Mandal Co-op Credit Society of Rs. 19,905/-, income from house property of Rs. 33,600/- and deposit in Bank of India of Rs. 13,580/- and deposit in State Bank of India of Rs. 97,705/-, thus aggregating of total receipt of Rs. 5,45,234/-. On considering such plea, the Assessing Officer took his view that the assessee shown taxable income of Rs. 1,91,350/-, therefore Rs. 3,53,884/- (Rs.54,5,234/- - Rs. 1,91,350/-) is undisclosed income of assessee. Though, taxing the entire deposits or total receipt is not proper, as all receipt cannot be income, when the assessee took the plea that he was doing some business activities. We find that the Assessing Officer while making addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 8,42,400/- and has also paid tax on the same. Given the nature of business of the assessee there is merit in the submission that the cash deposited is out of the gross receipts and that once gross receipts are disputed then no addition is sustainable under section 68 of the Act. In view of these discussions and considering the facts peculiar to the assessee we hold that the ld CIT(A) is not correct in sustaining the addition without considering the revised gross receipts declared by the assessee and the tax paid thereon. In the result, the substantial ground No.1 of the appeal is allowed. 12. So far as ground relates with the reopening is concerned, we find that the assessing officer has sufficient information of making belief that income of the assessee has escape assessment. Neither the assessee objected at the time of reopening nor file return of income in response to notice under section 148. Rather, the assessee himself offered amount of cash credit in the undisclosed bank account for taxation. In the result, the ground of appeal related with the reopening is dismissed. 13. In the result, appeal of the assessee is partly allowed. Order pronounced in the open Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
