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2018 (9) TMI 1748 - AT - Income TaxReopening of assessment - requirement of issuing notice under section 142(1) - Held that - Assessing Officer has raised queries from time to time for making assessment, however the assessee submitted only part information particularly in respect of the sale transactions. We do not find any illegality in the assessment proceedings, which is fatal for annulling the entire assessment proceedings, particularly when a copy of the reasons recorded was already provided to the assessee and all the queries in respect of the addition in dispute have been raised during the assessment proceedings. No violation of the principle of the natural Justice. Whereas we find that the assessee has played game of hide and seek and accepted the undisclosed income pointed out either by the Assessing Officer or by the CIT(A) when she found herself cornered. Assessing Officer has complied the requirement of issuing notice under section 142(1) and thus, the conditions of completing the assessment under section 144 are fulfilled. In absence of any return of income filed by the assessee in response to notice under section 148 of the Act, the Assessing Officer was justified in completing the assessment under section 144 of the Act. Addition u/s 68 - Held that - Where such deposits are not appearing in books of accounts and, therefore, section 68 becomes inapplicable. Here the origin of investigation is the bank account, however, before the Ld. CIT(A) the assessee has submitted complete statement of accounts of the said deposits in bank account. In aforesaid facts and circumstances, the said sum are definitely credited in books of accounts and the assessee cannot be allowed to take shelter of the precedents, which are not applicable in the facts of the instant case. In the case of Ms. Mayawati (supra), the issue involved was of certain gifts received in cash, which were taxed by the AO under section 69 of the Act, and thus, the ratio of the said decision is not applicable over the facts of the instant case. In view of the aforesaid discussing, we do not find any infirmity in the action of the Ld. CIT(A) in sustaining the addition under section 68. Unexplained cash deposits - Held that - In the instant case, the Ld. CIT(A) has properly analyzed the facts in respect of the deposits appearing in the bank account and reconciled the same with the business profit and made addition of undisclosed income for the amount which could not be reconciled with the business profit . Keeping in view the above judicial position, we are of the opinion that the addition sustained by the Ld. CIT(A) is in respect of the source of income already assessed by the Assessing Officer. In view of the aforesaid discussion, the ground No. 5 raised by the assessee is dismissed. Addition u/s 68 - sufficient cash in hand was available with the assessee at the relevant point of time - Held that - Counsel could not point out particular amount of the advance received, which has not been considered by the Ld. CIT(A). The Ld. counsel has made a general statement and not pointed out any specific error in the finding of the Ld. CIT(A) on this issue. In absence of any specific error in the amount of cash receipts considered by the Ld. CIT(A) for explaining the cash deposits, we do not find any infirmity in the order of the Ld. CIT(A) and accordingly we uphold the same. The ground No. 6 of the appeal raised by the assessee is, accordingly dismissed.
Issues Involved:
1. Validity of the assessment order. 2. Requirement of notice under section 143(2) of the Income Tax Act. 3. Justification of additions under section 68 of the Income Tax Act. 4. Powers of the Commissioner of Income Tax (Appeals) [CIT(A)] in making additions. 5. Availability of sufficient cash in hand for unexplained deposits. 6. Verification of returned advances to buyers. Detailed Analysis: 1. Validity of the Assessment Order: The assessee contended that the assessment order was void ab initio, invalid, and illegal due to procedural lapses. The Tribunal observed that the assessment was completed within 26 days from the issuance of notice under section 148. The assessee argued that this quick completion violated principles of natural justice. However, the Tribunal noted that the assessee was given adequate opportunities to present their case and provide necessary documents. The Tribunal found no error in the Assessing Officer (AO) completing the assessment before the limitation date and rejected the contention of the assessee regarding the violation of natural justice principles. 2. Requirement of Notice under Section 143(2): The assessee argued that if the computation filed was considered a valid return, then a notice under section 143(2) should have been issued, making the assessment invalid in its absence. The Tribunal found that the assessee failed to file a return of income in response to the notice under section 148. The Tribunal held that without a return of income, the AO was not required to issue a notice under section 143(2) before completing the assessment under section 147. The Tribunal also noted that the AO's mention of section 143(3) instead of section 144 was a curable mistake under section 292B and did not invalidate the assessment. 3. Justification of Additions under Section 68: The assessee challenged the additions made under section 68, arguing that the sums were found deposited in bank accounts, not in books of accounts, and should have been made under section 69 instead. The Tribunal held that the deposits were explained as advances received against the sale of plots and were accounted for in the books of accounts. Therefore, the additions under section 68 were justified, and the Tribunal dismissed the assessee's contention. 4. Powers of the CIT(A) in Making Additions: The assessee contended that the CIT(A) exceeded his powers by making additions under section 68. The Tribunal noted that the CIT(A) has plenary powers coterminous with those of the AO and can enhance the assessment within the scope of the AO's assessment. The Tribunal found that the CIT(A) properly analyzed the facts and reconciled the bank deposits with the business profits, sustaining the addition of undisclosed income. The Tribunal upheld the CIT(A)'s action and dismissed the assessee's contention. 5. Availability of Sufficient Cash in Hand for Unexplained Deposits: The assessee argued that sufficient cash was available to explain the deposits of ?36,611 and ?15,15,600. The Tribunal found that the CIT(A) had considered all cash receipts while sustaining the additions and that the assessee failed to point out any specific error in the CIT(A)'s findings. The Tribunal upheld the CIT(A)'s order, dismissing the assessee's contention. 6. Verification of Returned Advances to Buyers: The assessee claimed that the CIT(A) confirmed the addition of ?89,75,305 without verifying the returned advances to buyers. The Tribunal noted that the assessee provided no evidence of returning the advances, such as confirmations from parties or bank statements. The Tribunal held that the onus was on the assessee to provide such evidence and rejected the request to restore the matter to the AO for verification. The Tribunal dismissed the assessee's contention. Conclusion: The Tribunal dismissed the appeal of the assessee, upholding the assessment order and the additions made by the AO and CIT(A). The Tribunal found that the procedural requirements were met, and the assessee failed to provide sufficient evidence to support their claims. The assessment was deemed valid, and the additions were justified.
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