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2022 (8) TMI 193 - AT - Income TaxValidity of reassessment u/s. 147 - non-issuance of notice u/s. 143(2) - assessee filed letter beyond 30 days from the receipt of service of notice u/s. 148 - HELD THAT - Admittedly, there is no dispute with Ld. AR that the assessee filed letter which is beyond 30 days from the receipt of service of notice u/s. 148 of the Act, therefore, according to Ld. DR, no notice u/s. 143(2) is required to be issued in response to such letter, the AO treating the original return as on record, rightly issued notice u/s. 143(2) and 142(1) both dated 07-08-2012. Onus of filing of ROI on the assessee is a responsibility which is cast upon him to be fulfilled by him, if he fails to take benefit of any of the provisions of law, the assessee cannot plea that the notice u/s. 143(2) should have been issued. In the present case, the assessee filed a letter dated 18-01-2014 requesting to treat the original return of income as in response to notice u/s. 148 of the Act. Since, the same is beyond specified time the AO cannot take cognizance of the same and proceeded with the assessment considering the notices issued u/sec. 143(2) 142(1) of the Act on 07-08-2012. Therefore, the contention of Ld. AR that no notice u/s. 143(2) issued subsequent to the letter dated 18-01-2014 is not acceptable and rejected. Thus, the additional ground No. 1 raised by the assessee is dismissed. Addition on account of alleged cash receipts on sale of land - addition based on loose papers - HELD THAT - There had been no corroborative evidence and no adverse inference could be drawn against the assessee in terms of alleged entries of loose papers. Unless it is established on record that as a matter of fact the cash payment as alleged by the respondent-revenue did pass to the assessee from M/s. Krupa Land Pvt. Ltd. it cannot be said respondent-revenue had any right to make any addition. On perusal of the statement of Dilip Dherai no conclusion can be drawn that the entries in loose papers belongs to assessee representing cash payment. Even the CIT(A) clearly held in the impugned order AO squarely failed to carry out necessary investigation/enquiries from the buyer M/s. Krupa Land, meaning thereby, the CIT(A) also discredited the entries alleged to have been found in the seized loose papers of annexure 1-4, as dumb documents. When the seized loose papers Annexure 1 to 4 by itself, in our opinion, did not indicate receipt of alleged cash payment and no relevancy to the year under consideration, therefore, addition confirmed by the CIT-A to the extent of Rs. 3,33,06,667/- is not justified. Thus, ground raised by the assessee are allowed. CIT-A in applying ratio of 40 60 (cash cheque) without considering notings in the seized loose papers - HELD THAT - As no date and indication of nature of transaction with reference to figures mentioned therein is reflected. Further, the AO in his order observed that the assessee received payment on 15.10.2008 and 20.10.2008 which supports the view taken by us that the Annexure 4 is not relevant to the year under consideration. Further AO refers to Annexure 4 and held the last six figures of Rs. 9,28,72,500/- is matching with the amount of Rs. 78,72,500/- basing on which the CIT-A in the impugned order held that the assessee admitted to have been received 40% of cash amount amounting to Rs. 3,33,06,667/- which is very close to the figures of Rs. 20 lac plus Rs. 78,72,500/-, in our opinion, have no basis in view of his further observation that the AO squarely failed to carry out necessary investigation/enquiry from the buyer. Therefore, with the detailed discussion in assessee's appeal and the reasons above, we find the order of CIT-A is not justified and is set aside. Decided against revenue.
Issues Involved:
1. Validity of reassessment under Section 147 of the Income Tax Act due to non-issuance of notice under Section 143(2). 2. Confirmation of addition on account of alleged cash receipts on sale of land. 3. Application of ratio 40:60 (cash: cheque) by CIT(A) without considering notings in the seized loose papers. Issue-wise Detailed Analysis: 1. Validity of Reassessment under Section 147: The assessee raised an additional ground questioning the validity of reassessment under Section 147 due to non-issuance of notice under Section 143(2). The assessee argued that the issuance of notice under Section 143(2) is mandatory, and its non-issuance invalidates the reassessment. The Revenue contended that the assessee did not file the return of income within the prescribed time and thus, the issuance of notice under Section 143(2) was not required. Upon examining the facts, it was found that the assessee filed a letter requesting to treat the original return as the return in response to the notice under Section 148, beyond the specified time. Therefore, the AO proceeded with the assessment considering the notices issued under Sections 143(2) and 142(1). The Tribunal held that the additional ground raised by the assessee is not acceptable and dismissed it. 2. Confirmation of Addition on Account of Alleged Cash Receipts: The issue pertains to the confirmation of addition on account of alleged cash receipts from the sale of land to M/s. Krupa Land Ltd. During a search operation, incriminating evidence was gathered, indicating unaccounted cash receipts. The AO added an amount of Rs. 34.36 crores to the total income of the assessee based on these documents. The CIT(A) granted partial relief by confirming 40% of the cash amount and deleting the remaining addition. The assessee argued that the addition was based on statements and loose papers seized from a third party, which were not corroborated by any evidence. The Tribunal examined the seized documents and found that they did not conclusively indicate the receipt of cash by the assessee. The Tribunal held that the addition was made on mere suspicion and without any corroborative evidence. Therefore, the addition made by the AO and confirmed by the CIT(A) was deleted. 3. Application of Ratio 40:60 (Cash: Cheque) by CIT(A): The Revenue challenged the CIT(A)'s action of applying a 40:60 ratio (cash: cheque) without considering the notings in the seized loose papers. The Tribunal noted that the CIT(A) relied on Annexure 4, which was not relevant to the assessment year under consideration. The Tribunal reiterated that the seized documents did not indicate the receipt of cash by the assessee and were not relevant to the assessment year. Therefore, the Tribunal found the CIT(A)'s order to be unjustified and set it aside. Consequently, the grounds raised by the Revenue were dismissed. Conclusion: The Tribunal allowed the appeal of the assessee and dismissed the appeal of the Revenue. The reassessment under Section 147 was held valid, but the addition on account of alleged cash receipts was deleted due to lack of corroborative evidence. The CIT(A)'s application of the 40:60 ratio was also set aside as it was not justified based on the seized documents.
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