2023 (5) TMI 1095 - AT - Income Tax

Unexplained cash deposits - HELD THAT - As assessee need to be given one more opportunity to adduce evidence from Shri Indrajeet Chaterjee that after withdrawal of amount he has deposited the same in assessee s/proprietary bank account as contended by assessee even though we are aware that assessee has changed the source of income from sale of cattle etc - set aside the impugned order of Ld. CIT(A) and restore the appeal back to the file of Ld. CIT(A) to decide afresh the issue as observed . Unexplained cash credit - HELD THAT - As the source of Rs.9.60 Lakhs stands proved and since its nature of transaction is loan as noted by AO in his remand report, it cannot be taxed. And since AO has accepted that Rs.10 Lakhs has been offered by assessee as income in his remand report as well as the fact that assessee has offered the same for taxation. Therefore Rs.9.60 Lakhs and Rs.10 Lakhs ought to have been deleted by the Ld. CIT(A) as observed in the remand report of AO. Therefore, we direct deletion of addition of Rs.19.60 Lakhs. Thus, Rs.19.60 Lakhs stands explained, so Rs.19.60 Lakhs is directed to be deleted; and the addition of Rs.4.73 crores is set aside back to Ld. CIT(A) as directed. CIT-A power to issue directions to AO to reopen the assessment for earlier/subsequent AYs - Action of the Ld. CIT(A) directing the AO to assess the unexplained cash credit in the year in which it was received u/s150(1) - whether, while disposing of the assessee s appeal for Assessment Year 2013-14, whether the Ld. CIT(A) has power to give directions to the AO to reopen the assessment for any other Assessment Year s? - HELD THAT - As per case of N. KT. Sivalingam Chettiar 1967 (3) TMI 16 - SUPREME COURT observed that a finding within the second proviso to section 34(3) must be necessary for giving relief in respect of the assessment of the year in question; and that the word finding only covers material questions which arise in a particular case for decision by the authority hearing the case or appeal which, being necessary for the subject of the controversy between the interested parties, or on which the parties concerned have been given a hearing. Since no decision contrary to the above case laws has been brought to our notice, respectfully following the above decision of the Hon'ble Supreme Court, High Courts and the Tribunal in M/s. Sahara City Homes, Bareilly 2022 (2) TMI 171 - ITAT LUCKNOW we are of the view that the Ld. CIT(A) had no power to issue directions to the Assessing Officer to reopen the assessment for earlier/subsequent Assessment Years which was not in appeal before him.

Summary

Issues Involved:
1. Addition of Rs.75,94,000/- on account of unexplained cash deposits.
2. Addition of Rs.4,92,60,000/- on account of unexplained cash credit.
3. Not directing the AO to delete the addition of Rs.6,93,02,104/- which does not relate to the assessment year 2013-14.
4. Directing the AO to assess the unexplained cash credit in the years the loan was received.

Summary:

1. Addition of Rs.75,94,000/- on account of unexplained cash deposits:
The assessee filed a return declaring an income of Rs.12,62,258/-. The AO noted unexplained cash deposits of Rs.75,94,000/- and demanded the source. The assessee initially claimed the source was from agricultural income and sale of cattle, which the AO rejected. During the appellate proceedings, the assessee provided additional evidence, claiming Rs.70,00,000/- was deposited by Shri Indrajit Chatterjee after withdrawing it from the bank account of M/s. BR Entertainment. The AO did not accept this explanation due to lack of supporting evidence. The Tribunal decided to give the assessee another opportunity to provide evidence supporting the claim that the cash deposits were sourced from the withdrawals made by Shri Indrajit Chatterjee.

2. Addition of Rs.4,92,60,000/- on account of unexplained cash credit:
The AO made an addition of Rs.4,92,60,000/- as unexplained cash credit. The assessee argued that Rs.6,93,02,104/- of the total addition of Rs.11,85,62,104/- pertained to other years. The CIT(A) agreed and excluded these amounts. The Tribunal noted that the assessee provided details of the sources for Rs.4,73,00,000/- from three corporate entities and an individual, along with their CIN/DIN, PAN numbers, and addresses. The AO, in the remand report, acknowledged that the funds were spent on film production. The Tribunal directed the CIT(A) to verify the details and pass a fresh order.

3. Not directing the AO to delete the addition of Rs.6,93,02,104/- which does not relate to the assessment year 2013-14:
The CIT(A) had acknowledged that Rs.6,93,02,104/- did not pertain to the assessment year 2013-14. The Tribunal clarified that the AO should delete this addition if not already done.

4. Directing the AO to assess the unexplained cash credit in the years the loan was received:
The Tribunal held that the CIT(A) had no power to direct the AO to reopen assessments for other years not under appeal. This direction was found to be unsustainable, and the Tribunal ordered its deletion.

Conclusion:
The Tribunal partly allowed the appeal, providing the assessee another opportunity to substantiate the source of cash deposits and directing the CIT(A) to verify the details of the cash credits and pass a fresh order. The Tribunal also clarified that the CIT(A) could not direct the AO to reopen assessments for other years.