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2019 (12) TMI 825 - AT - Income TaxReopening of assessment u/s.147 - Notice issued by ITO who had no jurisdiction over the assessee - HELD THAT - We find that the assessee has filed his return of income on 25-11-2009 showing address as Plot No. 197, Saurabh Society, Opp. DIP Kiran Society, Gunjan, Vapi, Gujarat with Income Tax Officer, Ward- 1, Vapi. Thus, the assessee himself stated his jurisdiction with Income Tax Officer, Ward- Vapi. The PAN database also shown same address. Therefore, notice u/s 148 has been validly issued by the AO, who was having correct jurisdiction once the assessee on correct address as per address shown in return of income. There is no evidence on record whether the assessee has intimated change of address.Therefore, where the assessee not intimated change of address and not carried out change in PAN database, the AO has correctly exercised his jurisdiction for issue of notice under section 148 of the Act. Addition being cash deposits by the assessee in bank account with ICICI Bank Ltd. - HELD THAT - Agricultural land holding is sufficient but same is appearing in the Revenue records in the name of various family members of the assessee being his father who is 95 years old, mother who is 90 years old and one non-resident brother who is residing in London. Thus, the facts remains that the agricultural land holding is hereditary agricultural land and standing in the name of various members of the HUF, including the assessee,on which agricultural operations is being carried out by the assessee and expenses thereon being incurred by the assessee and sale proceeds of same has been used for cash deposits in bank account by the assessee. Since the assessee is the only person looking after financial affairs of the family therefore, it is but natural that sale proceeds of agricultural products have been used for cash deposits in his bank account. Therefore, considering the agricultural land holding of the family, bills of agriculture products, and the assessee is only person who looking after financial affairs and circumstantial surrounding circumstances, we are of the considered opinion that said agricultural income has been used for cash deposits made in the ICICI Bank account. In view of this matter, the addition sustained by the Ld. CIT (A) is therefore, deleted. This ground is therefore, allowed. Addition on account of bank interest from S/B account of ICICI Bank Ltd. - HELD THAT - AO made addition of interest of ₹ 1, 306 from ICICI bank, ₹ 1, 340 from Bank of Baroda, ₹ 3, 997 from Union Bank of India as same was not shown by the assessee. These were agreed to be added. However, in appeal these were contested as bank interest up to ₹ 10,000 is exempt under section 80L of the Act. However, CIT (A) held the provision of section 80L was omitted with effect from 01.06.2006 and equivalent provision was introduced u/s. 80TTA with effect from 01.04.2013. Hence, confirmed the same. In view of these circumstances and facts that the assessee has agreed for addition during the course of assessment proceedings, we do not find any merit in this ground, hence, it is dismissed. Reopening of assessment u/s.147 and issue of notice under section 148 - HELD THAT - We hold the reopening of assessment as valid and in accordance with law. So far, reliance on the decision of Co-ordinate Bench of tribunals as above, we note that in said decisions, the AO had not made any preliminary enquiries regarding source of cash deposits in bank account. In view of these facts, the above-cited decisions are distinguishable on fact and in law hence, the ratio of the same is not applicable. Further, in the case of Raymond Woollen Mills Ltd. v. ITO 1997 (12) TMI 12 - SUPREME COURT held that in determining whether commencement of reassessment proceedings was valid, it has only to be seen whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at such stage. Considering all the circumstances, we are of the considered opinion that the AO was justified in reopening of assessment. Accordingly, same is upheld. This ground is therefore, dismissed.
Issues Involved:
1. Reopening of assessment under section 147 and issuance of notice under section 148 of the Income Tax Act, 1961. 2. Confirmation of cash deposit additions in the bank account. 3. Sustaining addition on account of bank interest. Issue-wise Detailed Analysis: 1. Reopening of Assessment under Section 147 and Issuance of Notice under Section 148: *Assessment Year 2009-10:* The appellant contended that the notice under section 148 was invalid as it was issued by the Income Tax Officer, Ward-3, Vapi, who had no jurisdiction over the assessee, whose jurisdiction lay with the Income Tax Officer, Ward-3, Valsad. The respondent argued that the appellant had filed the return with the Income Tax Officer, Ward-1, Vapi, and the PAN database showed the jurisdiction with Ward-3, Vapi. The Tribunal found that the appellant had not intimated any change of address and had not updated the PAN database. Thus, the notice issued under section 148 was valid, and the reopening of the assessment was upheld. The Tribunal dismissed this ground of appeal, referencing the Supreme Court's decision in Pr.CIT v. M/s. IVen Interactive Limited. *Assessment Year 2010-11:* The appellant argued that the reopening was based on cash deposits in the bank account, which cannot be a basis for reopening. The respondent cited that the bank account with substantial cash deposits was not disclosed in the return of income, and the appellant did not respond to the query letter from the AO. The Tribunal upheld the reopening of the assessment, citing the Supreme Court's decisions in ACIT v. Rajesh Jhaveri Stock Brokers (P) Ltd. and Raymond Woollen Mills Ltd. v. ITO, which support reopening based on prima facie material. 2. Confirmation of Cash Deposit Additions in the Bank Account: *Assessment Year 2009-10:* The appellant had cash deposits of ?10,87,975 in the ICICI Bank account, claimed to be from agricultural income. The AO rejected this explanation due to lack of evidence of agricultural income in the return and discrepancies in the seasonality of crop sales. The CIT(A) upheld the addition, noting that the cash deposits did not match the crop seasons. The Tribunal, however, found that the appellant had sufficient hereditary agricultural land, and the agricultural income was used for cash deposits. The Tribunal deleted the addition, recognizing the appellant's role in managing the agricultural operations and financial affairs of the family. *Assessment Year 2010-11:* Both parties agreed that the facts were identical to the previous year. Following the findings for the assessment year 2009-10, the Tribunal allowed this ground of appeal, deleting the addition of ?12,79,500. 3. Sustaining Addition on Account of Bank Interest: *Assessment Year 2009-10:* The AO added bank interest of ?6,643 from various banks, which was not shown by the appellant. The appellant contested this, claiming exemption under section 80L, which was omitted from 01.06.2006. The CIT(A) confirmed the addition, noting that the exemption under section 80TTA was introduced only from 01.04.2013. The Tribunal dismissed this ground, noting the appellant's agreement to the addition during the assessment proceedings. Conclusion: The Tribunal partly allowed the appeals for both assessment years 2009-10 and 2010-11. The reopening of assessments was upheld, the addition of cash deposits was deleted, and the addition on account of bank interest was sustained. The order was pronounced in the open court on 10.12.2019.
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