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TMI Blog2017 (2) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... e by Shri Prakash Mane (DR) ORDER Per Ashwani Taneja (Accountant Member): This appeal has been filed by the Assessee against order of Ld. Commissioner of Income Tax(Appeals), Mumbai-II (in short CIT(A) }, dated 30.06.2014 passed against assessment order u/s 143(3), dated 15.12.2011 for Assessment Year 2009- 10 on the following Grounds: Being aggrieved by the order passed by the learned Commissioner of Income Tax (Appeals) - II, Thane, (hereinafter CIT(A) YOUI appellant submits, among others, following grounds of appeal for your sympathetic consideration :- 1) On the facts of the case and in law, CIT(A) erred in confirming and not quashing the assessment order passed by the Assessing Officer u/s 143(3) r.w.s. 144 of the Act whereby the Assessing Officer had made addition of ₹ 14,92.294 invoking provisions of section 68 of the I.T. Act 1961. 2) On the facts of the case and in law, CIT(A) erred in exceeding his jurisdiction in invoking powers of enhancement and making addition of ₹ 38,83900/- u/s 69/ 69A of the I.T. Act 1961. 2. During the course of hearing, none appeared on behalf of the assessee. Shri Prakash Mane Ld. DR was present on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the bank accounts. But, since the business could not be started, the deposits were refunded subsequently. The assessee also furnished a summary of cash deposited in both the bank accounts and made further submissions along with letter dt. 21.08.2013 enclosing therewith certain additional evidences and request for admission of the same under Rule 46A. It was noted by the Ld. CIT(A) that summary of the bank deposit and withdrawn through cheques reveals that assessee had invested ₹ 7,42,562/- in various schemes of the bank, Mutual Funds and Insurance Corporations. Further, the copies of Power of Attorney dt. 28.07.2008 and 13.11.2008 for development of land were filed and it was claimed by the assessee that assessee had received cash from various persons on account of deposit and the same was refunded to them but no confirmation was filed along with reply. It was further noted by the Ld. CIT(A) that since the written submissions of the assessee contained fresh evidences in respect of the sources of cash deposits in the bank accounts, these were forwarded to the AO for cross verification/inquiries and submissions. It is noted from the perusal of the order of the Ld. CIT(A) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing land through Power of Attorney documents from Adivasi land owners, but due to failure to get the scheme sanction/authorized, he had to give up the idea. However, the copy of notorized power of attorney and plans submitted before this office, however, does not explain the so called purchase of land from the Adivasi land owners. The first copy of Power of Attorney dated 28-07-2008 indicates the name of appellant as giver to one Shn Sabir Musabhai Kaularikar and the second one dtd. 13-10-2008 indicates the names of other land owners as giver to the said person Shri Sabir Plusabhai Kaularikar. Therefore, these do not prove the purchase of land by the appellant. On the basis of written submission forwarded to this office, the appellant was asked to explain the entries appearing in the copy of pass book about the deposits of the amounts received from prospective customers and its repayment through the same banks. Further with a view to cross verify the statement of the appellant that certain amounts as per ledger accounts brought on record have been received by him against the booking of flats and later its repayments to the depositors, the appellant was asked to produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient in as much as the entire cash deposits remain unexplained and therefore, entire amount deposited in the bank account should be added u/s 69/69A, instead of u/s 68 made by the AO. It was further noted by the Ld. CIT(A) that confirmation letters filed by the assessee of the depositors/creditors was not proper. Under these circumstances, he issued enhancement notice to the assessee with following observations: 3.4 On g o ing thr ough the de tai l s and o the r mate r ial submi t ted by the appellant, it was noticed that the appellant after depositing the cash in the hank accounts has utilized the same for investments in various forms and hence, there was no question of assessing only peak credit. Accordingly, a notice u/s. 251(2) was issued on 7/3/2014 requiring the appellant to explain as to why the income had not enhanced. For the sake of convenience and better understanding of the issue, the contents of the notice u/s. 251(2) are reproduced as under:- '2. On careful examination of the details furnished by you, during the course of appellate proceedings, it is noticed that you have deposited cash in Bank A/c with Bassin Co-operative Bank Ltd. at ₹ 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see of the aforesaid notice. Under these circumstances, Ld. CIT(A) analysed entire facts and circumstances of the case and found it appropriate to enhance the addition made by the AO with following observations: 4. I have careful ly considered the facts on record, submissions of the Id. A.Rs. and the remand report of the A.O. On perusal of the copy of bank accounts and also the details submitted, it is noticed that the appellant has deposited cash in the bank accounts as detailed below: I. Bassein Catholic Co-op. Bank Ltd. ₹ 24,94,300/- ii. Saraswat Co-operative Bank Ltd. ₹ 1389,600/- Total: ₹ 38,83,900/- The above quantum of the cash deposited in the bank accounts is not disputed by the appel lant. Since the total amount of the cash deposited was ₹ 38,83,900/-, the observations of the A.O. regarding total cash deposit in a single bank account with Bassein Cathol ic Co-op. Bank Ltd. ₹ 38,83,900/- are not correct. The A.O. has incorrectly f irst added the f igure of cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh with the appellant from his own business cannot be more than ₹ 3,01,284/-. It may also be noted that the appellant has to incur expenses for household etc. and hence, there was hardly any availability of cash for investment in the bank accounts particularly when the appellant has claimed investments at ₹ 1,00,000/- during the year under consideration eligible u/s. 80C. Under these circumstances, there would not be any availability of cash for depositing the same in the bank accounts. Thus, the source of cash deposits in the bank accounts in the name of Juice Centre of ₹ 10,24,100/- remained total ly unexplained. 4.1.2. In respect of the balance amount of cash of ₹ 28,59,016/-, the appellant has claimed to have received advances for purchase of the flats fr-orn him in a project likely to be developed subsequently from various persons. This claim of accepting advances from various persons for purchase of flats to be constructed by the appellant was not made before the A.O. Thus, it is clear that the appellant has concocted a story of receiving advances in order to explain the source of cash deposited in bank account which has been uti l ized for vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed in the return of income and also the source of cash advance given to the appellant. Copy of the Balance Sheet has also not been filed. It is also noticed that the appellant has claimed only ₹ 1,46,300/- from him as against ₹ 1,50,000/-. The A.O. has also reported that the PAN was acquired on in A.Y. 2009-10 and there is no evidence to ascertain financial capacity in earlier years. iv . Shri Mukesh Singh Neqi:- It is claimed that he is engaged in the business of supply, repair and maintenance of hardware of computers. His family consisted of 5 members. it is claimed that he has filed return of income with ITO, Ward 4(4), Thane. It is stated that he has advanced ₹ 2,00,0001 1- to the appellant in cash for purchase of the flat. It is also noticed that the appellant has claimed ₹ 2,15,000/- from him as against ₹ 2,00,000/-. The A.O. has also reported that the PAN was acquired on in A.Y. 200910 and there is no evidence to ascertain financial capacity in earlier years. v . Shri Hemant Ravindranath Rane He is working as a Travel Agent Tourist Operator and his family consisted of five members. He has claimed filing of return of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized for making various investments as detailed above, the source of investments remained unexplained and accordingly, the addition to the extent of ₹ 38,83,900/- requires to be made u/s. 69/69A instead of u/s. 68 made by the A.O. and hence, addition to the extent of ₹ 38,83,900/- is directed to he made as against ₹ 14,92,294/- made by the A.O. resulting into an enhancement of income by ₹ 23,91,606/. 4.2 I t is not iced that the A.O. has provided var ious oppor tuni t ies of being heard during the course of assessment proceedings, but there was no compliance from the appellant. During the course of appellate proceedings also, the appellant has been provided various opportunities of being heard to substantiate the sources of cash deposits in the bank accounts. Accordingly, the principles of natural justice have been followed and in the absence of compliance, the order made by the A.O. u/s. 144 deserves to be sustained and accordingly, the same is sustained. 3.5. During the course of hearing before us nothing has been brought to negate detailed factual findings recorded by the Ld. CIT(A). It is noted that Ld. CIT(A) has brought out various contradictio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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