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TMI Blog2018 (6) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... e same to the Government account or refunded to the respective clients, it constitutes the liability against the assessee but does not form part of income - hence we are of the considered opinion that the monies received by the assessee on behalf of the clients for payment of taxes to be treated as money belonged to the clients or belonged to the Income Tax Department and the same cannot be brought to tax as income in the hands of the assessee - thus we set aside the order of the CIT(A) and delete the addition made by the AO u/s 69A. Disallowance of depreciation - Held that:- Assessee did not produce any evidence for purchase of assets and put to use for the purpose of business - thus AO made the disallowance which is confirmed by CIT(A) - hence we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. Addition of cash credit - Held that:- AO made the addition after issuing the show cause notice and giving number of opportunities to the assessee. It is the obligation on the part of the assessee to comply with the notices issued and present his case by furnishing the required information. Having failed to avail the opportunities given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ITA No.1014-1016/2013-14/ITO W-3(1), VSP/2014-15 dated18.12.2014 for the assessment year 2007-08 to 2011-12. Since the issues involved in these appeals are common, all the appeals are clubbed, heard together and disposed off in a common order for the sake of convenience as under: ITA No.72/Viz/2015: A.Y.2007-08 2. The assessee filed 8 grounds of appeal along with appeal memo as under : 1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of ₹ 2,10)000 made by the assessing officer u/s 69 of the Income Tax Act,1961 towards alleged unexplained amount of loans received by the appellant. 3. The learned Commissioner of Income Tax (Appeals) is not justified in confirming partly to the extent of ₹ 79,137 addition of ₹ 9,01,407 made by the assessing officer u/s 69A of the Income Tax Act,1961 towards alleged unexplained amount of income tax challans paid on behalf of the clients of the appellant. 4. The learned Commissioner of Income Tax (Appeals) is not justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the notice issued u/s 148 cannot be made invalid. 6.2 We have heard both the parties and perused the materials placed on record. The AO issued the notice u/s 148 in printed format after recording the reasons. Of course, certain columns which were required to be struck off were not struck off by the AO. The notice issued u/s 148 was served on the assessee on 29.3.2012 with a direction to furnish the return of income in the prescribed format. In response to the notice issued u/s 148, the assessee has filed the return of income on 30.04.2012, thereby complied with the terms and conditions of the issue of notice. The assessee has complied with the notice and intent and purpose of issue of notice was served. The assessee has not raised any objection before the AO on receipt of the notice. The assessee did not make any protest for the minor defects in the said notice, such as non-striking off irrelevant columns in the said notice. No injustice or confusion was caused to the assessee by non striking of irrelevant columns. Therefore, we are of the opinion that having filed the return of income non- striking of irrelevant columns cannot render the notice as invalid. The Ld.AR relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nformity with or according to the intention and purpose of the Act. By incorporating this provision, it has been made clear that purely technical objections carrying no substance shall not come in the way of validity of assessment proceedings, etc. In other words, minor defects or irregularities in the circumstances aforesaid, would not negate the validity of the proceedings initiated by the AO and the assessee would not be able to raise technical or venial defects in this regard. 6.3 Hon ble Karnataka High Court in the case of CIT Vs. Sri Durga Enterprises reported in (2014) 44 Taxman 442 held that even if period for furnishing return of income was not specified in notice u/s 148, but assessee has participated in reassessment proceedings, such assessment is valid. Similarly Hon ble Allahabad High Court in the case of CIT, Aligarh Vs. Shyam Cold Storage (31 taxmann.com 358) held that having participated in the reassessment proceedings without raising any objection, the assessment held to be valid. For the sake of clarity and convenience we extract the relevant part of the order of the Hon ble High court hereunder: 8. Section 292B has been enacted with a view to overcome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has understood purport and import of notice no injustice was caused to the assessee. 6.4. In the instant case, the notice u/s 148 was issued by the AO clearly mentioning the name and address of the assessee, current status, PAN No., the relevant assessment year after recording the reasons and there is no dispute. Only certain irrelevant columns which should have been struck off by the AO were not struck off. The assessee has understood the intention and purpose of issue of notice and not filed the objections before the AO/CIT(A) and filed the return of income complying with the terms and conditions of the notice. Having complied with the notice issued u/s 148, the intent and purpose of the notice issued was served and there is no injustice caused to the assessee. No material was placed to show that the assessee was misled in any manner for not specifically striking the irrelevant columns. Therefore, we hold that the notice issued by the AO is valid and the same is upheld. This ground is raised by the assessee for the A.Ys 2007-08 to 2010-11 on identical facts and the appeals of the assessee on this ground for the A.Ys 2007-08 to 2010-11 are dismissed. 7. Ground No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same represents the loans taken during the year or not and to decide the issue afresh on merits. Accordingly we remit the entire issue to the file of the AO to decide the same afresh according to law. In the result appeal of the assessee on this ground is allowed for statistical purpose. 10. Ground No.3 is related to the addition of ₹ 9,01,407/- by AO and out of which a sum of ₹ 79,137/- was confirmed by the Ld.CIT(A) for the impugned assessment year u/s 69A of I.T.Act. It has come to the notice of the IT Department that certain copies of challans, claims of taxes, filed in the return of income on various dates relating to the various assesses are ingenuine and not matching with the information in OLTAS. The department observed that such returns were filed by the assessee who happens to be income tax practitioner. The department has conducted enquiries with the Syndicate Bank and the counter foils furnished in the returns and the challans found to be fake challans. Therefore, a survey u/s 133A of the Act was conducted in the office premises of N.V.Vasantha Rao, the assessee. During the course of survey, rubber stamps of Syndicate Bank and the counterfoils of fake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,823/- 0 0/- 6,823/- 2005-06 40 3,58,872/- 0 0/- 3,58,872/- 2006-07 32 1,42,987/- 6 32,300/- 1,75,287/- 2007-08 7 23,300 21 51,837/- 79,137/- 2008-09 20 3,04,341/- 44 1,23,083/- 4,27,424/- 2009-10 66 1,73,792/- 0 0/- 1,73,792/- 2010-11 4 4,214/- 4 14,300/- 18,514/- 2011-12 0 0/- 1 7,000/- 7,000/- 4.4. During the appeal hearing, the assessee did not raise any specific plea against the above addition, except arguing that additions w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s practice from 2007-08 onwards. He has taken sole responsibility and also admitted that no bank officials are involved in this practice. Therefore, from the statement recorded from the assessee and evidences found during the course of survey and the enquiries conducted with the bank officials and the mismatch of OLTAS establish beyond doubt that the assessee had collected the amount from the clients for tax purpose, but not remitted into the Government account. Therefore, the assessee s subsequent denial is nothing but an after thought and not supported by any evidence. Since the assessee has collected amount but not remitted into the Govt. Account or refunded to the respective clients, it constitutes the liability against the assessee but does not form part of income. This amount should have been deposited in the respective accounts of the clients towards the income tax. Non depositing the said sum makes the assessee liable for payment of the said sum back to the clients. Income tax department has not produced any evidence to show that the said sums were allowed credit in the respective accounts. The AO made the addition u/s 69A and the CIT(A)also confirmed the same. Section 69A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee failed to furnish the evidence. During the appeal hearing, before us, the Ld.AR could not controvert the finding given by the AO with evidence. Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. ITA 73 to 76 /Viz/2015, A.Y. 2008-09 to 2011-12 12. Additional Ground No.1 is related to the defective notice relating to non striking of irrelevant columns in the notice issued u/s 148 which was discussed in detail in appeal for the assessment year 2007-08 and answered this ground in favour of the revenue and against the assessee. This ground is involved for the A.Ys 2008-09 to 2010-11. As discussed in appeal No.72/viz/2015 for the A.Y.2007-08, the assessee s appeals for the A.Y. 2008-09 to 2010-11 are dismissed on this ground. 13. Additional Ground No.2 reads as under : 2. The entire assessment is bad in law as the same is said to have been passed under section 143(3) r.w.s. 147, whereas the assessment ought to have been passed under section 144 r.w.s. 147. This ground is involved for the assessment year 2008-09, 2009-10 and 2010-11. 13.1 The assessee submitted that the AO had issued the notice u/s 143(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment:] 13.4 Plain reading of section shows that on issue of notice u/s 143(2) the assessee required to furnish the details and evidences for claims made in the return of income. After examining the evidences and hearing the assessee the assessing officer required to pass the orders determining the total income and determine the tax payable or the amount refundable. In the instant case the AO has issued the notice u/s 143(2) and the assessee responded by seeking adjournments or furnished the partial information. The assessing officer confronted the information available with him with the assessee by issue of show cause notice and then passed the assessment order. The assessing officer has given sufficient opportunities and followed the principles of natural justice. Therefore, we hold that the order passed u/s 143(3) r.w.s. 147 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year 2010-11 was advance received for sale of agricultural land and further argued that the addition cannot be made u/s 68, since the said amounts were deposited in the bank account. 14.3. We have considered the submissions made by the both the parties. The assessing officer made the addition after issuing the show cause notice and giving number of opportunities to the assessee. It is the obligation on the part of the assessee to comply with the notices issued and present his case by furnishing the required information. Having failed to avail the opportunities given to the assessee both before the AO and the CIT(A) the assessee cannot take U turn and make a new argument at this stage. No evidence has been produced before us to establish that the said sums were not credited in the books of accounts. The law cannot help a person who is sleeping over his rights. The next issue is with regard to sale agreement and the advance received for sale of agricultural land for the A.Y.2010-11. The assessee furnished unregistered sale agreement but not produced the registered sale deed in respect of the sale agreement. Therefore, we are unable to accept the covenants of the unregistered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the expenditure debited to the Profit and loss account. In the absence of the details, the AO has disallowed 15% of the expenses on estimation basis. During the appeal hearing before the CIT(A) also, the assessee failed to produced any evidence in support of the expenditure. Since the AO has disallowed only 15% of the expenses and the assessee failed to produce any evidence with respect to the genuineness of expenses and we find the disallowance made by AO is justified and not inclined to disturb the order of the Ld.CIT(A). Accordingly, we uphold the order of the CIT(A) and dismiss the appeal of the assessee for the assessment year 2008-09 to 2011-12. 18.0. Ground No.5 is related to agricultural income. For the assessment year 2008-09 to 2011-12, the AO treated the agricultural income claimed by the assessee as non agricultural income and brought to tax as under : 2008-09 Rs.2,23,760/- 2009-10 Rs.2,15,009/- 2010-11 Rs.4,49,600/- 2011-12 Rs.9,27,250/- 18.1. During the assessment proceedings, it is observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed sale deed is final and cannot be disturbed unless there is a tangible evidence to establish that the excess consideration has been passed on. The Coordinate Bench of ITAT, Hyderabad in the case of Chilukuri SRK Raju Vs. ITO, Ward 12(1) in ITA No. 415 dated 13.07.2017, placing reliance on the decision of Hon ble High Court of Punjab Haryana in the case of Paramjit Singh Vs. ITO reported 195 taxman 273 held that once the immovable property is registered sale consideration in the registered sale deed is considered to be final consideration. For ready reference we extract para No.8 of the order of the Tribunal in the case cited supra which reads as under : 8. In the instant case, the agreement produced by the assessee was not registered and hence, we are unable to accept the same as valid evidence. In this case, the assessee has received ₹ 2.04 lakhs towards sale of land as discussed above. Once the immovable property is registered, the sale consideration in the registered sale document is considered to be the final consideration, since the stamp duty and other taxes for transfer of property was paid as per the consideration recorded in the registered sale deed. The con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consideration recorded in the sale deed is to be treated as final and accordingly, the addition made by the AO is unsustainable and the same is deleted. The appeal of the assessee on this ground is allowed. 20.0 Ground No.7 is related to the disallowance of depreciation for the assessment year 2008-09 to 2011-12.The Ld.AR did not make any argument on this issue and we find that there was no such addition made by the AO. Therefore, the ground No.76 is dismissed as infructuous. ITA No.76/Viz/2015, A.Y.2011-12 21. The assessee raised Additional Ground No.1 in A.Y.2011-12 which reads as under : 1. The entire assessment is bad in law as the same is said to have been passed under section 143(3) r.w.s. 147 and there is no notice issued under section 148 for this year. The Ld.AR during the appeal hearing argued that the AO has not issued notice u/s 148, but framed the assessment u/s 143(3) r.w.s. 147 which is bad in law and required to be quashed. 22. On the other hand, the Ld.DR argued that there is typographical error in the assessment order which should have been typed as 143(3) r.w.s. 147 and the same is curable mistake as per section 292B of I.T.Act. 23. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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