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TMI Blog2016 (2) TMI 1219X X X X Extracts X X X X X X X X Extracts X X X X ..... DER PER SHRI B.C. MEENA, AM These appeals filed by different assessees emanate from the orders of the learned CIT(A), Ujjain, all dated 27.12.2012. 2. In ITA No. 61/Ind/2014 the assessee has taken the following grounds of appeal :- (i) From the facts and in the circumstances of the case, the assessment order passed by the A.O. dated 29.12.2006 is invalid, void ab initio and time barred and notice issued u/s 148/147 dated 27.05.2005 is illegal and wrong and bad in law. (ii) That the A.O. was wrong in making addition as unexplained cash credit of ₹ 9,24,734/- on the basis of projected balance sheet submitted to the bank. (iii) That the A.O. was also wrong in making addition of ₹ 5,95,450/- as unexplained investment in building construction the addition is on estimated basis. (iv) That the ld. A.O. has erred in estimating the sales ofRs.21,45,689/- and net profit estimated ₹ 1,50,000/- without any basis. (v) That the order passed by the CIT(Appeal) dated 27.12.2012 is also illegal and wrong. (vi) That the whole of the addition of ₹ 16,70,184/- is illegal excessive and bad in law. 3. In ITA No. 62/Ind/2014 the assessee has tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following grounds of appeal :- (i) From the facts and in the circumstances of the case, the assessment order passed by the A.O. dated 29.12.2006 is invalid, void ab-initio and time barred and notice issued u/s 148/147 dated 27.05.2005 is illegal and wrong and bad in law. (ii) That the A.O. was also wrong in making addition as unexplained cash credit of ₹ 924734/- as the credit shown in projected balance sheet submitted to bank. The addition of ₹ 924734/- purely on presumption and on estimate basis. (iii) That the ld. A.O. has erred in estimating the sales of ₹ 2145689/- and net profit taken ₹ 150000/- without any basis and without considering the facts of the case. The addition is purely on estimate basis. (iv) That the order passed by the CIT(Appeal) dated 27.12.2012 is also illegal and wrong being not accepting the legal ground raised in first appeal. 7. We have heard both the sides. In the case of Smt. Laxmikanta Goyal, the Ld. counsel for the assessee submitted the following written submissions before the Tribunal :- The facts in brief are that the appellant is individual assessee. The assessee has desired to start business activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reasons recorded by the AO for issuing notice u/s 148 it is found that the AO has just mentioned the balance sheet figures and on suspicious he reason to believe that the income of the assessee, opening stock, loans and investment in building is treated as income and believe that the same is escaped assessment. The AO has not taken the prior approval of the JCIT for issuing the notice u/s 148 of the Act. From the above and the facts of the case the action taken by the AO for reopening of the case is barred by limitation and bad in law liable to quash. 1996-1997 Before passing the order of the assessee for the assessment year 1996-1997 the Ld. AO has not considered the opening balances of the balance sheet as on 31st March 1995. This fact is also verifiable from the face of the balance sheet of the assessee for the financial year 1995- 1996, on which the AO has relied and made the addition. If the same has been considered there is no unaccounted money in the hand of the assessee and the only issue is left for income earned for the year i.e. 1,45,687/-. The AO has estimated the same at ₹ 1,50,000/-. Further the AO has made addition on account of unexplained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained investment in building. Sir, this is once again the difference of opening and closing balance shown in balance sheet. Sir, this figure is duly incorporate in the balance sheet and the source of said investment is income earned in the year under consideration, increase in creditors and decreased in the current assets. The total amount of investment made during the year under consideration is already reflected in the balance sheet itself. The assessee has having the source for the same and the same is already offered for tax in this year as well as in last year than no further addition will be made in this head because the source is already added in the hand of the assessee. Looking to the facts and circumstances of the case and evidence please delete the addition made by AO for ₹ 1,35,790/- on account of credit balance in balance sheet and ₹ 7,41,110/- on account of investment in building. Assessment year 1999-2000 The Ld assessing officer further passed order u/s 144 of the Act and made the additions as under: 01. ₹ 1,00,000/- The AO has made an addition of ₹ 1,00,000/- on the estimated sales of ₹ 20,00,000/- in-spite Of the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 895/- Total 54,23,332/- On the perusal of the above it is clear that the assessee has started its construction activities in the financial year 1994-1995 and till the 1998-1999 she is utilized a sum of ₹ 54,23,332/- towards building. The estimation of AO that the assessee has constructed the same in two years i.e. 1997-1998 and 1998-1999 is baseless because the AO himself made additions in the year other than mention in the order i.e. 1994-1995 to 1996-1997. The report of the departmental valuer is also not accurate though and the valuer is valued the same on the basis of the year of construction i.e. financial year 1997-1998 and 1998-1999 and obviously in the latter years cost of construction is taken higher than the cost of 1994-1995. Looking to the fact and the circumstances of the case and the addition made by the AO in earlier years the same is prove the contradiction in the valuer report and the contention of the AO. The assessee has also having valuation report from the registered valuer duly registered under wealth tax act. The same is much below the amount estimated by the department valuer. We reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses for the assessment year 1996-1997, 1997-1998 The AO has re-opened the case of the assessee u/s 148 of the Act on 27.05.2005 for the assessment year 1996-1997 and 1997-1998 that is beyond the four years from the end of the assessment year. As per section 148 AO has power to reopen the case of the assessee on or before 31st March 2001 (for the assessment year 1996-1997), 31st March 2002 (for the assessment year 1997-1998). On plain reading of the reasons recorded by the AO for issuing notice u/s 148 it is found that the AO has just mentioned the balance sheet figures and on suspicious he reason to believe that the income of the assessee, opening stock, loans and investment in building is treated as income and believe that the same is escaped assessment. The AO has not taken the prior approval of the JCIT for issuing the notice u/s 148 of the Act. From the above and the facts of the case the action taken by the AO for reopening of the case is barred by limitation and bad in law liable to quash. 1996-1997 Please note that the assessee is not doing any business and only do the saree business in the name of his wife Smt Laxmikanta Goyal. To avail the loan from ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be further added in the assessee s hand since the same will be double taxation on single amount. Estimation of profit of ₹ 37,500/- Balance Sheet and Profit and loss account for the assessment year 1997- 1998 the AO has assumed that the assessee was in business in the last year i.e assessment year 1996- 1997 and estimate the sales for ₹ 3,75,000/- ans estimated the net profit at 37,500/- i.e. 10% of the estimated sales and on this basis made addition Looking to the facts and circumstances of the case and evidence please delete the entire addition made by AO for ₹ 6,73,387/- on account of duplication of income. 1997-1998 In this year the AO has further made an assessment u/s 144 of the Act. The AO has relied on the balance sheet submitted in the bank along with project report and made additions of Income shown in profit and loss account, increased in credit balance of creditors and increased in investment in shares. AO has made addition of ₹ 1,70,000/- for Business Income The AO has made addition on account of estimating the business income of the assessee on the basis of balance sheet and Profit loss account submitted in bank. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial year 1998-1999 i.e. assessment year 1999-2000. Please verify the same in both the Balance Sheet and Profit Loss account all the amounts are same only name of the assessee is changed and the period is also changed. On the perusal of the above it is prove that both the Balance Sheet and Profit and loss account for the assessment year 1998-1999 and 1999-2000 is prepared and submitted to the bank to avail loan only. The AO has made the additions in the hand of the assessee s wife and the same cannot be further added in the assessee s hand since the same will be double taxation on single amount. Since the assessee in not engaged in any business and the assessee is not having any building in its name and the entire amount of the balance sheet and profit loss account is already included in his wife case it is prayed that please delete the entire addition made in both the appeals. 9. After hearing both the sides, we find that in these cases the AO has made the assessments u/s 144 of the IT Act. Before the learned CIT(A) also there was no representation on behalf of the assessee. The learned CIT(A), therefore, decided the appeals without hearing the assessees. We are, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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