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TMI Blog2019 (5) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged loans exceeds the amount of INR 20,000. There is no documentary evidences produced before the lower authorities with respect to creditworthiness and genuineness of transactions of loan. Assessee had various opportunities to adduce evidence at the time of assessment. The assessee did not the used them and during the course of remand proceedings could produce only six persons who also lacks credibility. None of the persons produced also submitted their bank passbook to show the source of the funds. AO further noted an interesting fact that all the persons who are the lender to the assessee are also employed with the same company in which the assessee is a managing director. This it shows the genuineness of the transaction in serious doubt as the managing director of the company is taking loan of INR 18,000 from the various employees from his company. In view of this, we do not find any infirmity in the order of the learned CIT A, in confirming the addition u/s 68 of the amount deposited in the bank account of the assessee. Unexplained bank deposit u/s 68 - bank passbook is books or books of accounts - no requirement that the books of account should be maintained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been issued prior to filing of return, it was not a valid notice and, therefore, assessment Completed on basis of it was also invalid. 3. Whether Commissioner (Appeals) was justified in not considering the new ground. 4. Whether, since, in instant case, the assessing authority is justified in assuming jurisdiction to frame the impugned Assessment Order and to make impugned addition and disallowance. More so, the same have been made in absence of any adverse material having been found and seized during the course of search. 5. Commissioner (Appeal) has not considered the additional evidences on which the assessing authority has not made any enquiry. 6. The commissioner (Appeal) has not considered the ground no. 9 regarding objection of jurisdiction of the appellant. 3. During the course of hearing of the appeal, The assessee filed the additional ground of appeal as under:- That having regard to the facts and circumstances of the case, the learned CIT A, has erred in confirming the addition amounting to INR 512000/ on account of unexplained bank deposit under section 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consultancy work and on perusal of the bank account maintained with state bank of India, it is found that assessee has deposited cash of INR 636000/ . The assessee was required to explain the source of the cash deposit. The assessee submitted that cash deposit of INR 60,000 on 17/5/2003 is out of the loans of the various parties. However, the balance of INR 6000 no explanation was provided. The assessee also did not file any confirmation in respect of the above loans received. Further, the loans were also given in cash. No books of accounts have been maintained are produced before the assessing officer. Therefore, the learned AO treated the above sum of INR 60,000 as unexplained income and added the same under section 68 of the income tax act. The next cash deposit of INR 55,000 on 21/8/2003. The assessee‟s counsel submitted that it is out of cash of INR 18,000 received from three gentlemen. The three persons were the same persons who are also discussed in the cash deposit of INR 60,000/ on 17/5/2003. Therefore, the learned assessing officer rejected the explanation of the assessee, treated the sum of INR 55,000 / as income from undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitting that it can only be served after the assessing officer examined the return filed by the assessee. As per ground number 2, assessee challenged that instant case, the notice had been issued prior to the filing of return of income and therefore it was not a valid notice and therefore assessment completed based on it was invalid. The main argument of the assessee is that the appellant submitted its return of income on 7/12/2007. However the learned assessing officer issued notice under section 143 (2), on 6/12/2007. Therefore this notice is not a valid one as per the provisions of section 143 (2), which makes it clear that the notice can only be served after the learned assessing officer examined the return of income filed by the appellant. For this proposition, he relied upon the decision of the honourable Delhi High Court in 323 ITR 249 in DIT vs Society for worldwide interbank financial telecommunication. 11. The learned departmental representative vehemently submitted that there is no requirement of issue of notice under section 143 (2) of the income tax act in case of a search, assessment. He relied upon the decision of the honorable De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee chooses to file his return of income at his sweet will without caring for the time limits prescribed by the assessing officer, he cannot later on take shelter under such technicalities, Even otherwise the return filed by the assessee could not be considered to be a return filed in response to notice under section 153A of the income tax act. Further, in case of search assessments u/s 153A of the act there is no requirement of issue of notice u/s 143(2) of the act. This issue is squarely covered against the assessee by decision of the honorable Delhi High Court in case of CIT vs Ashok Chadha [2012] 20 taxmann.com 387 (Delhi)/[2011] 337 ITR 399 (Delhi) wherein it has been held that There is no specific provision in the Act requiring the assessment made under section 153A to be after issue of notice under section 143(2). The words 'so far as may be' in clause ( a ) of sub-section (1) of section 153A cannot be interpreted that the issue of notice under section 143(2) is mandatory in case of assessment under section 153A. The use of the words 'so far as may be' cannot be stretched to the extent of mandatory issue of notice under section 143(2). A specific notice is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore submitted that on the merits of the case, the addition is required to be sustained as assessee has filed to prove the creditworthiness and genuineness of the transactions of loans/ cash deposits. He further stated that no evidence was submitted by the assessee to prove the identity, creditworthiness and the genuineness of the source of cash deposits in the bank account. He further stated that deposits are not exceeding INR 18,000/ which also creates the doubt with respect to the genuineness of the loans obtained by the assessee. He further stated that the no proofs of repayment of these loans have been provided by the assessee and therefore the provisions of section 68 are correctly applied by the lower authorities. He extensively referred to the orders of the lower authorities. 16. We have carefully considered the rival contention and perused the orders of the lower authorities. In the present case the assessee has deposited cash in his bank account and the source of the cash deposited in this bank accounts have been shown by the assessee as loan from various parties. In support of which the assessee could submit only the affidavits. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned assessing officer further noted an interesting fact that all the persons who are the lender to the assessee are also employed with the same company in which the assessee is a managing director. This it shows the genuineness of the transaction in serious doubt as the managing director of the company is taking loan of INR 18,000 from the various employees from his company. In view of this, we do not find any infirmity in the order of the learned CIT A, in confirming the addition u/s 68 of the income tax act of the amount deposited in the bank account of the assessee. Accordingly, ground numbers 3 6 of the appeal are dismissed. 17. In the additional ground the assessee contented that the learned CIT A, has erred in confirming the addition amounting to INR 512000/ on account of unexplained bank deposit under section 68 of the income tax act. The argument of the assessee is that provisions of section 68 of the income tax at act apply only when the amount is credited in the books of accounts. In the present case the assessee does not maintain any books of accounts and therefore the amount deposited in the bank account of the assessee cannot be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year involved in that case is 1962 63. Admittedly on that date definition of the books of accounts‟ as prescribed under section 2 (12A) was not there on statute, which is inserted by the finance act, 2001, with effect from 1/6/2001. Further, the honourable Bombay High Court in 85 taxmann.com 306, 250 taxman 362 and 399 ITR 256 (Bombay) in Arunkumar J Muchhala V CIT has considered an identical issue where the above decision of the honourable Bombay High Court in 141 ITR 67 was considered. The honourable Bombay High Court noted that in Sudhir Kumar Sharma (HUF) vs CIT, 46 taxmann.com 340, honourable High Court noted that when during the course of assessment proceedings, assessing officer noted that the assessee has deposited huge amount of cash in his bank account, the addition of the said amount in the income of the assessee, by invoking the provisions of section 68 of the income tax act is justified. It was further held that onus is on the assessee to explain the nature and source of the said cash deposits. Special leave petition was preferred challenging the above judgment before honourable Supreme court. However, the honourable Supreme Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition in this appeal are identical to the facts for assessment year 2004 05. During this year the assessee filed his return of income on 7/12/2007 in response to the notice under section 153A of the act issued on 15/05/2006. The similar notice under section 143 (2) was also issued by the learned assessing officer on 6/12/2007. The learned AO noted that assessee has deposited a sum of INR 475000/ in his bank account with state bank of India. After examining the source of deposits explained by the assessee, learned assessing officer noted that assessee has accepted loan of INR 18,000 each from 12 different persons with respect to the deposit of sum of INR 225000/ on 24/3/2005 and further from 5 persons amounting to INR 76,000/-on 9/8/2004. With respect to deposit of INR 100,000 on 21/10/2004, assessee explained the source of the deposit as received from wife of the assessee. Assessee could not furnish any confirmation or the date when the same was received and repaid. Therefore, the same was added under section 68 of the income tax act. Further in para number 3.5 of the order he noted that assessee has made substantial investment in purch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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