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TMI Blog2024 (7) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... o infirmity in the assumption of jurisdiction by the A.O qua, the aforesaid issue, reject the claim of the assessee to the said effect. Cash deposits made by the assessee in the month of November, 2016 would be governed by pre-amended provisions of Section 115BBE - We are afraid that the same does not find favour with us. We, say so, for the reason that a bare perusal of Section 115BBE of the Act reveals that the same is effective from 01.04.2017, i.e. A.Y. 2017-18. In fact, a reference to the Taxation Laws (2nd amendment) Bill 2016 clearly reveals that sub-section (1) of Section 115BBE had been substituted w.e.f. 1st April, 2017. We, thus, in terms of our aforesaid observations, are unable to concur with the claim of the Ld. AR that the provisions of Section 115BBE of the Act (post amended) would not be applicable to the case of the assessee for the year under consideration i.e. A.Y.2017-18. Cash deposit in the assessee s savings bank account was sourced out of his income disclosed under the head income from other sources in his return of income for the year under consideration - On a careful perusal of Section 69A of the Act, it transpires that where an assessee who is, inter ali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in limited scrutiny cases that in limited scrutiny cases Assessing Officer cannot travel beyond the issues for which the case was selected and Assessing Officer shall not expand the scope of enquiry/investigation beyond the issues on which the case was flagged for limited scrutiny whereas in this case scope of enquiry/investigation and assessment order are based on sources of income shown under the head "Income from other sources" and not on issue of examination of sources of cash deposited during demonetization period. 2) On facts and in the circumstances of the case and in law, CIT(A) has erred in confirming action of Assessing Officer in making addition of Rs. 65,00,000/- u/s. 69A without providing proper and reasonable opportunity of being heard on difference of opinion on legal issue as she had ignored specific request of the assessee in this regard made through letter dt.29.09.2019 to defend the case properly and judicially, which is against the principle of natural justice. 3) On facts and in the circumstances of the case and in law, CIT(A) has erred in confirming action of Assessing Officer in making addition of Rs. 65,00,000/- u/s. 69A in respect of cash de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on as regards the "nature" and "source" of cash deposit of Rs. 65 lacs made by him in his savings bank account No.049104000364218 with IDBI Bank, Civil Lines, Raipur. In reply, it was the claim of the assessee that the aforesaid cash deposits were sourced out of income of Rs. 65 lacs that was disclosed by him under the head "other receipts" in his return of income for the year under consideration. As the assessee had failed to come forth with any explanation as regards the "source" from which the cash of Rs. 65 lacs was deposited in his aforesaid bank account, therefore, the A.O recharacterized the income disclosed by the assessee under the head "other receipts" as his unexplained money u/s. 69A of the Act and brought the same to tax u/s. 115BBE(1) of the Act. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without success. For the sake of clarity, the relevant observations of the CIT(Appeals) are culled out as under: "3. Ground No.2 raised in appeal is that in limited scrutiny cases Assessing Officer cannot travel beyond the issues for which the case was selected and assessing officer shall not explant the scope of enquiry/investigation beyon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax for the A.Y. 2017/18 was not paid in cash. Advance-tax of Rs. 20,08,500/- was paid on 25.11.2016 by banking channel from IDBI Bank account. Reason-2 of limited scrutiny was Cash deposited during demonetization period: The AO verified this issue and found that the assessee have not justified the source from which the cash of Rs. 65,00,000/-was received and deposited in IDBI Bank, Civil Line, Raipur bearing account no 049104000364218. There was no supporting document to substantiate the sources from which the cash was generated and ultimately deposited in the bank account. It is clear that there are no irregularities in the assessment and the AO have not travelled beyond the mandate of limited scrutiny. Hence ground no 2 raised by the appellant is dismissed. 4. All other grounds are against the Assessing Officer invoking provision of section 69A treating cash deposited during demonetization period of Rs. 65,00,000 as unexplained money and levying tax u/s 115BBE(1) @ 60%. The assessee has included this income of Rs. 65,00,000 of cash deposited as her returned income under the head IFOS and have paid taxes @ 30%. However, in the absence of documentary evidence in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessee provisions of section 69A would not apply due to the following facts of the case:- Section 69A of the Act also cannot be said to be applicable as the department has not found her to be the owner of money as she has herself deposited the amount in bank account and offered the same for taxation in the retune of income filed well before action of limited scrutiny Provisions of Section 69A are applicable only when there is no entry in the books of account in respect of money, jewellery, etc. found in possession of the assessee. Since the assessee has already made the accounting entry in the books in respect of cash deposited by her provisions of above section are not applicable. Neither the provisions of section 68 nor of section 69A of the Act can be applied in respect of cash deposits which have been duly recorded in the books of account and have already been considered as income in the return of income filed by the assessee. That AO has no power under the Income-tax Act to reduce the income disclosed by the assessee in particular head of income and to treat it as deemed income under sections 68 to 69A. That in this case in spite of having knowledge of conditions required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready stated in earlier submissions as well as in response to "Cash Transactions 2016" filed vide transaction number 4179354099 that I had deposited cash of Rs. 65,00,000/ during demonetization period in bank account out of income earned during the F. Y. 2016/17 shown in the return of income for the A.Y. 2017/18". The appellant argues that, mere acceptance that cash is deposited, constitutes books of accounts. Books or books of accounts have been defined u/s 2(12A) of the income tax act as including ledgers, day-books, Cash books, "Account-books and other books, Whether kept in the Written form or as Print-outs Of data Stored in a floppy, disc, tape or any other form of electro Magnetic data Storage device The appellant has Not kept any ledgers day-books Cash books etc., regarding Generation of income from Other Sources. Even if a liberal view is to be taken, the Income Tax Appellate Tribunal Delhi in its decision 97 Taxmann 273 (1998, 60 T.T.J. 278) has held that there is no rule Made to the effect that Which books of accounts are required to be Made by the Persons Carrying on business Covered u/s 44AA (2), therefore if the assessee has kept the details of Incomes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared assets in any form. In the instant case the appellant has already availed IDS Scheme for Rs. 30,00,000 cash deposited in another bank account and the aS8Sessing Officer did not raise any further queries regarding that amount. But regarding Rs. 65,00,000 the appellant took a chance by directly depositing cash in bank account and Pay 30% tax. So the assessing officer rightly deduced that the income of AY 2017-18 was inflated through bogus IFoS in order to justify the Claim of the Cash deposited. Hence the assessment of cash deposited during demonetization Period of Rs. 65,00,000/- with IDBI Bank, Civil Lines, Raipur", though offered as income in the return of income, as unexplained money u/s. 659A of the Act and taxing it as per Provisions of Section 115BBE of the Act is held to be valid and proper." 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 6. We have heard the ld. Authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive hom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utiny" assessment converted into complete scrutiny with the approval of the Pr. CIT/CIT as per the powers that were vested with him vide Instruction No.20/2015 dated 29.12.2015. The Ld. AR in order to buttress his contention that the addition made qua an issue which did not form the basis for selection of the case for "limited scrutiny" could not be sustained and is liable to be struck down had relied on the following judicial pronouncements/orders: (i) M/s. Su-Raj Diamond Dealers Pvt. Ltd. Vs. Pr. CIT, ITA No.3098/Mum/2019 dated 27.11.2019; (ii) M/s. Akash Ganga Promoters & Developers Vs. Pr. CIT, ITA No.164/CTK/2019 dated 18.12.2019 (iii) Sanjeev Kumar Khemkha Vs. Pr. CIT, ITA No.1361/Kol/2016 dated 02.06.2017. 11. We have thoughtfully considered the aforesaid contention of the Ld. AR in the backdrop of the facts available on records and are unable to concur with the same. As the case of the assessee was, inter alia, selected for verifying the cash deposits made by him during demonetization period, therefore, the view taken by the A.O that the cash deposits of Rs. 65 lacs made in the assessee's bank account during demonetization period in absence of any explanation as rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income-tax payable shall be the aggregate of-- (i) the amount of income-tax calculated on the income referred to in clause (a) and clause (b), at the rate of sixty per cent; and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i). (2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance or set off of any loss shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) and clause (b) of sub-section (1)." Also, the provisions of Section 69A of the Act are culled out as under: "69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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