SHRI AJARUDIN KHAN, AJMER V. INCOME TAX OFFICER, WARD-2, KISHANGARH

ITA 1039/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3729 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 10-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: O.P. BATHEJA ITP
• Keywords: Income from undisclosed sources; Reassessment proceedings; Set aside
• Section: 131; 148; 201; 69A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1039/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2015-16 AJARUDIN KHAN S/O BUNDU KHAN VILL- UNTRA, VIA- GANGWANA, AJMER. CUKE VS. THE ITO, WARD-2, KISHANGARH. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: DZLPK 7181 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI O.P. BATHEJA (ITP) JKTLO DH VKSJ LS @ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 29/04/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 30/04/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 26.07.2018 OF LD. CIT (A), AJMER FOR THE ASSESSMENT YEARS 2015-16. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- (I) THAT LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 8,91,550/- U/S 69A OF THE ACT. ITA NO. 1039/JP/2018 AJARUDIN KHAN VS. ITO 2 (II) THAT THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT ADJUDICATING THE ISSUE OF TREATING AGRICULTURAL INC OME OF RS. 1,74,220/- AS INCOME FROM OTHER SOURCES. ADDITIONAL GROUNDS. 1. THE LD. AO MADE ADDITION OF RS. 15,74,626/- U/S 69A (OUT OF WHICH ADDITION OF RS. 8,91,550/- HAS BEEN CONFIRMED BY THE LD. CIT(A), ON PROTECTIVE BASIS. AS PER THE SETTLED PRI NCIPALS IF TAXATION GOVERNING THE PROTECTIVE ASSESSMENT, A PROTECTIVE A SSESSMENT WILL NOT SURVIVE WITHOUT A SUBSTANTIVE ASSESSMENT. THE E XISTENCE OF SUBSTANTIVE ASSESSMENT IS A PRE CONDITION OF SURVIV AL OF PROTECTIVE ASSESSMENT. SINCE THERE IS NO SUBSTANTIVE ASSESSMEN T/ADDITION, THEREFORE, THE ADDITION/ASSESSMENT MADE BY LD. AO I S BAD AND LAW AND DESERVES TO BE DELETED/QUASHED. 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETU RN OF INCOME ON 22.03.2017 DECLARING INCOME OF RS. 2,50,640/- AND A GRICULTURE INCOME OF RS. 1,74,220/-. THE CASE OF THE ASSESSEE WAS SEL ECTED FOR SCRUTINY UNDER CASS. THE AO RECORDED THE STATEMENT OF THE AS SESSEE U/S 131 OF THE I.T. ACT REGARDING THE CLAIM OF CASH IN HAND OF RS. 15,74,626/- PART OF WHICH WAS FOUND TO BE DEPOSITED IN THE BANK ACCO UNT OF THE ASSESSEE IN THE FINANCIAL YEAR 2016-17. THE AO TREATED THE C ASH OF RS. 15,74,626/- AS UNEXPLAINED MONEY AND ADDED TO THE I NCOME OF THE ASSESSEE U/S 69A OF THE ACT TO BE TAXED ON PROTECTI VE BASIS U/S 158BBE ITA NO. 1039/JP/2018 AJARUDIN KHAN VS. ITO 3 OF THE ACT. SINCE THE CASH OF RS. 13,50,000/- WAS F OUND TO BE DEPOSITED IN THE BANK DURING THE FINANCIAL YEAR RELEVANT TO T HE ASSESSMENT YEAR 2017-18, THEREFORE, THE AO PROPOSED TO ASSESS THE S AID INCOME ON SUBSTANTIVE BASIS FOR THE ASSESSMENT YEAR 2017-18. THE ASSESSEE WHILE SHOWING THE CASH IN HAND AND ALSO CLAIMED AGRICULTU RAL INCOME OF RS. 1,74,220/- BUT THE AO HAS ALSO TREATED THE SAME AS INCOME FROM UNDISCLOSED SOURCES. THE ASSESSEE CHALLENGED THE AC TION OF THE AO BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEED. 3. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. THE MAJOR ADDITION OF RS. 15,74,626/- WAS MADE BY THE AO U/S 69A OF THE ACT ON PROTECTIVE BAS IS AND THEREFORE, THE SAID ISSUE CANNOT BE DECIDED IN THE ABSENCE OF THE OUTCOME OF THE ASSESSMENT OF THE SAID INCOME ON SUBSTANTIVE BASIS FOR THE ASSESSMENT YEAR 2017-18. ON THE DIRECTION OF THE BENCH THE LD. DR HAS FILED A REPORT OF THE AO DATED 18.02.2019 WHEREIN THE ASSES SING OFFICER HAS SUBMITTED THAT SINCE THE CASE OF THE ASSESSEE FOR T HE ASSESSMENT YEAR 2017-18 WAS NOT FALLING IN THE CATEGORY OF CASS FOR SCRUTINY, THEREFORE, THE AO HAS NOW REOPENED THE ASSESSMENT BY ISSUING N OTICE U/S 148 OF THE ACT ON 11.02.2019. THE COPY OF THE SAID NOTICE HAS BEEN FILED ALONG ITA NO. 1039/JP/2018 AJARUDIN KHAN VS. ITO 4 WITH THE REPORT AS WELL AS THE REASONS FOR REOPENIN G OF THE ASSESSMENT. THE LD. AR HAS NOT DISPUTED THE FACT THAT THE ASSES SING OFFICER HAS NOW INITIATED THE PROCEEDINGS OF THE REASSESSMENT FOR T HE ASSESSMENT YEAR 2017-18 TO ASSESS THE INCOME OF RS. 15,74,626/- AS INCOME FROM UNDISCLOSED SOURCE. HAVING REGARD TO THE FACTS THAT THE AO HAS INITIATED THE REASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEA R 2017-18 TO ASSESS THE INCOME ON ACCOUNT OF CASH IN HAND OF RS. 15,74,626/- WHICH INCLUDES DEPOSITS OF CASH OF RS. 13,50,000/- MADE B ETWEEN 06.11.2016 TO 31.12.2016 ON SUBSTANTIVE BASIS FOR THE ASSESSME NT YEAR 2017-18 THE ADDITION MADE ON PROTECTIVE BASIS CANNOT BE DECIDED AT THIS STAGE. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE THE MATTER OF ASSESSMENT ON PRO TECTIVE BASIS FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AS WELL AS THE ISSUE OF THE AGRICULTURAL INCOME TREATED AS INCOME FROM UNDISCLO SED SOURCE IS SET ASIDE TO THE RECORD OF THE ASSESSING OFFICER AND FO R DENOVO ASSESSMENT ALONG WITH REASSESSMENT FOR THE ASSESSMENT YEAR 201 7-18. NEEDLESS TO SAY THE ASSESSEE BE GIVEN AN APPROPRIATE OPPORTUNIT Y OF HEARING BEFORE PASSING THE FRESH ORDER AS PER OUTCOME OF THE ASSES SMENT FOR THE ASSESSMENT YEAR 2017-18. ITA NO. 1039/JP/2018 AJARUDIN KHAN VS. ITO 5 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30/04/2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/04/2019. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- AJARUDIN KHAN, AJMER. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-2, KISHANGARH. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1039/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR