Somenath Kesh, Paschim Bardhaman V. I.T.O.,Ward-2(3), Durgapur

ITA 11/KOL/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5868 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 02-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 147; 148; 143(3); 143(2)

Judgement Text

1. ITA No. 11/Kol/2020 AY 2010-11 Somnath Kesh IN THE INCOME TAX APPELLATE TRIBUNAL BENCH “A-SMC”, KOLKATA Before Shri Manish Borad, Accountant Member and Shri Sonjoy Sarma, Judicial Member आयकर अपील सं.य/ ITA No. 11/Kol/2020 Assessment Year:2010-11 Somnath Kesh Bandra Gopalpur, Durgapur, Pashim Bardhaman-713212 बनाम V/s. ITO, Ward 2(3), Aaykar Bhawan Annexe, 4 th Fl., Aaykar Bithi, Durgapur- 713216 PAN: AMCPK6631K अपीलाथ /Appellant .. यथ /Respondent अपीलाथ क ओर से/By Appellant None यथ क ओर से/By Respondent Sri Subhra Jyoti Chakraborty, Add. CIT, Ld. DR स ु नवाई क तार ख/Date of Hearing 11-07-2022 घोषणा क तार ख/ Date of Pronouncement 19-07-2022 आदेश /O R D E R PER MANISH BORAD, AM. This appeal filed by the assessee pertaining to the A.Y. 2010-11 is directed against the order dt. 28-06-2019 of ld. Commissioner of Income-tax ( in short hereinafter referred to as the ld. CIT(Appeals), Durgapur, which is arising out of the assessment order dt. 19-12-2017 passed u/s. 143(3) of the Income-tax Act, 1961 ( hereinafter referred to as ‘the Act’ ) passed by the Assessing Officer( hereinafter referred to as ‘the AO’), ITO, Ward 2(3), Durgapur. 2. ITA No. 11/Kol/2020 AY 2010-11 Somnath Kesh 2. At the time of hearing the registry has informed that the present appeal filed by the assessee is time barred by 104 days. The assessee prayed for condonation of the delay. The reasons are placed on record. We, after perusing the same as well as material available on record find merit in the reasonable cause stated by the assessee and the cause of the delay is the illness of the assessee, which prevented him to file the appeal within the statutory time limit and also in the larger interest of justice, condone the delay and admit the appeal for adjudication. 3. When the case was called for none appeared on behalf of the assessee. Perusal of records show that this appeal has been fixed for hearing on number of occasions from 28-01-2021 and onwards. Notices have been issued including the present notice issued through Registered Post/AD (RPAD), but the same has returned unserved. Under these circumstances, where it looks that the assessee is not interested to pursuing this appeal, we are left with no option except to proceed/adjudicate the appeal on the basis of material available on records and submissions of the Ld. Departmental Representative. 4. The assessee has raised following grounds of appeals for Assessment Year 2010-11: 1. For that, on the facts, the Ld. CIT(A) erred in confirming the determination of income of the appellant at Rs.19,12,480/= made by the I.T.O. The said determination of income was made on the basis of surmises and conjectures. The said determination of income by the Assessing Authority and the Appellate Authority are absolutely unwarranted and stands to no reason at all. 3. ITA No. 11/Kol/2020 AY 2010-11 Somnath Kesh 2. For that, on the facts, the Ld. CIT(A) erred in confirming the addition of the entire loan amount of Rs. 16,40,000/ - by alleging that the appellant failed to satisfy him as regards to identity, credit worthiness etc. of the said loan givers. Such observation of the Assessing Officer and the Appellate Authority are absolutely unjust and improper since the appellate was in possession and produced all such documents which shows the genuineness and bonafideness of the loans taken by the appellant during the said assessment year. 3. For that, on the facts, both the Authorities below erred both in points of law and on facts . 4. For that the appellant craves leave to take further and/ or additional grounds at the time or or before hearing of this appeal petition if necessary. 5. Brief facts of the case are that the assessee is an individual, engaged in the business of plying of tankers. The assessee did not file return of income for the AY 2010-11. As per AIR information, it was found by that the assessee deposited cash of Rs. 18,31,0000/- in his Axis Bank account. Based on this information notice u/s. 143(2) of the Income-tax Act, 1961 was issued. In compliance to notice u/s. 142(1) the assessee filed e-return on 01-08-2017 declaring income at Rs.2,72,480/-, which included the income u/s. 44AE of the Act of Rs.1,26,000/- from plying of three tankers. Re-assessment proceeding u/s. 147 of the Act was carried out. During the proceedings the assessee appeared and filed the details and explained the source of said cash deposit of Rs. 18.31 lakhs. The ld. AO was satisfied with the details of source of said cash deposits, but on perusal all bank accounts he (ld.AO) observed that the assessee has received unsecured loan of Rs. 16.40 lakhs from S/Shri Joy Prakash Sharma and Souren Saha. Since the assessee failed to prove the details of said persons, their addresses and PAN, the ld. AO made addition on unexplained cash credit and added to the income of the assessee. 4. ITA No. 11/Kol/2020 AY 2010-11 Somnath Kesh 6. Aggrieved, the assessee preferred an appeal before the ld. CIT(A), but failed to succeed. 7. Aggrieved, now the assessee is in appeal before this Tribunal raising various grounds including grounds raised on merits as well as legal issue challenging the validity of re-assessment proceedings. Legal ground raised in ground no. 3 is that both the lower authorities below erred both in point out of law and on fact. 8. The Ld. Departmental Representative vehemently argued supporting the orders of both the authorities below. 9. We have heard the rival contentions and perused the material placed before us. The assessee has challenged the addition for unexplained cash credit at Rs. 16.40 lakhs as also challenged the legality/validity of the orders passed by the authorities below. As far as legality of the assessment order passed u/s. 143/147 assessable is concerned, we find that the assessee’s case was selected for scrutiny regarding the source of cash deposit at Rs. 18.31 lakhs on the basis of an information received from AIR about that the alleged cash deposit in the Axis Bank account. We further note during the course of re-assessment proceedings the assessee was able to satisfy the ld.AO about the source and genuineness of said cash deposits in the bank, which was in regard to sale proceeds of kerosene sale of M/s. Mukherjee Oil Agency. The ld. AO was satisfied with this submission and made no addition on account of cash deposits at Rs.18.31 lakhs. While examining the bank account, the ld. AO observed that there are credit entries of Rs.16.40 lakhs, which are loan taken from S/Shri Joy 5. ITA No. 11/Kol/2020 AY 2010-11 Somnath Kesh Prakash Sharma and Souren Saha. The addition for unexplained cash credit has been made for the said unsecured loan. 10. Now it remains an undisputed fact that the ld.AO has not made addition for the reasons recorded u/s.147 of the Act, but have made the addition for some other reasons, which were not mentioned in the reasons recorded for carrying out proceedings u/s. 147 of the Act. 11. Provisions of law is well settled and Hon’ble Bombay High Court in the case of CIT vs Jet Airways Limited (2011) 331 ITR 236 (Bom.) has laid down the ratio that if the AO does not assess income for which reasons are recorded u/s.147, he cannot assess other income u/s. 147. In other words, if the AO has accepted the objection of the assessee and does not assess the income, which was basis of the notice it is not open to him to assess income under some other issue independently. In the instant case the ld. AO did not make any addition for alleged cash deposit and therefore, for making addition u/s. 68 of the Act fresh notice u/s. 148 of the Act should have been served and in absence thereof the ld. AO cannot make addition on other issue, which are not part the part of show cause notice issued u/s.148 of the Act. 12. We, therefore, respectfully following the decision of the Hon’ble Bombay High Court in the case of Jet Airways (supra), hold that assessment proceedings carried out by the ld. AO u/s. 147 of the Act are bad in law and liable to quashed. Since assessment proceedings are held to be void and bad in law the addition made in the hands of 6. ITA No. 11/Kol/2020 AY 2010-11 Somnath Kesh the assessee deserves to be deleted. Thus, legal ground raised by the assesse is allowed. 13. As far as other grounds raised on merit to deal with them is merely academic in nature. Therefore, the same are dismissed being infructuous. 14. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court 19/7/22 Sd/- Sd/- (SONJOY SARMA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER दनांक /Dated :19-07-2022 **PP/SPS आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1.अपीलाथ /Appellant/Somnath Kesh Bandra Gopalpur, Durgapur, Pashim Bardhaman-713212 2. यथ /Respondent/ITO, Ward 2(3), Aaykar Bhawan Annexe, 4 th Fl., Aaykar Bithi, Durgapur-713216 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त- अपील / CIT (A) 5. वभागीय त न ध, आयकर अपील य अ धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड फाइल / Guard file. By order/आदेश से, /True Copy/ Assistant Registrar ITAT, Kolkata