DCIT, Circle-1(2), Bhubaneswar, Bhubaneswar V. Md.Mafazzalur Rahaman, Keonjhar

ITA 144/CTK/2013

AI Insights

This case involves an appeal by the revenue against the order of the CIT(A)-1, Bhubaneswar, which had deleted the additions made by the Assessing Officer (AO) regarding fixed deposits and interest income found during a search operation at the assessee's premises. The AO had initially added Rs.6.5 crores from fixed deposits and interest income to the assessee's taxable income for the assessment year 2008-09. The CIT(A) later removed these additions after the assessee provided a computation of income showing a total income of Rs.9,16,66,750, which included the interest income. The tribunal supported the CIT(A)'s decision, noting that the assessee had sufficiently explained the sources of the deposits and that the fixed deposits in the names of family members could be sourced from the income declared by the assessee.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 300284 (ITAT-CUTTACK)
• Duration Of Justice: 9 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-12-2022
• Assessment Year: 2008-2009
• Appeal Filed On: 03-03-2013
• Other Referred Cases: Goetze (India) Ltd. Vs. CIT 284 ITR 323 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE AND ARUN KHODPIA, ACCOUNTANT MEMBER ITA No. ACIT, Circle Bhubaneswar. PAN/GIR No (Appellant Md Maffazalur Serajuddin Square (Near Masjid), Keonjhar (Appellant Per Bench This is the ld CIT(A) assessment year objection in the appeal filed by the revenue. IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER A No.144 /CTK/2013: Assessment year: ACIT, Circle-1(2), Bhubaneswar. Vs. Md Maffazalur Rahman, Serajuddin Square (Near Masjid), Keonjhar. PAN/GIR No.ABYPR 0862 J (Appellant) .. ( Respondent C.O.No.34/CTK/2013 (in ITA No.144/CTK/2013 Assessment year: 2008-09 Md Maffazalur Rahman, Serajuddin Square (Near Masjid), Keonjhar Vs. ACIT, Circle Bhubaneswar (Appellant) .. ( Respondent Assessee by : Shri Sunil Mishra, AR Revenue by : Shri M.K.Gautam, CIT Date of Hearing : 29/12 Date of Pronouncement : 29/12 O R D E R This is an appeal filed by the revenue against the order of the ld CIT(A)-1,Bhubaneswar in Appeal No.0278/10/ assessment year 2008-09. The assessee objection in the appeal filed by the revenue. Page1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER year: 2008-09 Md Maffazalur Rahman, Serajuddin Square (Near Masjid), Keonjhar. Respondent) 3 ACIT, Circle-1(2), Bhubaneswar Respondent) Shri Sunil Mishra, AR , CIT DR 12/2022 12/2022 against the order of 0278/10/-11 for the 09. The assessee has filed cross ITA No.144 /CTK/2013: C.O.no.34/CTK/13 Assessment year: 2008-09 Page2 | 6 2. Shri Sunil Mishra, ld AR appeared for the assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. 3. At the time of hearing, ld AR did not wish to press the cross objection and has endorsed in the file to this effect. Consequently, the cross objection filed by the assessee stands dismissed. 4. In respect of Revenue’s appeal, it was submitted by ld CIT DR that there was search on the premises of the assessee on 28.5.2008. Notice u/s.153A came to be issued on 5.3.2010. No return of income was filed and there was no compliance. Consequently, the assessment came to be completed u/s.144 of the Act, wherein, the AO had brought to tax the fixed deposits found during the course of search to an extent of Rs.6.5 crores. It was the submission that Rs.5 crores was the fixed deposit in the name of the assessee and Rs.1.5 crores was the fixed deposit in the name of family members of the assessee. It was the further submission that the Assessing Officer had further brought to tax the interest income received by the assessee during the relevant assessment year. The interest income from the SB account to an extent of Rs.4,77,414/- and interest income from fixed deposit was computed at Rs.39,38,724/-. It was the submission that on appeal, the ld CIT(A) had deleted ITA No.144 /CTK/2013: C.O.no.34/CTK/13 Assessment year: 2008-09 Page3 | 6 the addition on the ground that the assessee had filed his computation of income, wherein, total income was disclosed at Rs.9,16,66,750/-. It was the submission that the ld CIT(A) had called for a remand report and in the remand proceedings, the Assessing Officer had mentioned that the assessee had the source for Rs.5 crores for fixed deposit. It was the submission that no comment of the Assessing Officer was available in respect of Rs.1.5 crores fixed deposits in the name of the family members of the assessee. It was the further submission that the ld CIT(A) had deleted the interest income, which had been added by the Assessing Officer on the ground that in the computation of income to an extent of Rs.9.16.66.750/- offered by the assessee, the interest component had been offered. It was the submission that admittedly, the ld CIT(A) has enhanced the assessment. It was the submission that the ld CIT(A) ought not to have deleted the addition in respect of the fixed deposits. It was the submission that the assessee did not explain the source for the fixed deposits and in any case, there was no explanation in respect of the fixed deposits in respect of the family members in respect of Rs.1.5 crores. It was the further submission that the order of the ld CIT(A) is liable to be reversed to the extent he has granted relief to the assessee. ITA No.144 /CTK/2013: C.O.no.34/CTK/13 Assessment year: 2008-09 Page4 | 6 5. In reply, ld AR vehemently supported the order of the ld CIT(A). It was the submission that the assessee having been received the amount of Rs.9,16,66,750/- during the relevant assessment year and same having been offered to tax and the taxes having been paid, there was adequate source for the fixed deposit of Rs.6.5 crores in its entirety. It was the further submission that the addition of Rs.1.5 crores, even if it is to be considered, cannot be considered in the hands of the assessee insofar as it has been admitted by the AO that the fixed deposits are in the name of the family members and not that of the assessee. 6. We have considered the rival submissions. A perusal of the facts clearly shows that the assessee has filed his computation of income before the ld CIT(A) [page 4 of order of the ld CIT(A)], which shows a total income of Rs.9,16,66,750/-. This is as against the assessment made in the case of the assessee, wherein, the addition of Rs.6.5 crores has been made and interest addition to an extent of Rs.44,16,138/-. Admittedly, the ld CIT(A) has also called for the remand report from the Assessing Officer. The assessee has admittedly shown higher income in its computation of income and consequently, the ld CIT(A) has deleted the disallowance but has enhanced ITA No.144 /CTK/2013: C.O.no.34/CTK/13 Assessment year: 2008-09 Page5 | 6 the assessment by directing the AO to bring to tax the income offered by the assessee in its computation of income. Here, we must mention that we are live to the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT 284 ITR 323 (SC), wherein, it has been clearly held that in the absence of a revised return being filed, only the Appellate Authority can direct the Assessing Officer to consider the assessment on the basis of the computation of income, which is filed in the course of appellate proceedings. A perusal of the order of the ld CIT(A) clearly shows that the ld CIT(A) has called for the remand report and the Assessing Officer has accepted that the assessee has the source for the fixed deposit of Rs.5 crores. Admittedly, the amount of s.1.5 crores of fixed deposit in the name of family members can adequately be sourced from the income offered by the assessee. Even otherwise, said addition cannot be made in the hands of the assessee as the fixed deposits are not in the name of the assessee and it is a search case and the assessment has to be done as per the evidence found during the course of search and fixed deposits are in the name of family members. 7. Coming to the issue of interest, admittedly, the assessee has shown actual interest income in the computation of income and the ld CIT(A) has directed for taxing for the actual interest income. This being so, we find no error in the findings of the ld CIT (A), which is hereby confirmed. ITA No.144 /CTK/2013: C.O.no.34/CTK/13 Assessment year: 2008-09 Page6 | 6 8. In the result, appeal of the revenue and the cross objection of the assessee are dismissed. Order dictated and pronounced in the open court on 29/12/2022. Sd/- sd/- (Arun Khodpia) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 29/12/2022 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Assessee : Md Maffazalur Rahman, Serajuddin Square (Near Masjid), Keonjhar 2. The revenue: ACIT, Circle-1(2), Bhubaneswar. 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT-1, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//