Shri.B.R.Krishnamurthy, Tumkur V. ITO-Ward-2, Tumkur

ITA 1706/BANG/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5642 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 28-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMAL ANAND
• Assessee Lawyers: K KIRAN KUMAR
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1706 / BANG/201 6 ASSESSMENT YEAR : 20 10 - 11 SHRI B.R. KRISHNAMURTHY, PROP: S.L.N JEWELLERS, NO. N H 206, B H ROAD, GUBBI TOWN, TUMKURDIST 572 216. PAN: AFKPK 4345K VS. THE INCOME TAX OFFICER, WARD 2, TUMKUR. APPELLANT RESPONDENT APPELLANT BY : SHRI K. KIRAN KUMAR, ADVOCATE RESPONDENT BY : SHRI VIMAL ANAND, ADDL. CIT (DR) DATE OF HEARING : 1 8 .01.2018 DATE OF PRONOUNCEMENT : 24 .0 1 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A) 7, BANGALORE DATED 17.08.2016 FOR ASSESSME NT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF ASSESSMENT MADE U/S.143(3) R.W.SEC. 147 OF THE INCOME-TAX ACT, 1961, IS WITHOUT JURISDICTION AND, THEREFORE, LIABLE TO BE ANNULLED. 2. THE INITIATION OF PROCEEDING U/SS.147 /148 OF TH E INCOME-TAX ACT, 1961, TO GATHER MATERIALS AS TO THE SOURCE FOR THE CASH DEPOSIT OF RS.32,00,000 TO CAVERYKALPATHARUGRAMEENA BANK, IS W ITHOUT JURISDICTION. 3. BOTH CIT (A) AND THE ASSESSING OFFICER HAVE ERRE D IN REJECTING THE EXPLANATION THAT THE DEPOSIT OF CASH OF RS.32,00,00 0 WITH CAVERYKALPATHARUGRAMEENA BANK AND ITS WITHDRAWAL WI THIN 29 DAYS OF THE SAID DEPOSIT WERE MADE BY AND BELONGS TO HIN DU UNDIVIDED FAMILY OF WHICH MR.B.R.KRISHNAMURTHY (APPELLANT) WA S THE KARTHA. ITA NO.1706/BANG/2016 PAGE 2 OF 3 4. SINCE - A) THE ADDITIONS (CREDITS) TO CAPITAL ACCOUNT HAVE BEE N DECLARED AS INCOME; B) THE ASSESSING OFFICER VERIFIED DURING THE COURSE OF ASSESSMENT ALL THE 'ASSETS AND LIABILITIES' OF THE ASSESSEE; C) THE ASSESSEE AS KARTH OF HUF HAS CONFIRMED THE TRAN SACTION THAT THE DEPOSIT TO BANK OF RS.32,00,000 AND ITS WITHDRA WAL WITHIN 29 DAYS FROM THE DATE OF DEPOSIT, AS PERTAINS TO HUF; D) THE THERE WAS NO ASSET FOUND DURING THE COURSE OF S URVEY AS REPRESENTING THE IMPUGNED ADDITION OF RS.32,00,000; THE ASSESSING OFFICER AS WELL AS CIT(A) OUGHT TO HA VE ACCEPTED THE DETERMINATION OF INCOME ON THE BASIS OF NET INCREAS E IN WEALTH/CAPITAL AS BASIS FOR DETERMINING INCOME OF THE ASSESSEE U/S .69 OF THE INCOME- TAX ACT, 1961. 5. SINCE RS.32,00,000 WAS NOT THE MONEY EARNED BY T HE ASSESSEE, THE ADDITION OF THE SAME WITHOUT EXERCISING DISCRETION U/S.69 OF THE INCOME-TAX ACT, 1961, IS AN ERROR. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT REOP ENING IS BAD IN LAW. AT THIS JUNCTURE, THE BENCH WANTED TO KNOW AS TO WHETHER TH E ASSESSEE HAS OBTAINED THE REASONS RECORDED BY THE AO FOR REOPENING. IN R EPLY, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE REASONS RECORDED BY AO ARE AVAILABLE ON PAGE NO. 74 OF THE PAPER BOOK. THE BENCH ALSO WANTED TO KNOW A S TO WHETHER ANY OBJECTION WAS RAISED BY ASSESSEE AGAINST REOPENING BEFORE AO AS PER THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF GKN DRIV ESHAFTS (INDIA) LTD. VS. ITO &ORS. AS REPORTED IN 259 ITR 19. IN REPLY, IT WAS SUBMITTED BY HIM THAT ASSESSEE HAS NOT RAISED ANY OBJECTION BEFORE THE AO BUT THIS IS A LEGAL ISSUE WHICH CAN BE RAISED AT ANY STAGE AND THEREFORE, IT SHOULD BE DECIDED. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT AS PER THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF GKN DRIV ESHAFTS (INDIA) LTD. VS. ITO &ORS. (SUPRA), IN CASE OF REASSESSMENT, THE ASS ESSEE IS SUPPOSED TO FILE THE RETURN OF INCOME IN PURSUANCE TO THE NOTICE ISS UED U/S. 148 AND THEREAFTER, IF ASSESSEE SO DESIRES, HE MAY SEEK COPY OF REASONS R ECORDED BY THE AO FOR ISSUING NOTICE U/S 148. THE ASSESSING OFFICER IS BO UND TO FURNISH REASONS WITHIN ITA NO.1706/BANG/2016 PAGE 3 OF 3 A REASONABLE TIME. ON RECEIPT OF REASONS, THE ASSES SEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER AND THEREAFTER , HE SHOULD PROCEED TO FRAME THE ASSESSMENT. IN THE PRESENT CASE, THE ASS ESSEE HAS OBTAINED THE REASONS RECORDED BY THE AO BUT THEREAFTER, THE ASSE SSEE HAS NOT RAISED ANY OBJECTION AGAINST THE VALIDITY OF REOPENING BEFORE THE AO & CIT (A). THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE TRIBU NAL. UNDER THESE FACTS, I FEEL THAT THIS ISSUE SHOULD GO BACK TO THE FILE OF AO FOR FRESH DECISION. ACCORDINGLY, I SET ASIDE THE ORDER OF CIT(A) AND RE STORE THE MATTER BACK TO THE FILE OF AO WITH THE DIRECTION THAT THE ASSESSEE MAY RAISE OBJECTION BEFORE THE AO AGAINST VALIDITY OF REOPENING AND IF THE ASSESSE E DOES SO, THEN THE AO SHOULD PASS A SPEAKING ORDER FOR DISPOSING OF THE O BJECTIONS RAISED BY THE ASSESSEE. IF IT IS FOUND THAT OBJECTIONS ARE NOT V ALID THEN HE SHOULD FRAME ASSESSMENT AFRESH AND IF THE OBJECTIONS ARE FOUND V ALID, NOTHING REMAINS TO BE DONE. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR REGARDING THE GROUNDS RAISED BY THE ASSESSEE ON MERIT. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 24 TH JANUARY, 2018. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.