Sh. Kulwant Singh, Ludhiana vs Department Of Income Tax

of ld. CIT(Appeals)-I Ludhiana dated 30.09.2013 for

assessment year 2009-10 challenging the quashing of the

re-opening of the assessment under section 147/148 of

the Income Tax Act and in deleting the addition of Rs.

50,50,000/- in bank account.

2. Briefly the facts of the case are that assessee is

agriculturist. The case was taken up for scrutiny

assessment after re-opening done under section 147/148

of the Act. The Assessing Officer noted in the assessment 2

order that assessee had made deposit of Rs. 50,50,000/-

with Bank of India, Ludhiana. On the basis of this

information, the case was reopened. The explanation of

the assessee was called for. However, in the absence of

any representation from the side of the assessee,

Assessing Officer made addition of Rs. 50,50,000/- on

account of unexplained deposit with Bank of India,

Ludhiana.

3. The assessee challenged the re-opening of the

assessment and addition of Rs. 50,50,000/- before ld.

CIT(Appeals). The assessee submitted before ld.

CIT(Appeals) that assessee did not have any bank account

in Bank of India, Ludhiana. Therefore, action of the

Assessing Officer is wholly unjustified. The comments of

the Assessing Officer were called for on the submissions

of the assessee. The Assessing Officer in his remand

report submitted that department has received

information that assessee had deposited cash amounting

to Rs. 50,50,000/- in his Saving Bank account on the

basis of which, assessment was reopened. It was also

reported that though information was received of above

cash deposits by the assessee in the saving bank account

but name of the bank was not mentioned as per

information placed on record. The Assessing Officer has

mistakenly mentioned the name of the bank as Bank of

India.

3

3(i) The assessee in the rejoinder submitted before ld.

CIT(Appeals) that he is agriculturist and has agriculture

income only and he has not deposited any amount with

Bank of India, Ludhiana. Therefore, re-opening of the

assessment is invalid and that addition is also wholly

unjustified. The Assessing Officer did not have any

reason to believe that income escaped assessment. The

assessee also relied upon certain decisions in support of

the contention. The assessee also filed affidavit

confirming therein that assessee had not deposited any

amount in his Saving Bank account in India during the

year under consideration.

4. The ld. CIT(Appeals), considering the facts of the

case in the light of the submissions of assessee and

remand report, quashed the re-opening of the assessment

as well as deleted the addition on merits. The findings of

ld. CIT(Appeals) in para 7 of the order are reproduced as

under:

" 7. I have considered the facts of the case and it is seen that the notice u/s 148 had been issued to the appellant on the basis of information that he had deposited an amount of Rs.50,50,000/- in a bank account. It has been accepted by the Assessing Officer in the remand proceedings that the only information available with the department at the time of reopening of the assessment was that a person with the same name as that of the assessee had deposited Rs.50,50,000/- in a bank account, details of which were not available. The Assessing Officer on the basis of this information proceeded to reopen the 4

case for the year under consideration. I do not think that the limited information in possession of the Assessing Officer was sufficient to form a belief that income to the tune of Rs. 50,50,000/- had escaped assessment. The information, in fact cannot be said to be complete till the account number and the bank branch in which the said count is owned by the assessee are brought on record before assessment is reopened. It is interesting to note that even after completion of the assessment and during the remand proceedings, the Assessing Officer has not been able to bring on record any further information to fortify the original information. So what transpires as on date is that the Assessing Officer proceeded to assess the income of the appellant merely on the ground that the AIR information contained his name and figure of Rs.50,50,000/- which was not put to further verification by the Assessing Officer either at the time of reopening or at the time of assessment. The assessee on the other hand filed an affidavit stating therein that he had not deposited any amounts in any saving bank account in India and the Assessing Officer on being given the opportunity to contradict the assessee's statement made therein could not bring on record the desired information. It finally settles that there has not been any information against the assessee to warrant a belief that he had deposited an amount of Rs. 50,50,000/- in a specified bank account. Therefore there is no logical basis for the Assessing Officer to proceed to reopen the assessment and the reopening cannot be held to be valid in the eyes of law. Even otherwise with regard to the merits of the case, no addition is called for as even during the remand proceedings no evidence could be brought on record to establish that the assessee owned a bank account in which an amount of Rs.50,f50,000/- has been deposited. In the circumstances, the assessee succeeds with regard to ground of appeal at serial no. 2 and 3."

5 5. We have considered the rival submissions and

material available on record and do not find any

justification to take a different view as have been taken by

the ld. CIT(Appeals). It is a fact that though the revenue

received some information that assessee has made deposit

of Rs. 50,50,000/- with Bank of India, Ludhiana but in

fact, no account was found to have been maintained by

the assessee with Bank of India, Ludhiana. Therefore,

there is no question of making any deposit of Rs.

50,50,000/- with the said bank. The assessee denied

deposit of any amount in this bank account and even at

the later stage before ld. CIT(Appeals), the assessee filed

an affidavit to the effect that he had not deposited any

amount in any saving bank account in India during the

year under consideration. The revenue has not brought

any material against the assessee for making the addition

of the aforesaid amount. The contentions of the assessee

have not been rebutted through any evidence. The

Assessing Officer wanted to make addition of Rs.

50,50,000/-. Therefore, burden would be upon Assessing

Officer to prove that in fact assessee made cash deposit of

Rs. 50,50,000/- in Bank of India, Ludhiana. Even now

Department is not able to tell in which Bank assessee has

made cash deposit. Since, revenue failed to establish any

connection with the bank deposit with Bank of India,

Ludhiana in the name of assessee, therefore, ld.

CIT(Appeals) was justified in deleting the addition. We

confirm his order and dismiss this ground of appeal of the 6

revenue. So far as the re-opening of the assessment is

concerned, it is left with academic nature only because re-

opening was made with regard to bank deposit of Rs.

50,50,000/- only. Since we have confirmed deletion of the

addition of Rs. 50,50,000/- therefore, there is no need to

decide this issue at this stage.

6. In the result, departmental appeal is dismissed.

Order pronounced in the Open Court on 15th

July,2015.

Sd/- Sd/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 15th July,2015. 'Poonam' Copy to:

The Appellant, The Respondent, The CIT(A), The CIT,DR

Assistant Registrar, ITAT Chandigarh