Case Law Details
Shri Praveen Garg Vs ITO (ITAT Delhi)
There is no dispute with regard to the legal proposition that the First Appellate Authority cannot consider new source of income. However, in the present case the A.O. reopened the assessment because it was found that there were cash deposits in several Bank accounts of the assessee which do not match with the returned income shown by the assessee. The A.O, therefore, reopened the assessment on having reason to believe that income chargeable to tax on account of unexplained cash deposits in the Bank accounts of the assessee has escaped assessment. The A.O. called for the details of the Bank accounts from the assessee, but, the assessee did not produce the same. The A.O, however, requested the details of Bank accounts under section 133(6) of the Income Tax Act, 1961 and ultimately assessee agreed that he was maintaining 12 Bank accounts in assessment year 2010-11 and 02 Bank accounts in assessment year 2008-09. The assessee explained that he is working as a commission agent of sale of cloth and chemical and was also engaged in business of discounting of Cheque/Demand Draft/Pay Order and also making payment of electricity bills on behalf of the various factory owners and charge commission. The A.O. asked the assessee to give names and addresses of the factory owners and the businessman and to support such statement. However, no such information have been provided by the assessee. The A.O. in the absence of such information should have consider the cash deposits in the Bank accounts of the assessee as unexplained cash deposits in the Bank accounts and should have made addition under section 69A of the Income Tax Act, 1961. The A.O, however, to the best reasons known to him, accepted the explanation of assessee without any supporting documentary evidences that assessee earned commission thereon. This led the Ld. CIT(A) to look into the same issue at the appellate stage while hearing the appeals of the assessee and the Ld. CIT(A) find justification to enhance the assessment by considering the unexplained cash deposits in the Bank accounts of the assessee which was also considered by the A.O. Since the A.O. in the absence of any evidence on record did not make addition of unexplained cash deposits in the Bank accounts of the assessee and even no details were filed before the Ld. CIT(A), the Ld. CIT(A) was justified in considering the same source of income at appellate stage and was justified in making enhancement. Notice to the assessee as to show cause why income should not be enhanced by making the addition on account of entire cash deposited in the Bank accounts of the assessee clearly support his findings that it was same source considered. The Ld. CIT(A), thus, did not consider a new source of income while making enhancement to the income of the assessee at the appellate stage. The decisions relied upon by the Learned Counsel for the Assessee would not support the case of the assessee and are clearly distinguishable on facts. We, therefore, reject the contention of the Learned Counsel for the Assessee and decide this issue against the assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
Both the appeals by assessee are directed against the common Order of the Ld. CIT(A)-14, New Delhi, Dated 02.01.2019, for the A.Ys. 2008-2009 and 2010-2011.
2. We have heard the Learned Representatives of both the parties through video conferencing and perused the material on record.
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