Case Law Details

Case Name : ACIT Vs Seraj Yusha (ITAT Cuttack)
Appeal Number : ITA Nos.644 & 645/CTK/2012
Date of Judgement/Order : 27/06/2022
Related Assessment Year : 2008-09 & 2009-10

ACIT Vs Seraj Yusha (ITAT Cuttack)

Admittedly, the assessee has disclosed income far an excess of what has been assessed by the AO in his assessment and the assessee has not filed his return but has only filed computation of income before the ld. CIT(A). The deletion of addition made by the AO of Rs.7.15 crores is clearly on the basis of evidence from the Axis Bank itself and no fault in regard to the same can be pointed out. Here what is noticed in the peculiarity that the assessee has offered higher income in the computation of income filed before the ld.CIT(A). The ld. CIT(A) has consequently issued enhancement notice. The ld. CIT(A) after examining the evidence has deleted the above addition as made by the AO. The revenue has contested the same by filing the appeal. What needs to be understood is if the revenue’s appeal is to be accepted then the issue gets restored back to the AO for re-examination in respect of addition representing Rs.7.15 crores. This would mean the setting aside the order of the ld. CIT(A). If that is to happen, the additional income offered by the assessee in the form of computation of income filed before the ld. CIT(A) would stand deleted. The issue would before the ld. AO only in respect of addition made by the AO in respect of Rs.7.15 crores. The bank itself has given confirmation that there are wrong entries and credits in the Axis Bank account as closure of fixed deposits and other deposits from the assessee’s own funds. This addition would also go. This being so, it is brought out in the order only to bring to the attention of the revenue that the revenue should also be careful when filing the appeals against the order of the appellate authorities. Not all orders of the appellate authorities are erroneous; a little care in filing these appeals would go a long way. As we do not find any error in the order of the ld. CIT(A) in the present appeal, the findings recorded by the ld. CIT(A) on this issue are hereby confirmed. Thus, we dismiss the appeal of the revenue filed for A.Y.2009-2010.

FULL TEXT OF THE ORDER OF ITAT CUTTACK

ITA No.644/CTK/2012 is filed by the revenue against the order dated 02.10.2012, passed by the ld. CIT(A)-1, Bhubaneswar in I.T.Appeal No.0183/10-11 for the assessment year 2008-2009. The assessee has filed Cross Objection being CO.No.15/CTK/2013 against the appeal of revenue for A.Y.2008-2009.

2. ITA No.645/CTK/2013 is filed by the revenue against the order dated 02.10.2012, passed by the ld. CIT(A)-1, Bhubaneswar in I.T.Appeal No.0184/10-11 for the assessment year 2009-2010. The assessee has filed Cross Objection being CO.No.16/CTK/2013 against the appeal of revenue for A.Y.2009-2010.

3. At the time of hearing, ld. Counsel on behalf of the assessee submitted that he did not wish to press both the cross objections for which he has given an endorsement to that effect that as per the instructions of his client he does not desire to argue both the cross objections filed against both the appeals of revenue. Consequently, both the cross objections filed by the assessee stands dismissed as not prosecuted.

4. In regard to appeal of the revenue in ITA No.644/CTK/2012, it was submitted by the ld. AR that the tax effect in this appeal is below Rs.50 lakhs, which is not maintainable as per the CBDT Circular No.17/2019, dated 8th August, 2019. Ld. CIT-DR vehemently opposed the above claim of the ld. AR. It was the submission of the ld. CIT-DR that the assessee has raised the technical grounds in the cross objections and, therefore, the revenue’s appeal should survive.

5. As the assessee’s cross objections have been dismissed as not pressed and the tax effect in the revenue’s appeal in ITA No.644/CTK/2012 is admittedly below the prescribed tax limit for filing the appeal before the Tribunal, therefore, the appeal of the revenue in ITA No.644/CTK/2012 is dismissed on account of low tax effect as prescribed by the CBDT Circular No.17/2019, dated 8th August, 2019. Thus, appeal of the revenue filed for A.Y.2008-2009 is dismissed.

6. In respect of the appeal of revenue in ITA No.645/CTK/2012 for A.Y.2009-2010, it was submitted by the ld. CIT-DR that the assessment had been completed u/s.144 of the Act on account of non-compliance. It was the submission that the AO had made addition of Rs.7.15 crores representing the various credits as appeared in the bank account of the assessee maintained with Axis Bank, Bhubaneswar being account No.024010100413312. It was the submission before the ld. CIT(A) that the assessee had filed the computation of income which showed an income of Rs.11,44,82,364.25 as against the assessed income of Rs.9,69,93,502/-. It was the submission of ld.CIT-DR that the ld. CIT(A) had deleted the addition of Rs.7.15 crores made by the AO as unexplained cash credits by holding that the credits were basically transfers from the assessee’s own bank account, clearing credit through cheque, auto sweep credit from the flexi fixed deposit and closure proceeds of the fixed deposit as also wrong entries by the bank. Ld. CIT-DR drew our attention to para 5.1 of the order of the CIT(A), which is extracted herein below :-

5.1 The AO has made an addition of Rs.7,15,00,000/- as unedplained credit u/s.68 of the Act. The said amount consists of various amounts credited in different dates in Axis Bank A/c No.024010100413312. The details of credit subject of addition are as under :-

Date Amount (in Rs.)
8.9.2008 15,00,000
11.11.2008 1,00,00,000
18.11.2008 99,65,000
22.11.2008 15,35,000
11.12.2008 2,00,00,000
12.12.2008 85,00,000
31.12.2008 2,00,00,000
Total 7,15,00,000

The above credits are explained by the appellant as under :

Date

Amount (Rs.) Particulars
08.09.2008 15,00,000/- Transfer from own bank account with SBI, Barbil
11.11.2008 1,00,00,000/- Clearing Credit vide Ch.No.504491 from Serajuddin & Co.
18.11.2008 99,65,000/- Auto Sweep Credit from Flexi Fixed Deposit No. 024010401009211
22.11.2008 15,35,000/- Closure proceeds of Flexi Fixed Deposit No.024010401009211
11.12.2008 2,00,00,000/- Wrong entry by Bank
12.12.2008 85,00,000/- Wrong entry by Bank
31.12.2008 2,00,00,000/- Wrong entry by Bank
Total : 7,15,00,000/-

It is further explained that the amount of Rs.1 crore received from Serajuddin & Co. is remuneration and already offered to tax. The credit of Rs.15 lacs is transfer from assessee’s account with SBI to Axis Bank account. The credits of Rs.99,65,000/- and Rs.15,35,000/- represent credit out of flexi fixed deposits which is out of disclosed income. The last three entries are wrong entries by the Bank which have been reversed by the Bank. I have checked the bank account with SBI which shows that an amount of Rs.15 lacs have been debited and credited to. Axis Bank account. The credit of Rs.1 crore is on account of partner’s remuneration from Serajuddin & Co. as per the certificates/ledger copy of accounts filed. As per the bank statement, the credits of Rs.99,65,000/- and Rs.15,35,000/- are out of flexi fixed deposits with the same bank. The wrong credit of Rs.2 crores have been reversed on 11.12.2008, the wrong credit of Rs.85,00,000/- has been reversed on 13.12.2008 and the wrong credit of another Rs.2 crores has been reversed on 1.1.2009. In view of the same, the credits. in Axis Bank having been explained are no longer unexplained credits u/s.68. Accordingly, the addition of Rs.7,15,00,000/- is deleted.

7. It was also the submission of the ld. CIT-Dr that the ld. CIT(A) ought not to have deleted the addition of Rs.7.15 crores. It was the submission that the amount of Rs.7.15 crores added by the AO on account of unexplained cash credits should have been made to Rs.11,44,82,364.25 as offered by the assessee before the ld. CIT(A). It was the submission that the assessee had not filed revised return but has only offered the income by way of computation of income before the ld. CIT(A). He vehemently opposed the order of ld. CIT(A).

8. In reply, ld. AR vehemently supported the order of ld. CIT(A). It was the submission that the assessee had in fact offered more income than what has been assessed by the AO. It was the submission that the amount of Rs.7.15 crores has been deleted only on the basis of confirmation of the Axis Bank. It was the further submission that the order of the ld. CIT(A) is liable to be confirmed.

ITAT advises a little care in filing appeals to dept as all orders of appellate authorities are not erroneous

9. We have considered rival submissions.

10. Admittedly, the assessee has disclosed income far an excess of what has been assessed by the AO in his assessment and the assessee has not filed his return but has only filed computation of income before the ld. CIT(A). The deletion of addition made by the AO of Rs.7.15 crores is clearly on the basis of evidence from the Axis Bank itself and no fault in regard to the same can be pointed out. Here what is noticed in the peculiarity that the assessee has offered higher income in the computation of income filed before the ld.CIT(A). The ld. CIT(A) has consequently issued enhancement notice. The ld. CIT(A) after examining the evidence has deleted the above addition as made by the AO. The revenue has contested the same by filing the appeal. What needs to be understood is if the revenue’s appeal is to be accepted then the issue gets restored back to the AO for re-examination in respect of addition representing Rs.7.15 crores. This would mean the setting aside the order of the ld. CIT(A). If that is to happen, the additional income offered by the assessee in the form of computation of income filed before the ld. CIT(A) would stand deleted. The issue would before the ld. AO only in respect of addition made by the AO in respect of Rs.7.15 crores. The bank itself has given confirmation that there are wrong entries and credits in the Axis Bank account as closure of fixed deposits and other deposits from the assessee’s own funds. This addition would also go. This being so, it is brought out in the order only to bring to the attention of the revenue that the revenue should also be careful when filing the appeals against the order of the appellate authorities. Not all orders of the appellate authorities are erroneous; a little care in filing these appeals would go a long way. As we do not find any error in the order of the ld. CIT(A) in the present appeal, the findings recorded by the ld. CIT(A) on this issue are hereby confirmed. Thus, we dismiss the appeal of the revenue filed for A.Y.2009-2010.

11. In the result, both appeals of the revenue and cross objections of the assessee are dismissed.

Order dictated and pronounced in the open court on 27/06/2022.

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