This is an appeal filed by the department against the order dated 26-03-2014 passed by the Commissioner of Income Tax, Delhi-XI, New Delhi, under section 263 of the Income Tax Act, 1961, relating to A.Y. 2007- 08.
2. Brief facts culminating to the proceedings under section 263 are that in this case original assessment order was passed under section 144 of the Income Tax Act dated 18-12-2009 contained at pages 13 & 14 of the PB. As against the returned income of Rs. 1,11,998, the assessment was completed at a total income of Rs. 14,11,848 after making addition of Rs. 12,99,850 under section 68 of the Income Tax Act. The total cash of Rs. 10,99,850 deposited by the assessee in his saving bank account, maintained with Centurion Bank of Punjab Ltd., East Patel Nagar Market, New Delhi, during the period relevant to assessment year under consideration, was treated as unexplained as assessee did not attend the proceedings. Assessee preferred appeal before the learned Commissioner (Appeals), who, vide his order dated 14-11-2011, contained at pages 40 to 52 of the PB, dismissed the assessee’s appeal. The assessee preferred appeal before the ITAT, which vide its order dated 15-10-2012, contained at pages 53 to 59 of the PB, restored the matter to the file of the assessing officer with the direction to allow one final opportunity to the assessee to establish the nexus of his business receipts with cash deposited in the bank as also to explain the nature of transaction in the said account and, thereafter, pass appropriate orders in accordance with law. Consequent to these directions, the assessing officer, inter alia, issued notice dated 2-9-2013 contained at pages 73 to 75 of PB, wherein the assessing officer, inter alia, observed as under:
“The learned ITAT has too issued directions for the assessee to place best evidence before the assessing officer, so that matter could be disposed or expeditiously . It has also specifically been ordered that ” In (the event the assessee does not avail the opportunity provided by the assessing officer, or does not establish the nexus of his business receipts with the cash deposited in the bank a/c, the addition shall stand confirmed”, (para- 6 at page, 12). Vide your reply dated 12-04-2013, submitted through your authorized representative in response to my predecessor’s letter/ notice dated 20-03-2013 for 28-03-2013, you have only furnished copy of your bank a/c, computation of income. Neither narration of bank entries nor any supporting documentary evidence to prove the nexus of each deposits with business receipts, as pointed out by the appellate authorities, have now been furnished.
Your attention is further drawn to para 6 at page 11 & 12 of the learend ITAT’s order, wherein attention has been drawn that the cash deposited in bank a/c are almost 40% higher than the business receipts declared at Rs. 9,56,780 on which provisions of section 44AF have been applied. It has also been observed that “Whether the entire cash was deposited in the bank, has not been established by the assessee. We find from the copy of bank statement that cash of Rs. 18,800….. there are number of entries of deposit of cash and payments in cash, including to one Kirpal Singh. Not even one entry has been explained before the assessing officer or the learned Commissioner (Appeals) and even before us. The learned authorized representative on behalf of the assessee, though relied upon number of judgments, did not even attempt to correlate the deposits in cash in the bank account of the assessee with his business receipts. The onus is upon the assessee to establish that the cash deposited in the bank originated from his turnover of the business”.
In view of the above referred observations of the Appellate authorities, you are hereby given an opportunity to furnish and produce the following:-
1. Produce sale bills to verify the correctness of sales disclosed for assessment and verify its nexus with cash deposited in bank a/c.
2. Detailed note ‘as to your business activity in past 2 years and subsequent 2 years. Whether facts similar, bank a/c same. If yes, furnish copy of computation, return and bank details.
3. Narration and documentary evidence for credits other than those not taken as business receipts by you, failing which why these may not be treated as unexplained cash deposits as per section 68 of the Income Tax Act.
4. Produce cash book to verify as to whether the entire cash sales were deposited in bank a/c and nothing remained to be deposited.
5. Documentary evidence with name and address of the parties for cash deposits mentioned by the learned ITAT in para-6 of page-11, and for any other similar type of cash deposits in your bank, outside Delhi to verify that these represent your retail sale receipts only & as well as whether the entire sale amount having been deposited.
6. Random view of cash deposit & withdrawal in the beginning of the year reveal the position as under –
