IN INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI, Before Shri A. Mohan Alankamony, Accountant Member & Shri Duvvuru RL Reddy, Judicial Member . I T.A. No. 2328 Mds 2015 Assessment Year :2011-12 Shri C. Shankar, Income Tax Officer, Old No. 2, New No.3, Vs. Business Range XV(3), 1st Floor, 5th Street, Alwarpet, Chennai. Chennai 600 018. [PAN:AYYPS1959A] ( Appellant) ( Respondent) Appellant by : Shri S. Sridhar, Advocate Respondent by : Shri Supriyo Pal, JCIT Date of hearing : 14.07.2016 Date of Pronounce ment : 07.10.2016 ORDER PER DUVVURU RL REDDY, JUDICIAL MEMBER: This appeal filed by assessee is directed against order of ld. Commissioner of Income Tax (Appeals) 4, Chennai, dated 28.10.2015 relevant to assessment year 2011-12. only effective ground raised in appeal of assessee is that ld. CIT(A) has erred in confirming addition of .48,56,103 - made under section 69A of Income Tax Act, 1961 [ Act in short]. 2 I.T.A. No.2328 M 15 2. Brief facts of case are that assessee is individual and filed his return of income declaring total income at .8,64,210 -. case of assessee was selected for scrutiny and notice under section 143(2) of Act was issued on 10.09.2012. Assessing Officer has noticed that assessee was operating three bank accounts and examination of source for cash deposits made in bank accounts was purpose of scrutiny, he issued notice under section 142(1) of Act to verify accounts of assessee. As per final accounts, assessee was stated to have operated two bank accounts, one at Oriental Bank of Commerce and other at HDFC Bank. However, As per AIR data, Assessing Officer has noticed that assessee has held another bank account at Vijaya Bank and maximum transactions undertaken through this third account was hidden from view of Department. Therefore, copies of statement of bank accounts were obtained under section 133(6) of Act and notice under section 142(1) of Act was issued requiring assessee to explain source for cash deposits made in all three accounts. salient observations of Assessing Officer in para 3 to 6 are reproduced as under: 3. In response to same, authorized representative filed reply on 22.01.2014, but same did not address requirements of department. In order to prove source of cash deposits, assessee has to necessarily provide cash book and bank book for financial year 2010-11. Even on repeated insistence, books of accounts in manner sought was never provided. notice u s 142(1) dated 13.01.2014 is self-explanatory and reply provided on 22.01.2014 did not attend to essential requirements, it 3 I.T.A. No.2328 M 15 is pertinent to mention that under similar circumstances, while return of income for AY 2010-11 was under scrutiny, assessee had provided bank book and cash book and from particular gathered in those books of accounts, assessment was completed making addition of .1,19,07,402 -. constituents of this addition is unexplained cash deposited in bank account of .45,82,402 - and unexplained investment in money lending of .73,25,000 -. 4. Since case book and bank book produced during course of assessment for AY 2010-11 formed basis for this additions, authorized representative in order to thwart such attempts to arrive at correct income of assessee, desisted from providing such accounts in year under consideration. Under circumstances, this office had to arrive at peak value of cash deposits by applying principle of taxation that evolved in AY 2010-11 in order to compute taxable income for year. 5. cash deposits and withdrawals in all three bank accounts put together, on different dates were taken into consideration and as per tabulation provided as Annexure, peak value in cash deposits after providing deductions for withdrawals in cash is attained on 21.03.2011 and this value is .94,38,505 -. As started earlier, unexplained cash assessed u s. 69A in AY 2010-11 is .45,82,402 -. After telescoping this value which is already brought to tax, assessee is not in position to offer explanation with regard to source for balance cash deposit of .48,56,103 -. Accordingly, same is brought to tax u s. 69A of IT Act, 1961. 6. It needs to be agreed that unexplained investment in money lending assessed u s. 69B during AY 2010-11 is rotated during year under consideration and therefore, having undertaken exercise of taxing unexplained investment in money lending in AY 2010-11, necessity does not arise during year under consideration to repeat same procedure. Further since investment method being cash deposits in bank accounts is adopted in computing taxable income, interest earned during year also gets telescoped in cash deposits and hence, interest earned on money lending balances is not brought to tax separately. 2.1 With above observations, Assessing Officer made addition of .48,56,103 - under section 69A of Act and completed assessment under section 143(3) of Act on 31.03.2014. 4 I.T.A. No.2328 M 15 3. assessee carried matter in appeal before ld. CIT(A). After considering facts of case, ld. CIT(A) confirmed addition made by Assessing Officer. 4. On being aggrieved, assessee is in appeal before Tribunal and ld. Counsel for assessee strongly contended that ld. CIT(A) went in wrong to sustain addition made by Assessing Officer since ld. CIT(A) failed to appreciate that alternative contention for considering peak credit from bank accounts from analysis of statement of account was not considered properly and ought to have appreciated that misreading of decisions for rejecting stand of assessee would vitiate his decision and pleaded that addition made should be deleted. 5. On other hand, ld. DR supported order passed by authorities below. 6. We have heard both sides, perused materials available on record and gone through orders of authorities below. It is admitted fact that in return filed by assessee for assessment year 2011-12, assessee has not revealed complete particulars especially not disclosed bank account maintained with Vijaya Bank and moreover assessee has not produced books of accounts for verification of credits and debits in said account. After obtaining statement of bank accounts 5 I.T.A. No.2328 M 15 under section 133(6) of Act, when assessee has not furnish proper explanation with regard to source for cash deposited in financial year 2010-11 in bank account maintained with Vijaya Bank, Assessing Officer should have brought to tax entire cash deposits made by assessee. Whatever business it may be assessee was engaged, but, each assessment year is different and every assessment has to be made invariably when assessee furnish true and complete particulars of income and expenditure and Assessing Officer should ensure that no income should escape assessment. In assessment order, Assessing Officer has observed that assessee has disclosed operation of two bank accounts and declared income of assessee at .8,64,210 -. We are unable to find details with regard taxable income by maintaining two bank accounts separately and total undisclosed income by maintaining third bank account with Vijaya Bank wherein assessee has made transactions with this bank account. It may be fact that assessment for assessment year 2010-11 was also under scrutiny and it is not clear that during financial year 2009-10 also assessee was maintaining three bank accounts to arrive at proportionate undisclosed income by clubbing credit entries in all three bank accounts maintained in financial year 2010-11 and reducing therefrom amounts withdrawn during financial year relevant to assessment year under consideration. In absence of complete particulars of income, books of 6 I.T.A. No.2328 M 15 account, in fact, we have no second opinion about method adopted by Assessing Officer when department has detected third account maintained by assessee and not disclosed in return filed by assessee. However, we do not find anything about reply submissions of assessee made before authorities below at time of assessment proceedings as well as appellate proceedings. Moreover, at time of hearing, ld. Counsel for assessee has pleaded that one more opportunity may be granted to assessee for filing complete details before Assessing Officer. In view of above and to meet ends of justice, we remit matter back to Assessing Officer to verify details as may be filed by assessee and decide issue afresh in accordance with law after allowing opportunity of hearing to assessee. In case, if assessee fails to furnish suitable explanation, complete income and expenditure incurred during financial year 2010-11, addition made by Assessing Officer and confirmed by ld. CIT(A) stands sustained. 7. In result, appeal filed by assessee is allowed for statistical purposes. Order pronounced on 07th October, 2016 at Chennai. Sd - Sd - (A. MOHAN ALANKAMONY) (DUVVURU RL REDDY) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, 07.10.2016 Vm - 7 I.T.A. No.2328 M 15 Copy to: 1. Appellant, 2. Respondent, 3. ( ) CIT(A), 4. CIT, 5. DR & 6. GF. C. Shankar v. Income-tax Officer, Business Range XV(3), Chennai