Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (5) TMI 420 - ITAT VISAKHAPATNAMValidity of assessment u/s 153A - time limit for issue of notice u/s 143(2) expired - additions made towards disallowance of interest and deemed dividend u/s 2(22)(e) - Held that:- The time limit for issue of notice u/s 143(2) of the Act has been expired. The A.O. has made additions towards disallowance of interest and on account of deemed dividend without any incriminating materials. Therefore, we are of the view that the A.O. has no jurisdiction to make additions for the assessment years 2003-04, 2005-06, 2006-07 & 2008-09, in the absence of any incriminating materials. We further observed that the A.O. has made additions towards disallowance of interest and on account of deemed dividend based on the books of accounts and financial statements, which were already part of regular return filed by the assessee u/s 139(1) of the Act, but not based on any incriminating materials unearthed during the course of search - Decided against revenue Additions towards inflation of expenditure - Held that:- We do not find any merits in the arguments of the assessee, for the reason that the assessee himself had admitted inflation of hostel expenditure mainly with regard to the purchase of vegetables and other provisions. We further observed that the expenditure incurred towards purchase of vegetables and other provisions is supported by self-made vouchers and did not have proper evidence to prove the veracity of the expenditure, therefore, we are of the view that the A.O. was right in disallowing inflation of expenditure. The CIT(A) after considering the relevant explanations of the assessee has rightly upheld additions made by the A.O. We do not find any error in the order of the CIT(A). - Decided against assessee. Additions towards unexplained deposit in the bank account - Held that:- In the absence of any specific finding as to utilization of source available in the form of additional income out of inflation of expenditure, the A.O. ought to have telescoped the sources available towards additions made towards unexplained cash deposits in the bank account in the name of the employees. The CIT(A) without appreciating the facts, simply upheld additions made by the A.O. Therefore, we direct the A.O. to allow the benefit of telescope towards additional income available in the form of inflation of expenditure. In so far as unexplained investment in purchase of site, the assessee himself admitted that the said investment is outside the books of accounts. However, claims that the sources of income available in the form of additional income offered towards inflation of expenditure should be telescoped towards additions made on account of unexplained investment in purchase of site. Therefore, we direct the A.O. to allow benefit of telescoping on additional income offered towards inflation of expenditure to unexplained investment in purchase of site. Additions towards suppression of receipts - Held that:- A.O. has made additions solely on the basis of MIS report sent from branch office to head office which was found and seized during the course of search operations. We further observed that the additions made by the A.O. is not supported by valid evidences, except internal MIS report sent from branch office to head office for their accounting purposes. The assessee, on the other hand, categorically proved that the books of accounts has been prepared based on the actual receipt of fees collections as per which the fees receivable at the end of the financial year is at ₹ 10,62,000/- but not ₹ 15,78,750/-, thus there is no difference in fees collection. The A.O. without appreciating facts, simply made additions towards suppression of receipts. Therefore, we direct the A.O. to delete additions made towards suppression of receipts.- Decided against revenue Additions towards deemed dividend u/s 2(22)(e) - Held that:- the transaction between the assessee and his company is not a gratuitous payment, which falls under the ambit of deemed dividend u/s 2(22)(e) of the Act. Therefore, we direct the A.O. to delete additions made towards deemed dividend. - Decided against revenue
|