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2013 (11) TMI 368 - AT - Income TaxAddition made in the income of assessee u/s 68/69 of the Income tax Act – Search u/s 132 was conducted and Hundies/Promissory Notes were seized from the residence of Shri Jayant Vithaldas - Substantive addition on the aggregate sum of the hundies was made on Mr. Jayant Vithaldas, as these were found from his premises and possession. However, the protective addition was made on the assessee – Held that:- None of the hundies found from the premises and possession of the Mr. Jayant Vithaldas bears the name of the assessee. The revenue authorities have simply proceeded on the presumption that the lender name could be inscribed at any time and that since Mr. Jayant Vithaldas was closely connected to the directors of the assessee, eventually concluded that it is the assessee, who is the lender. This conclusion is merely based on conjecture - The close relation of Mr. Jayant Vithaldas with the assessee company, on which the entire edifice has been built does not bear any foundation. The revenue authorities have failed to establish the connection of the assessee and Mr. Jayant Vithaldas or even Mr. Dilip Sardesai. Ld. CIT(A) erred in confirming the addition made by the AO to the income of the Appellant on account of unaccounted hundies /bills of exchange on protective basis on the basis of certain materials seized from the residence of Shri Jayant Vithaldas, Pune, who was an ex-executive of the Appellant company and he further grossly erred in changing the protective addition into substantive addition without allowing any opportunity of hearing to the Appellant before increasing the tax liability by changing the protective addition into substantive addition – Decided in favor of Assessee.
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