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2015 (11) TMI 403 - AT - Income TaxUnexplained credit u/s.68 - Out of 6000 persons only 14 of them have given confirmation saying that they have given deposit - Assessing Officer considered 15% deposit as genuine and the balance he considered as unexplained income - Held that:- In the present case, the Assessing Officer had given ample of opportunity at various level to prove the genuineness of the deposits. Inspite of this, the assessee failed to prove the genuineness of the deposits. In our opinion, no useful purpose will be served by remitting the issue back to the file of the Assessing Officer for fresh consideration. Hence, the order of the Assessing Officer is confirmed. This ground of the appeal of the assessee is rejected. Disallowance treating purchase of newsprint from capital market as undisclosed income of the assessee - Held that:- Since the stock appeared to have been used by the assessee himself or it was lying in stock with him, the assessee derived benefit from this business. Such benefit needs to be made eligible to tax within the meaning of section 28(i). Alternatively, it was proposed that the assessee can be assessed under section 41(1) of the Act for the cessation of liability. The assessee did not respond to the proposal. As such, the Assessing Officer included the sum as the undisclosed income of the assessee for the assessment year 1996-97 in the light of the definition of undisclosed income contained in section 158B(b) of the Act. No particular argument was advanced in his regard at the time of hearing. Order was contested on the ground of opportunity. Having heard both the parties and after perusing the records, we uphold the order of the Assessing Officer on this count. - Decided against assessee. Advance paid to Mr. Vivek treated as undisclosed income - Held that:- We find there is no entry with regard to advance to Mr. Vivek in the cash flow statement. Being so, we consider this amount as undisclosed income of the assessee. Accordingly, this ground of the appeal of the assessee is rejected.- Decided against assessee Fixed deposits in Canara bank treated as undisclosed income - Held that:- There are entries for E65,000/- for the assessment year 1987-88 and E1,00,000/-for the assessment year 1992-93. Being so, we direct the Assessing Officer to give due credit to the tune of E1,65,000/- only. This ground of the appeal of the assessee is partly allowed. Difference in cost of construction which was treated as undisclosed income - Held that:- The addition is made only based on the DVO report and the variation between the amount shown by the assessee for construction and the DVO report which is less than 10.4% and there is no seized material reflecting this addition. Being so, we are inclined to delete the addition. This ground of the appeal of the assessee is allowed.- Decided against revenue E1,94,000/-being the personal expenses which was treated as undisclosed income - Held that:- The addition is only based on estimation and there is no seized material available on record to suggest the personal expenses. Being so, we delete the addition made by the Assessing Officer on this count.- Decided against revenue Purchase of E2,15,000/- as household articles which was treated as undisclosed income - Held that:- There is no seized material found during the course of search suggesting this addition. The addition is made only on estimation basis hoping that they were purchased during the course of block period. The assessee is being a senior person having means to purchase these articles from known sources as there is no evidence to suggest that it has acquired from unaccounted income of the assessee. Accordingly, this addition is deleted. This ground of the appeal of the assessee is allowed.- Decided against revenue Deposits in Canara bank - Held that:- In the cash flow statement these deposits was not reflected in the respective assessments years. Being so, it is treated as undisclosed income of the assessee. This ground of the appeal of the assessee is dismissed. - Decided against assessee Unaccounted investment of E1,00,000/- for the assessment year 1991-92 - Held that:- This amount of E1,00,000/- was reflected in the cash flow statement for the year ending 31.03.1991. Accordingly, this ground of the appeal of the assessee is allowed. - Decided against revenue Unexplained Gift payment - Held that:- These gifts are reflected in the cash flow statement for the financial year ending 31.03.1992 for E20,000/-, 31.03.1993 for E20,000/-. 31.3.1994 for E25,000/-, 31.03.1995 for E25,000/- and 31.03.1996 for E30,000/-, totaling to E1,20,000/-. Being so, we find that the assessee has explained this expenditure and accordingly, this addition is deleted. This ground of the appeal of the assessee is allowed.- Decided against revenue Investment in Tamilarasi which was treated as undisclosed income - Held that:- This amount of E52,500/- was reflected in the cash flow statement for the year ended 31.03.1992. Being so, the addition cannot be made. Hence, we delete the addition made by the Assessing Officer. Accordingly, this ground of the appeal of the assessee is allowed. - Decided against revenue Purchase of land at Thanjavur treated as undisclosed income - Held that:- These amounts reflected in the cash flow statement at E1,24,000/-as on 31.3.1992 and E89,000/- as on 31.03.1993. Being so, the additions are deleted as the assessee has explained the investments. This ground of the appeal of the assessee are allowed.- Decided against revenue Interest suspense account - Held that:- The assessee has not furnished the details of these expenditure. In our opinion, whenever assessee claimed an expenditure it should be incurred wholly and exclusively for the purpose of business. In the absence of any evidence to substantiate this expenditure, we decline to appreciate the argument of the assessee counsel. This ground of the appeal of the assessee is rejected.- Decided against assessee Unexplained credits which was treated as undisclosed income - Held that:- The Assessing Officer has given ample of opportunities to prove the identity, genuineness and creditworthiness of the transactions. Whenever any amount found credited in the books of account of the assessee in the previous year relevant to the assessment year, it is the duty of the assessee to prove the above ingredient of the transaction. Since the assessee was not able to produce necessary evidence to prove the transaction with the supporting evidence, we are inclined to confirm the addition in respect of these substantive credits. Hence, this ground of the appeal of the assessee is dismissed.- Decided against assessee Credit card payments which was treated as undisclosed income - Held that:- These credit card payments are not reflected in the cash flow statement. In our opinion, the credit card payments cannot be considered as explained. Being so, this addition is sustained. This ground of the appeal of the assessee is rejected.- Decided against assessee Undisclosed investment in jewellery - Held that:- In the cash flow statement for the year ending 31.03.1996, this amount of E2,00,000/- was not reflected in the cash flow statement filed before us. Being so, the addition of E2,00,000/- is sustained. This ground of the appeal of the assessee is dismissed.- Decided against assessee Undisclosed foreign travel expenses - Held that:- The contention of the ld. Authorised Representative for assessee is that addition is made only on estimation basis in the block assessment. One cannot estimate the expenditure in block assessment without any seized material suggesting the expenditure. Being so, we are remitting this issue back to the file of the Assessing Officer to verify the nexus between the seized material and the expenditure incurred and decide the issue afresh and if there is no seized material in respect of this addition, the Assessing Officer cannot make addition on this count. This issue is remitted back to the Assessing Officer for fresh consideration. This ground of the appeal of the assessee is partly allowed for statistical purposes.
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