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2016 (7) TMI 311 - AT - Income TaxScope of assessment u/s 158BD - Held that:- Without any contrary evidence or incriminating material, AO had brought to tax the opening balance and some investments which are explained by the assessee in the cash flow statement. As can be seen from the orders, AO disbelieved certain investments without questioning the source of funds. Details of submissions made by the Ld. Counsel extracted in the above do indicate that for every investment made by the assessee there is corresponding source of the amount, so they cannot be considered as unexplained. It is to be noted that AO did not make any enquiry to disprove the source of funds. He has simply disbelieved the assessee’s explanation, which cannot be accepted in the search proceedings, particularly, in the case of assessee where the proceedings are consequential u/s 158BD. The action of the AO in disbelieving the sources can also be evident from the additions made on the so-called investments in the Chit funds. Not only that assessee has explained that he has separate assessment in the status of HUF and some of the investments are made by the HUF, but, without disproving the same AO simply brought to tax all those investments also in the hands of assessee. There is evidence on record that assessee also offered incomes in HUF status, having its own sources of income and those were not disproved. In view of the above, keeping in mind the limited jurisdiction for making assessment u/s 158BD and the fact that assessee could explain various investments in cash flow statement itself which was accepted by the AO in the proceedings, we have no hesitation in allowing grounds taken by the assessee. Since all the investments brought to tax are either explained in the cash flow statement or belonging to third parties which have brought to tax as benami, we direct the AO to delete all of them - Decided in favour of assessee.
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