Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 60 - AT - Income TaxAddition in respect of undisclosed interest income on estimate basis - reassessment proceedings U/s 153A - Held that:- When the Assessing Officer as well as the CIT(A) has accepted the fact that the assessee was suffering from the ailment and was undergoing the treatment of Tuberculosis during the period under consideration then the estimation made by the Assessing Officer as well as the confirmed by the ld. CIT(A) without any proper and reasonable basis and particularly in the reassessment proceedings U/s 153A is not permitted. Even the Assessing Officer has not worked out the income on basis of the funds available with the assessee and employed in the business activity by considering the corresponding application of income which was found during the course of search and seizure action as well as recorded in the books of account of the assessee. When the Assessing Officer has not found any significant discrepancy in the income offered by the assessee and corresponding application of income then there is no reason for not accepting the income offered by the assessee. Accordingly, in facts and circumstances of the case when the addition was made by the AO purely on ad hoc estimation and without any tangible material, the same is not sustainable and consequently is liable to be deleted. Hence we delete the addition made by the Assessing Officer and sustained by the ld. CIT(A) on this account. Accordingly, ground No. 1 of the assessee’s appeal is allowed and ground No. 1 of the revenue’s appeal is dismissed. Interest chargeable U/s 234B after giving the credit of the amount in the PD account - cash seized during the search and seizure action is available for adjustment against the advance tax liability and consequently chargeability of interest U/s 234B - Held that:- Accordingly in view of the binding precedents as well as the CBDT circular, we do not find any error or illegality in the impugned order qua this issue. Hence, this ground of revenue’s appeal is dismissed. Addition made by the Assessing Officer on account of cash deposits in the bank account of employees of the assessee - Held that:- in absence of any documentary evidence of operating of the bank accounts by the assessee, the mere availability of cheque books with the assessee cannot be an evidence for making addition of the cash deposits in the accounts of these persons specifically when all these persons are regularly assessed to income tax. The assessee filed the return of income in support of explanation. Further the statement of one of these persons namely Shri Mahaveer Prasad Sharma was recorded by the search party U/s 132(4) and no such question was asked from the said person regarding the deposits in the bank account. Therefore, when the assessee has discharged its onus by producing the return of income of these persons wherein the declared income was sufficient to cover the deposits made in the bank accounts, then in the absence of any direct evidence or tangible material to disclose the fact that the cash deposit in the bank accounts of these persons belongs to the assessee, the addition made by A.O. is not sustainable. The said deposit is subject matter of assessment in the hands of these persons, accordingly, in the facts and circumstances of the case, we delete the addition made by the Assessing Officer on this account. Addition made on account of sale of jewellery by mother-in-law of the assessee treating the same as undisclosed income - Held that:- once the amount was found duly credited in the bank account of Smt. Saraswati Devi Sharma and subsequently it was transferred in the account of the assessee then the transaction cannot be doubted. Even the source of credit in the account of mother in law is found during the search and seizure action. The assessee explained that during the last days of her life, she was residing with the assessee and her daughter Smt. Kalawati Sharma, wife of assessee and thus it is natural that all her belongings and valuables would be at the place of assessee. Accordingly, in view of the above facts and circumstances of the case, we are of the considered opinion that when the seized material itself shows the source of amount deposited in the bank account of Smt. Saraswati Devi Sharma by cheque and subsequent transfer from her account to the account of assessee, the same cannot be treated as undisclosed income of the assessee. Accordingly, we delete the addition made by the Assessing Officer on this account. Disallowance on account of short fall of fund and making excess investment - Held that:- CIT(A) has recasted cash flow statement and found that there is no short fall of fund as per the revised fund flow statement. Moreover when we have already decided the issue of jewellery in favour of the assessee, then the question of disallowance on account of short fall of fund and making excess investment does not arise. Accordingly, in view of the facts and circumstances of the case, we do not find any error or illegality in the impugned order of the CIT(A). Hence, the grounds No. 1 and 2 raised in the revenue’s appeal is dismissed.
|