2019 (11) TMI 1187 - AT - Income Tax

Addition u/s 68 being share application money received by the assessee - HELD THAT:- Assessee was not provided with any adverse material which has been used by the Assessing Officer while framing the assessment a statement made by the ld. counsel for the assessee and not controverted by the ld. DR. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore this issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate with evidence to his satisfaction regarding the identity and credit worthiness of the share applicants and the genuineness of the transactions. The Assessing Officer, if feels necessary, may summon the directors of the investor companies or ask the assessee to produce the directors of the investor companies.

Addition to be interest income for this year - HELD THAT:- CIT(A) upheld the action of the Assessing Officer on the ground that the assessee could not substantiate by producing necessary evidence that the balance interest has been offered to tax in the subsequent year after the same was credited in the bank account of the assessee. It is the submission of assessee that the interest income has been shown on receipt basis and since the assessee has offered the same to tax in the subsequent year, no addition is called for during this year. We find some force in the argument of the ld. counsel that an income cannot be taxed twice. However, it is a mater of record that the assessee has not substantiated by producing necessary evidence either before the AO or before the CIT(A) that the balance interest has been offered to tax in the subsequent year.

Penalty levied u/s 271(1)(c) - HELD THAT:- We find the quantum appeal has been restored to the file of the Assessing Officer for fresh adjudication. Therefore, the penalty so levied by the Assessing Officer and upheld by the CIT(A) has no legs to stand - Penalty levied by the AO and sustained by the CIT(A) is cancelled. However, the Assessing Officer is at liberty to initiate fresh penalty proceedings and levy penalty u/s 271(1)(c) if so required, after completion of the assessment. The grounds raised by the assessee are accordingly allowed.