Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (4) TMI 676 - AT - Income TaxAddition u/s 69 on account of business income from M/s Ashu Marketing proprietorship concern engaged in the business of trading of clothes - AO made an addition on account of income estimated by applying net profit @ 8% on gross sales - assessee has explained the reasons for not disclosing this income as there was a loss in the said business activity and hence it was not claimed by the assessee in the return of income due to smallness of the amount - HELD THAT:- AO has not disputed the transactions as recorded in the bank account of the assessee with HDFC Bank in the name of proprietorship concern as well as the gross sales shown by the assessee in the profit and loss account produced before the AO - AO has rejected the said computation of the loss as per the profit and loss account and estimated the income of the assessee in respect of retail business of cloth. Once the retail business of purchase and sale of cloth is accepted by the Assessing Officer and gross sales as shown by the assessee is not in dispute then the loss not reflected in the return of income would not lead to the re-classification of the income. Since the assessee has not declared this business income/loss in the return of income therefore, the Assessing Officer has rightly invoked the provisions of section 44AF and estimated the income of the assessee - However, the re-classification of the income by applying the provisions of section 69 of the Act is contrary to the facts as well as law and action of the Assessing Officer is highly unjustified and unreasonable. Accordingly, the said addition is directed to be treated as business income of the assessee. This ground of the assessee is partly allowed. Unexplained investment in the immovable property - immovable property which was purchased by the assessee vide sale deed dated 27.04.2012 - The assessee has explained the source as cash withdrawal of ₹ 6,00,000/- from the Axis Bank account of the assessee on 23.04.2012 and availability of fund in the bank account is also explained by the assessee as withdrawal from the partnership firm M/s Soft Solutions of ₹ 9,00,000/- which is also reflected in the Axis Bank account of the assessee - HELD THAT:- As the entries in the bank account of the assesse are not in dispute and therefore when the withdrawal from the bank account of ₹ 6,00,000/- and payment of purchase consideration of ₹ 5,30,120/- are contemporaneous transactions then the assessee has explained the source. It is not the case of the Revenue that the said amount of ₹ 6,00,000/- withdrawn by the assessee on 23.04.2012 was utilized for some other purpose then the purchase of property on 27.04.2012. The withdrawal of the cash from the bank account and payment of consideration are matching transactions without any delay or time gap. Hence, in view of the facts as evident from the record and particularly from the bank account of the assessee. The assessee has discharged its onus of explaining source of investment. Accordingly, the addition made by the Assessing Officer is deleted. Unexplained deposits in the saving bank account of the assessee and his daughter with HDFC Bank and Axis Bank u/s 68 - HELD THAT:- The assessee has now explained the source of these deposits as transfer the fund from other bank account of the assessee as well as the opening balance available with the assessee as per the cash flow statement. It is pertinent to note that all these explanations and details as well as evidences were not produce before the Assessing Officer. Therefore, the cash flow statement relied upon by the assessee as well as the explanation that the deposits in the bank account of the assessee are from other banks are to be verified. Hence, in the facts and circumstance of the case and interest of justice this issue is set aside to the record of the Assessing Officer for proper verification and examination of all the relevant facts as well as the evidence relied upon by the assessee in the shape of the transfer from the other bank accounts and availability of opening cash balance as per the cash flow statement. Needless to say the assessee be given an opportunity before passing the fresh order. Disallowance of deduction u/s 80TTA - AO made an addition on account of interest income under the head ‘income from other sources’ - HELD THAT:- Before the CIT(A) the assessee has claimed the deduction u/s 80TTA as the interest income was in respect of saving bank account is less than the threshold limit. The CIT(A) has directed the Assessing Officer to allow the necessary deduction as per law from income of ₹ 3,097/- being in the income from other sources. Once the CIT(A) has directed the Assessing Officer to allow the deduction as per law no grievance is left against the impugned order of the CIT(A). Accordingly, the Assessing Officer is directed to consider the claim of deduction u/s 80TTA and allow the same if the assessee satisfy the requirements of eligibility of deduction. Appeal of the assessee is partly allowed.
|