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2021 (10) TMI 858 - AT - Income TaxAddition as income from inflation of expenses - assessee’s group cases who had preferred application before the Hon’ble Income Tax Settlement Commission - Asst Year 2012-13 - HELD THAT:- There is no dispute on this aspect. It is not in dispute that assessee had resorted to inflation of expenses by making certain cheque payments and receiving back cash in return. It is not in dispute that the said cash had already also been utilised for the purpose of meeting business related expenses by the assessee. What is to be taxed is only the left over portion of the cash remaining with the assessee on this subject mentioned transaction, being the profit element, which has been already accepted by the Income Tax Settlement Commission at 12% vide its order dated 28/06/2018 in assessee’s group company cases. We hold that the lower authorities ought to have followed the same in view of identical facts in the assessee herein also. Accordingly, we direct the ld AO to make an addition @ 12% of inflation of expenses of ₹ 28,76,106/- for the relevant Asst Year in line with the direction of the Income Tax Settlement Commission in assessee’s group company cases. See M/S. BHALCHANDRA TRADING P. LTD. VERSUS DY. CIT, CENTRAL CIRCLE-6 (2) MUMBAI [2021 (2) TMI 1095 - ITAT MUMBAI] - Grounds raised by the assessee are partly allowed. Unexplained cash u/s 69 - as reflected in the seized material that cheque was received back in lieu of which cash was paid by the assessee company - Asst Year 2014-15 -HELD THAT:- As version of the assessee deserves to be believed that it had not received any sum of ₹ 7,84,932/- by cheque. In any case, the case of the revenue is only that the assessee had received cheque for ₹ 7,84,932/- and for which the assessee had in turn paid cash from its unexplained sources. It is not in dispute that there is abundance of cash balance in the assessee group reflected in the parallel books of accounts which were subject matter of seizure in the course of search and huge addition on peak credit basis of ₹ 26 crores was indeed offered by the group. Hence in any case, the meagre alleged cash payment of ₹ 7,84,932/- stands explained by the said income itself. Hence there is no need to make any addition on account of unexplained cash u/s 69 of the Act in the instant case. Accordingly, the grounds raised by the assessee are allowed.
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