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2021 (5) TMI 173 - AT - Income TaxAddition on account of interest u/s 40(a)(ia) - payment of interest expenses under the head ‘profit & gains of business or profession’ to VP & Sons HUF - while making this payment assessee has not deducted tax at source u/s 40(a)(ia) - interest received has been shown by the assessee in the column “interest income” along with professional income in part in profit & loss account in ITR-4 form but has not been shown in the Schedule of Other Sources of ITR - HELD THAT:- Had these investments belong to HUF it would have certainly been reflected in the return of income of HUF itself. Moreover, the assessee has made a false claim which is neither paid nor shown by the assessee as payable in the return of income which is not permissible in the cash system and mercantile system of accounting. This fact goes to prove that income as shown in the return of income by the assessee just to preempt and explain the information which is available to the Department in the form of 26AS to evade the tax. From the facts of this case, when it is proved on record that the assessee has received an amount as interest income out of which he has failed to prove that the amount as been paid to the HUF, the entire amount is to be treated as “income from other sources” because it is not business income of the assessee being a chartered accountant. In these circumstances, ld. CIT (A) has rightly observed that the amount is not to be made addition to the income of the assessee by invoking the provisions contained u/s 40(a)(ia) of the Act rather it is to be treated as income of the assessee from other sources So, we are of the considered view that ld. CIT (A) has rightly arrived at the decision that entire transaction of the assessee having been reflected in the return of income who being a chartered accountant was supposed to come up with clean hands, is a colourable device to evade the tax and the entire interest income has been rightly taxed under the head “income from other sources” in the hands of the assessee. Decided against the assessee. Addition on the basis of information received u/s 133(6) - different companies qua confirmation of interest payment to the assessee and there was a difference in the interest received and the interest declared by the assessee - HELD THAT:- As assessee contended that this addition is not sustainable as there is some reconciliation issue but we are of the considered view that when the assessee has brought before the AO all the facts regarding difference of interest received from Mahindra & Mahindra which was accepted by the AO, there was no other reconciliation issue left to be addressed by the AO. Assessee has failed to bring on record any facts before the first appellate authority or before the Tribunal as to how the difference is not addressed during reconciliation. So, we are of the considered view that ld. CIT (A) has rightly confirmed the addition hence ground is determined against the assessee. Undisclosed interest income - HELD THAT:- CIT (A) has rightly directed the AO to tax the entire amount as “income from other sources” and not under the head “business income”. The present appeal has been filed by the assessee without bringing on record reasons to dislodge the findings returned by ld. CIT (A) which fact is evident from the grounds of appeal raised by the assessee which have largely challenged the order passed by the Assessing Officer but has never challenged the findings returned by ld. CIT (A). So, the assessee has failed to bring on record any perversity or illegality in the impugned order passed by the ld. CIT(A) which are findings on the facts based upon material evidence discussed in detail.
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