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2022 (11) TMI 365 - AT - Income TaxValidity of reopening of assessment u/s 147 - Eligibility of reasons for reopening - HELD THAT:- Admittedly, in the instant case, the Assessing Officer has not stated or pointed out in the “reasons recorded for reopening” that there was such failure on the part of the assessee. Further, there are two different versions of “reasons for reopening”. Since the AO has reopened the assessment without pointing out that there was failure on the part of the assessee to disclose fully and truly all material facts, we hold that the impugned reopening is bad in law and accordingly quash the orders passed by the tax authorities for A.Y. 2011-12. Validity of assessment u/s 153A - HELD THAT:- In the instant cases, the assessments of AY 2012-13 to 2016-17 were not pending as on the date of search and hence they would fall under the category of “unabated/finalized/completed assessments”. There is also no dispute with regard to the fact that the search officials did not unearth any incriminating material during the course of search warranting interference of the issues already stood concluded in unabated assessments. Hence the decisions rendered by the Hon’ble Jurisdictional Bombay High Court in the case of Continental warehousing Corporation (Nhava Sheva) Ltd [2015 (5) TMI 656 - BOMBAY HIGH COURT] and Gurinder Singh Bawa [2015 (10) TMI 1761 - BOMBAY HIGH COURT] in our view, shall squarely apply to the facts of the present case. Accordingly we hold that the AO, in the absence of any incriminating material found during the course of search relating to the impugned additions, was not justified in assessing them in AY 2012-13 to 2016-17. Bogus LTCG - Addition made u/s 68 in respect of Long term capital gains shown by the assessee - HELD THAT:- We notice that an identical case of allegations that the assessee has availed accommodation entries by way of capital gains in order to convert unaccounted money into accounted one, was examined in the case of Shyam Power [2014 (12) TMI 977 - BOMBAY HIGH COURT] and in the present case as noticed that the AO has simply relied upon the report of the investigation department and held that the long term capital gains declared by the assessee are not genuine. No other material was brought on record by the AO to prove that the assessee has indeed availed only accommodation entries. We noticed that the assessee has furnished all documents relating to purchase and sale of securities. The shares have entered and exited his demat account. The purchase and sale transactions have been routed through the bank accounts of the assessee. All these documentary evidences produced by the assessee have not been disproved. Thus we hold that the tax authorities are not justified in disbelieving the long term capital gains declared by the assessee. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition - Decided in favour of assessee. Addition made on the basis of information found in the application filed before Income tax Settlement Commission - HELD THAT:- We notice that an identical issue has been examined by the co-ordinate bench in the case of A.T Trade Overseas P Ltd [2022 (5) TMI 152 - ITAT MUMBAI] wherein as deleted the additions made by the Assessing Officer by solely relying on the information submitted before ITSC without there being any material in support of proposed addition - thus in the present case we direct the AO to delete this addition. Charging of Education cess - HELD THAT:- As in view of the retrospective amendment brought in by Finance Act, 2022 holding that the education cess is not allowable as deduction, we hold that the claim of the assessee is not tenable. Accordingly, we reject this ground of the assessee. Cash credits in the form of unsecured loans received and also the interest paid on it - HELD THAT:- We notice that the ld CIT(A) has deleted the addition by making due enquiries, which have also been confronted with the AO. We further notice that the AO has examined source of source, i.e., the assessee had received loans from M/s Anjani Towers P Ltd and the AO has proceeded to examine the loans, in turn, received by M/s Anjani Towers P Ltd. In any case, the enquiries made by the Ld CIT(A) has shown that the said loans are genuine. The Ld CIT(A) has also given a finding that the assessee has discharged his initial onus placed upon him u/s 68 of the Act, which could not be disproved by the AO. Accordingly, we are of the view that the decision rendered by Ld CIT(A) on this issue does not call for any interference. Unexplained cash expenditure - HELD THAT:- There is some merit in the submission of Ld A.R that the expenses in cash could have also been incurred in the earlier years. The contention of the assessee was that these expenses have been incurred out of savings available with all the family members, even though the assessee could not substantiate the said claim. Hence, on a conspectus of the matter, we are of the view that it can be presumed that the major expenses would have been incurred in the earlier years and a portion might have been incurred in the year relevant to AY 2018-19. Accordingly, in order to put this issue at rest, we estimate that the assessee would have spent 10% of the cash portion of expenses during the year relevant to AY 2018-19. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to restrict disallowance to 10% of the addition made by the AO. Unexplained expenditure - HELD THAT:- As all these expenses pertained to the period prior to 31.3.2017 and there is no evidence to show that these payments have been made after 1.4.2017. Hence, we are of the view that these addition cannot be made in A.Y. 2018-19. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and direct the Assessing Officer to delete this addition. Addition u/s 68 - unexplained cash credit - basis for making this addition is a “statement sheet” found during the course of search - HELD THAT:- As noticed earlier, the cash transactions found in this impugned statement relate to the financial years 2011-2014. The case of the assessee is that the same represents commission income on the turnover canvassed by him during the financial years 2009-10 to 2012-13. In effect, none of these transactions pertained to 2018-19 and hence the Assessing Officer could not have made this addition in this year. Accordingly we set aside the order passed by the learned CIT(A) on this issue and direct the Assessing Officer to delete the addition. - Decided in favour of assessee.
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