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2017 (5) TMI 76 - ITAT AHMEDABAD

2017 (5) TMI 76 - ITAT AHMEDABAD - TMI - Reopening of assessment - penalty u/s 271(1)(c) of the Income Tax Act, 1961 - unexplained investment in mutual funds and unexplained investment in purchase of office space - the stand of the assessee was that no material exhibiting escapement of income in the hands of the assessee was obtained by the AO to form a belief that income has escaped assessment in her hand - Held that: - The asset was in the name of the assessee. Had the case of the assessee’s h .....

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e given a credit of her past savings. Considering these aspects, we are of the view that at the most a sum of ₹ 1,47,391/- could be treated as unexplained opening capital balance and a benefit of ₹ 2,00,000/- representing small savings in the past out of non-taxable income could be estimated. The ground raised by the assessee is partly allowed. - Penalty on alleged concealed income of ₹ 3,47,391/- Held that: - According to the assessee she was not having income exhibiting t .....

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husudan, Sr.DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Present two appeals are directed at the instance of the assessee against orders of the ld.CIT(A), Valsad dated 30.9.2013 and 1.10.2014 passed for the Asstt.Year 2005-06. 2. ITA No.2706/Ahd/2014 emerges out from the proceedings initiated under section 143(3) r.w.s 147 whereas ITA No.3444/Ahd/2014 emerges out from the penalty proceedings initiated against the assessee under section 271(1)(c) of the Income Tax Act, 1961. 3. First we take up qu .....

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8377; 2 lakhs in mutual fund in F.Y.2004-05 in the name of Smt.Kashmira G. Desai. Similarly, he disclosed an investment of ₹ 1 lakhs against purchase of office space at 401, Amar Chambers, Valsad. Armed with this information, the AO had issued notice under section 148 of the Income Tax Act on 20.3.2012. The AO has reopened the assessment, and after hearing the assessee passed an assessment order on 11.2.2013. Before the ld.CIT(A) the assessee did not challenge reopening of the assessment. .....

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8377; 2 lac in mutual fund in F.Y. 2004-05 in the name of his wife Smt. Kashmira G. Desai. Further, Shri Gautam R. Desai has admitted in his statement that Smt. Kashmira G. Desai has invested ₹ 1 lac in purchasing office at 401, Amar Chambers Valsad on 29.10.2004. Smt. Kashmira G. Desai has not filed return of income for A.Y. 2005-06. Since the assessee has not filed return of income for A.Y. 2005-06, the investments made in mutual fund and in immovable property remain unexplained. Hence, .....

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and not the assessee. In other words, the stand of the assessee was that no material exhibiting escapement of income in the hands of the assessee was obtained by the AO to form a belief that income has escaped assessment in her hand. In his second fold of submissions, he contended that in the assessment order, the AO has not made addition on account of investment in mutual fund as well as investment in purchases of office space. The AO has made addition of unexplained opening capital balance. A .....

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ng the assessment proceedings. For buttressing his contention, he relied upon the judgment of the Hon ble Bombay High Court in the case of CIT Vs. Jet Airways (I) Ltd., 331 ITR 236. He also relied upon the judgment of Hon ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. v. CIT, 336 ITR 136. He also put reliance upon the judgment of the Hon ble Gujarat High Court reported in 353 ITR 172. On the other hand, the ld.DR relied upon the order of the AO. 7. We have duly considered rival co .....

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04-05. The AO will not be in a position to reopen that assessment. Closing balance shown in the earlier year would be opening balance in this year and this opening balance will explain the investment in the assets. The AO confronted the assessee to prove source of capital balance available to her in the opening account. She failed to give explanation and due to this reason, he made addition of unexplained opening balance. This unexplained opening balance can easily take care of the investment ma .....

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he assessee. The asset was in the name of the assessee. Had the case of the assessee s husband been reopened, he could have an explanation that asset does not stand in his name and his wife has source of such investment. Therefore, it was necessary for the AO to verify the details of the assessee. In view of the above situation, neither of the judgment of the Hon ble Bombay High Court, Delhi High Court nor Gujarat High Court relied upon by the assessee are applicable on the give facts. There is .....

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students to whom she gave tuition. She has not received a single payment from students through account payee cheque. The activity in itself is doubtful. However, there may be some saving in the hands of the assessee, because being a woman, she might have received gifts on different occasions, either from her parents or from her in-laws. Therefore, the AO ought to have not doubted total capital balance. He should have given a credit of her past savings. Considering these aspects, we are of the vi .....

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