Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (5) TMI AT This

  • Login
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2017 (5) TMI 11 - AT - Income Tax


Issues Involved:
1. Disallowance of peak credit.
2. Disallowance of undisclosed investment in land.
3. Legality of proceedings initiated and completed under section 153A/143(3) of the Income Tax Act.
4. Appeals by Revenue dismissed due to low tax effect.
5. Cross Objections filed by the assessee.

Detailed Analysis:

1. Disallowance of Peak Credit:
The assessee contested the disallowance of ?11,16,323/- on account of peak credit, arguing it resulted in double addition since the profit on undisclosed sales had already been assessed. The CIT(A) confirmed the AO’s addition, reasoning that there must be some investment in the unaccounted business. However, CIT(A) allowed a set-off for the peak credit in subsequent years. The Tribunal upheld the CIT(A)'s decision, noting no peak credit addition was made in earlier years (AYs 2004-05 to 2006-07), thus no set-off was warranted.

2. Disallowance of Undisclosed Investment in Land:
The AO added ?27,55,198/- as undisclosed investment in land based on seized documents. The CIT(A) provided partial relief, reducing the addition to ?6,57,328/-, acknowledging that part of the investment was explained by receipts already considered by the AO. The Tribunal upheld the CIT(A)'s decision, agreeing that the remaining amount did not arise from the impounded documents and thus was correctly added as undisclosed investment.

3. Legality of Proceedings Under Section 153A/143(3):
The assessee challenged the legality of the proceedings under section 153A/143(3), arguing no valid search warrant existed against them and the documents were impounded from a third party. Despite initial arguments, the assessee conceded to the CIT(A)'s order during the hearing. The Tribunal dismissed the appeal, finding no merit in the arguments against the legality of the proceedings.

4. Appeals by Revenue Dismissed Due to Low Tax Effect:
The Revenue's appeals for AYs 2007-08 and 2008-09 were dismissed in limine due to the tax effect being below ?10 lakh, as per CBDT Circular No. 21 of 2015. The Tribunal noted no exceptions to this circular applied to the cases at hand.

5. Cross Objections Filed by the Assessee:
The assessee's cross objections mirrored the issues in their appeals. The Tribunal, having already addressed these issues in the main appeals, dismissed the cross objections accordingly. Additionally, one cross objection was dismissed as not pressed by the assessee during the hearing.

Conclusion:
The Tribunal dismissed all appeals and cross objections filed by the assessee, upholding the CIT(A)'s decisions on disallowance of peak credit and undisclosed investment in land, and confirming the legality of the proceedings under section 153A/143(3). The Revenue's appeals were dismissed due to low tax effect.

 

 

 

 

Quick Updates:Latest Updates