2012 (3) TMI 435 - AT - Income Tax

Summary

Issues involved: The appeal concerns the addition of income by the Revenue and the acceptance of the claim by the assessee regarding the disclosure of certain amounts in earlier years.

Issue 1 - Addition of Income by Revenue:
The Revenue contended that the CIT(A) erred in deleting the addition of Rs. 91,84,558/- without verifying if the income from TDS certificates received during the financial year 2007-08 was shown in earlier years. The AO noted credits in the assessee's account from two sources totaling Rs. 1,55,84,558/- during the financial year 2007-08. The AO issued a show cause notice to explain the non-declaration of these receipts in the income computation. The assessee responded, stating that the amounts were accounted for in earlier years and provided details supporting this claim. The AO, however, made an addition of Rs. 91,84,558/- as income for the year under consideration based on TDS certificates issued by the Director of Punjab State Lotteries.

Issue 2 - Assessee's Claim and CIT(A)'s Decision:
Before the CIT(A), the assessee explained that the amounts in question were related to schemes operated in earlier years and had been recorded in the financial year 2005-06. The CIT(A) observed that the receipts were connected to Bumper Draws and Monthly Draws from the financial year 2005-06. The CIT(A) directed the assessee to provide evidence supporting the claim of accounting for the income in earlier years. The assessee submitted documents showing the TDS amount of Rs. 1,22,384/- was claimed in the financial year 2005-06. After examining the assessment record for the year 2006-07, the CIT(A) found that the TDS amount had been duly claimed and allowed. Consequently, the CIT(A) concluded that the addition made by the AO was erroneous and directed its deletion.

Conclusion:
The CIT(A) upheld the assessee's claim that the income related to TDS certificates received during the financial year 2007-08 had been accounted for in earlier years. By verifying the assessment records of the assessee for the financial year 2005-06 and 2006-07, the CIT(A) found that the income had been declared and assessed previously. Therefore, the appeal of the Revenue was dismissed, and the addition of Rs. 91,84,558/- was deleted.