2012 (1) TMI 195 - AT - Income Tax

Summary

Issues Involved: The judgment involves the deletion of trading addition and short term capital gains addition by the CIT(A) u/s 250(6) of the Income-tax Act, 1961.

Deletion of Trading Addition:
The revenue raised the issue of deletion of trading addition of Rs. 4,99,000 made by the AO after rejecting the books of account u/s 145(2). The CIT(A) held that the provisions of Section 145(3) cannot be applied based on non-maintenance of stock register. The CIT(A) observed that all books of account and vouchers were submitted by the appellant without any discrepancies, leading to the deletion of the addition. The Tribunal referred the issue back to the CIT(A) for fresh adjudication to examine the relevant material and draw proper inferences.

Deletion of Short Term Capital Gains Addition:
The revenue challenged the deletion of the addition of Rs. 3,75,000 on account of short term capital gains by the CIT(A). The AO made the addition as the assessee failed to prove the nature and source of the amount spent on the settlement of a property dispute. The CIT(A) deleted the addition citing lack of dispute regarding the expenditure and unsatisfactory treatment by the AO. The Tribunal found that the assessee failed to provide evidence of incurring the expenditure, leading to the allowance of the revenue's appeal. The Tribunal emphasized the need for corroborative documentary evidence to support the claim of expenditure.

Conclusion:
The Tribunal partly allowed the revenue's appeal concerning the deletion of trading addition and short term capital gains addition. The decision highlighted the importance of providing credible evidence to support claims and the necessity of thorough examination of relevant material in tax assessments.