2016 (1) TMI 1093 - AT - Income Tax

Assessment u/s 153A - Addition on account of low house hold withdrawals - Held that - As order passed u/s. 153A r.w.s. 143(3) were not made, based on any incriminating material found or seized during the course of search of thereafter. The additions are purely based on the material already available on record. Hence, all the additions in both the cases are deleted and the ground raised by the assessee in both the appeals are allowed - Decided in favour of assessee

Summary

Issues:
Appeal against CIT(A)'s order sustaining addition on account of house hold withdrawals u/s 69C of Income Tax Act, 1961.

Analysis:
The appeal was filed against the CIT(A)'s order dated 16.07.2014, where the only grievance of the assessee related to the sustenance of an addition of Rs. 2,10,000 made by the AO on account of low house hold withdrawals. The search and seizure operation under section 132 of the Income Tax Act, 1961 was conducted at the assessee's premises, leading to the issuance of a notice u/s 153A. The assessee declared an income of Rs. 4,02,687, but the AO assessed it at Rs. 6,97,690. The CIT(A) partially allowed relief but sustained the addition of Rs. 2,10,000, prompting the appeal.

During the hearing, the assessee's counsel referred to a previous order in the assessee's own case for the assessment years 2008-09 & 2009-10, where the addition was deleted. The Revenue argued that the addition was justified due to the lack of withdrawals for house hold expenses as per bank statements found during the search. The assessee contended that withdrawals by family members were sufficient for household needs, and no incriminating material was found during the search.

The Tribunal noted that a similar issue was already decided in favor of the assessee in the previous order for the assessment years 2008-09 & 2009-10. Following the precedent set by the jurisdictional High Court, the Tribunal allowed the appeal, stating that the assessments were not based on any incriminating material found during the search. Therefore, the impugned addition was deleted based on the identical facts of the case.

In conclusion, the Tribunal allowed the appeal of the assessee, deleting the addition of Rs. 2,10,000 made by the AO. The decision was based on the absence of incriminating material and the precedent set in the assessee's own case for previous assessment years.

(Order Pronounced in the Court on 18/01/2016)