2013 (2) TMI 765 - AT - Income Tax

Summary

Issues involved: Challenge to order of ld.CIT(A)-XXI, Ahmedabad dated 04/02/2010 by Revenue and cross-objection filed by respondent-assessee.

Issue 1: Restriction of addition made on account of income from undisclosed source.
- Revenue challenged restriction of addition from Rs. 35,33,414 to Rs. 1,80,000.
- CIT(A) restricted addition based on analysis of bank transactions and lack of evidence.
- CIT(A) accepted transactions as related to retail trade but estimated income at Rs. 1.80 lacs u/s.44AF.
- Tribunal upheld CIT(A)'s decision, emphasizing the need for rational estimation in absence of evidence.

Issue 2: Treatment of cash deposits in bank account related to HUF or individual.
- AO noted cash deposits in bank account of Rs. 22,49,410 by individual.
- Assessee claimed account belonged to HUF, but AO was unconvinced due to lack of evidence.
- CIT(A) dismissed claim of business belonging to HUF, restricted addition to Rs. 1.80 lacs.
- Tribunal affirmed CIT(A)'s decision, rejecting Revenue's grounds and cross-objection of assessee.

Issue 3: Interpretation of bank transactions and determination of taxable income.
- AO taxed entire cash amount in hands of individual due to lack of evidence.
- CIT(A) analyzed bank transactions, accepted transactions as related to retail trade, estimated income at Rs. 1.80 lacs.
- Tribunal upheld CIT(A)'s decision, emphasizing rational estimation of taxable profit in absence of evidence.

Conclusion: Revenue's appeal and cross-objection of Assessee both dismissed by Tribunal, affirming CIT(A)'s decision to restrict addition and assess income in individual capacity.