2012 (1) TMI 293 - AT - Income Tax

Summary

Issues Involved:
1. Unexplained cash credit.
2. Bogus IMD gift.
3. Low family withdrawals.

Summary:

Issue 1: Unexplained Cash Credit
The Revenue challenged the deletion of an addition of Rs. 28,60,000 made by the Assessing Officer (AO) on account of unexplained cash credit. The Commissioner (Appeals) restricted this addition to Rs. 2,92,800. The Tribunal upheld the Commissioner (Appeals)'s findings, noting that the assessee had declared the purchase of shares for Rs. 25,80,200, which was paid by cheques and reflected in the return of income filed prior to the search. The Tribunal concluded that the net amount of Rs. 2,92,800 represented the unaccounted income not offered for taxation by the assessee, thus dismissing the Revenue's ground.

Issue 2: Bogus IMD Gift
The Revenue contested the deletion of an addition of Rs. 5,91,74,176 made by the AO regarding a gift of IMDs, which the AO deemed in-genuine and taxable u/s 68 of the Act. The Tribunal upheld the Commissioner (Appeals)'s decision, which was based on the fact that the assessee provided substantial documentary evidence to establish the genuineness of the gift, including affidavits from the donors and corroborative statements. The Tribunal also noted that the provisions of s. 56(2)(v) of the Act, which apply to sums of money, did not cover gifts in kind such as IMDs. The Tribunal cited previous decisions supporting this interpretation and dismissed the Revenue's grounds.

Issue 3: Low Family Withdrawals
The Revenue objected to the deletion of an addition of Rs. 5,00,000 made on account of low personal withdrawals. The Tribunal referred to its earlier decision in the assessee's own case for the assessment year 2005-06, where it was held that no further addition was warranted. For the current assessment year, the Commissioner (Appeals) found that the total withdrawals of Rs. 9,32,791 were adequate, and the Tribunal upheld this finding, dismissing the Revenue's ground.

Conclusion:
The Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals)'s decisions on all grounds. The order was pronounced in open Court on 31st January 2012.