2012 (7) TMI 179 - AT - Income Tax

Non-disclosure of assets - Assessing Officer in the order of assessment holds that since as per the depreciation statement of the assessee, the addition of the fixed asset is not reflected, the value of the new car is added to the assessee s income as undisclosed asset - Depreciation chart does not reflect the gift transaction properly and in the absence of specific mention of the newly purchased car in the addition column of the depreciation chart, the addition is justified Held that - No detailed examination by the learned CIT(A) of the claim of the assessee that he has purchased a new car or that his old car is not reflected in his asset statement as it has been gifted to his wife and is reflected in her assessment records which are with the very same A.O. as that of the assessee in the instant case - assessee s claims are just brushed aside and no cross verification has been carried out - There appears to be no clarity either in the submissions made by the assessee or in the findings of the authorities below and therefore in the interest of justice we remit this issue back to the file of the Assessing Officer Interest u/s.234B of the Act - charging of interest is consequential and mandatory - Assessing Officer is however directed to recompute the interest chargeable - assessee s appeal is partly allowed for statistical purposes.

Summary

Issues:
1. Condonation of delay in filing appeal for Assessment Year 2006-07.
2. Disallowances made by the Assessing Officer for A.Y. 2006-07.
3. Addition of undisclosed assets in the form of a new car.
4. Charging of interest under section 234B of IT Act, 1961.

Condonation of Delay:
The appellant filed Form No.36 one day late for the appeal against the order of CIT(A) for Assessment Year 2006-07. The delay was sought to be condoned by the appellant through a petition and affidavit. The ITAT, Bangalore, after considering the reasons cited, decided to condone the delay of one day in the interest of equity and justice, admitting the appeal for hearing and disposal.

Disallowances Made by the Assessing Officer:
The Assessing Officer disallowed various amounts in the assessment for A.Y. 2006-07, including interest on housing loan, deduction under section 80C, non-existent liability, and undisclosed asset. The appellant appealed against these disallowances, arguing that the lower authorities did not appreciate the facts and circumstances properly. During the hearing, the appellant withdrew the appeal regarding the inflated liability but contested the addition of Rs. 4,77,120 as an undisclosed asset. The ITAT examined the submissions and remitted the issue back to the Assessing Officer for a fresh examination and detailed verification.

Addition of Undisclosed Assets:
The addition of Rs. 4,77,120 as an undisclosed asset was based on the purchase of a new car and the alleged gifting of the old car to the appellant's wife. The Assessing Officer and CIT(A) had differing views on the ownership and disclosure of the cars in the appellant's books. The ITAT found discrepancies in the presentation of the depreciation statement and lack of thorough examination by the authorities. Consequently, the ITAT remitted the issue back to the Assessing Officer for a detailed re-evaluation and directed the appellant to cooperate in providing necessary details.

Charging of Interest under Section 234B:
The appellant challenged the charging of interest under section 234B of the IT Act for the relevant period. The ITAT held that the charging of interest was mandatory, and the Assessing Officer's action was deemed to be in order. However, the Assessing Officer was directed to recompute the interest chargeable while giving effect to the ITAT's order.

In conclusion, the ITAT partially allowed the appellant's appeal for statistical purposes, remitting certain issues back to the Assessing Officer for re-examination and directing cooperation from the appellant in providing necessary details.