2012 (7) TMI 239 - AT - Income Tax

Additions on account of undisclosed income - Held that - Since income of assessee was below taxable limit, therefore, no return was filed, thus in view of the decision of in the case of SURENDRA KUMAR LAHOTI Versus ACIT 2006 (4) TMI 68 (HC) the income below taxable limit may not be treated as undisclosed income On account of difference in value of car and undisclosed interest the assessee could not explain the source of deposit, thus the addition made by AO is confirmed for the assessment year 1988-89, whereas in view of the income assessed in assessment year 1988-89 till 1993-94, the assessee was having sufficient cash for deposit in the Bank account. Accordingly, the addition made by the Assessing Officer is not sustainable. As for unexplained investment in gold ornaments and unaccounted rental income the assessee could not explain the source of acquisition of gold ornaments, the AO has correctly made addition. Addition in respect of purchase of tanker - Held that - As the AO has not properly evaluated the documents filed to explain the source of investment in tanker, restore this ground back to the file of the Assessing Officer for deciding afresh

Summary

Issues:
- Appeals against separate orders of CIT(A)-2(1), Bhopal for the Block Period 1.4.1985 to 28.02.1996.
- Assessment order contrary to material on records and provisions of the Act.
- Directions by the Hon'ble Income Tax Appellate Tribunal not followed.
- Making additions of undisclosed income without proper assessment.
- Initiating penalty u/s 158BFA(2) of the Act.

Analysis:

I.T.(SS).A.Nos. 24/Ind/2012:
- The ACIT passed a block assessment order determining undisclosed income. The ITAT set aside the order directing a fresh assessment. The assessee's income from tailoring was rejected for lack of proof. The High Court decision on income below taxable limit was cited to exclude such income. Additions were made for deposits and interest without explanations, upheld by the ITAT.
- In various assessment years, additions were made for bank deposits. The ITAT upheld some additions where explanations were lacking and directed exclusions based on assessed income being below taxable limit in certain years. Unexplained investments and rental income were also added, supported by the ITAT's decision.

I.T(SS).A.No. 25/Ind/2012:
- The ACIT's assessment order was set aside for reassessment. The ITAT directed the exclusion of income below taxable limit based on High Court precedent. Additions for purchases and loans were made without proper evaluation, leading to directions for reassessment.
- The ITAT directed reassessment for various years where additions were made without proper verification of sources. Loans and gifts were disputed, and the ITAT ordered a fresh assessment considering the evidence presented. Unexplained bank deposits were also subject to reassessment based on relevant evidence.

In conclusion, the ITAT allowed the appeals in part, directing reassessment for various additions and exclusions based on the High Court's decisions and proper evaluation of evidence. The orders were pronounced on 30th May 2012.