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2012 (8) TMI 592 - AT - Income TaxAssessment framed u/s 153A - search or requisition - addition u/s 68 of long term capital gain on sale of shares on ground of them being sham transactions - Held that - After perusing the orders of Lucknow bench in the cases of Members of Arora group, we have held that order of the FAA in deleting the addition made u/s. 68 needs no interference. Since orders passed by the AO and FAA for the AYs under consideration are same as in the case of Smt. Pooja Arora and Sh. Praveen Kumar (Individual). Therefore, following the said orders we uphold the order of the FAA. Same is held in respect of addition made on ground of low withdrawals for house-hold expenses and gift received by Assessee HUF since additions made on aforesaid ground has been restricted or deleted by Lucknow bench while assessment of group - Decided against Revenue
Issues Involved:
1. Addition under Section 68 of the Income-tax Act, 1961 (Act) regarding unexplained cash credits. 2. Low household withdrawals. 3. Addition on account of gift received by the assessee HUF. Detailed Analysis: 1. Addition under Section 68 of the Income-tax Act, 1961: The main issue revolves around the addition made by the Assessing Officer (AO) under Section 68 of the Act concerning the income generated through the sale of shares. The AO treated the entire sale proceeds of shares as unexplained cash credits, alleging the transactions were sham and fictitious. The First Appellate Authority (FAA) decided in favor of the assessee, following the orders of the CIT(A)-I, Kanpur, and ITAT Lucknow, which had upheld similar transactions as genuine in related cases. The Tribunal upheld the FAA's decision, finding no reason to interfere with the deletion of the addition made under Section 68. 2. Low Household Withdrawals: The AO made additions to the income of the assessee for low household withdrawals, arguing that the withdrawals shown were incredibly low given the lavish lifestyle of the assessee. The FAA partially upheld the AO's additions but found the overall withdrawals to be reasonable. The Tribunal agreed with the FAA's findings, noting that the FAA had taken a reasonable stand and upheld part/full additions for certain years. The Tribunal dismissed the grounds of appeal related to low withdrawals for the assessment years in question. 3. Addition on Account of Gift Received: The AO added Rs. 75 lakhs received as a gift from Mrs. Noreen Jayantilal Manek to the assessee's income, questioning the creditworthiness of the donor and the genuineness of the transaction. The FAA, however, found the gift to be genuine, supported by documentary evidence, including the donor's bank account details and the sale proceeds of an apartment. The FAA noted that similar gifts to other family members had been accepted by the department. The Tribunal upheld the FAA's decision, referencing the ITAT Lucknow's orders, which had accepted similar gifts as genuine transactions. The Tribunal found no infirmity in the FAA's order and dismissed the grounds of appeal related to the gift. Conclusion: The Tribunal dismissed the appeals filed by the AO for all the assessment years, upholding the FAA's decisions on all issues. The Tribunal found that the FAA had reasonably assessed the issues of unexplained cash credits, low household withdrawals, and the genuineness of the gift received, and thus, no interference was warranted. Order: The appeals filed by the AO for the assessment years 2000-01, 2002-03, 2004-05, and 2006-07 were dismissed. The order was pronounced in the open court on 27th June 2012.
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