2012 (11) TMI 397 - AT - Income Tax

Sharafi account - difference in account and disclosure made by the assessee during the search - CIT(A) deleted the addition - Held that - No infirmity into the order of the CIT(A) as the relief has been granted on the basis of telescoping the income of A. Y. 1992-93 (on account of the excess of assets over liabilities as on 31-03-1992) confirmed by my predecessor against the income for A. Y. 1993-94 (on account of the excess of assets over liabilities as on 31.03-1993). The disclosure for both the years was made on the basis of balance sheets found during the course of search. There is nothing on record to show that the income disclosed and confirmed by my predecessor for A Y 1992-93 was invested elsewhere or spent by the appellant. In agreement with the observation of the CIT(A) that the same income cannot be taxed year after year. This observation of the CIT(A) is not controvered by the Revenue by placing any other evidence suggesting that the income was not earlier taxed. In this view of the matter, this ground of the Revenue s appeal is dismissed - in favour of assessee.

Summary

Issues:
Deletion of amount from addition made on account of difference in Sharafi account and disclosure during search.

Analysis:

Issue 1: Deletion of amount from addition made on account of difference in Sharafi account and disclosure during search

The Revenue appealed against the deletion of Rs. 13,91,390/- from the addition of Rs. 16,45,308/- in Sharafi account and disclosure made by the assessee during search. The Ld. CIT(A) upheld the deletion based on the principle of telescoping, where the same income cannot be taxed year after year. The appellant argued for set-off of the addition made in the previous assessment year against the current year's addition. The Ld. CIT(A) agreed with this contention and directed the assessing officer to set-off the previous year's addition, resulting in relief for the appellant. The Ld. CIT(A) emphasized that there was no evidence to suggest that the income disclosed and confirmed in the previous year was invested elsewhere or spent by the appellant. The Tribunal found no fault in the Ld. CIT(A)'s order, supporting the principle of not taxing the same income repeatedly. The Revenue failed to provide any evidence to counter this observation. Consequently, the appeal of the Revenue was dismissed.

This judgment highlights the importance of considering previous assessments and avoiding double taxation of the same income. The concept of telescoping was crucial in determining the relief granted to the appellant. The decision emphasizes the need for proper documentation and evidence to support tax assessments and appeals.