2013 (12) TMI 719 - AT - Income Tax

Addition u/s 68 - Held that - The amounts represented by such FDRs standing in different names in the account books of the Pat Sanstha - The FDRs being question did not belong to the AOP - The amounts treated as unexplained investments of the AOP for assessment years 1999-2000 and 2000-01 have been assessed in the hands of Agresan Sahakari Pat Sanstha Ltd. for the very same assessment years as unexplained cash credits u/s 68 - The impugned additions are unsustainable as it would amount to taxing of the same income twice i.e. in separate hands for the same assessment years - Decided against Revenue.

Summary

Issues involved:
Appeals by Revenue related to assessment years 1999-2000 and 2000-01 for an Association of Persons (AOP) constituted by 19 Directors of a cooperative society. The appeals challenge the addition of fictitious Fixed Deposit Receipts (FDRs) in the hands of the AOP.

Analysis:

Background of the Case:
The appeals pertain to the addition of fictitious FDRs in the hands of the AOP, which were initially found during a survey against a cooperative society. The Assessing Officer treated these amounts as unexplained income under section 68 of the Income Tax Act for the respective assessment years. The CIT(A) allowed relief by invoking section 80P(2) for the cooperative society, which was upheld by the Tribunal in a previous case.

Assessment of Individual Directors:
Subsequently, the individual Directors of the cooperative society faced reassessment where the additions were deleted by the CIT(A) on the grounds of procedural flaws and lack of evidence linking the investments to the Directors. The Tribunal affirmed this decision, emphasizing that the income was already assessed in the hands of the cooperative society.

Assessment of AOP:
The AOP, comprising the Directors, faced assessment under section 69 of the Act for the same FDRs. The Assessing Officer treated the FDRs as unexplained investments of the AOP, resulting in additions to the total income. The CIT(A) initially deleted the additions, but the Tribunal directed a fresh order. In the subsequent order, the CIT(A) held that the AOP was not the beneficiary of the FDRs and deleted the additions for both assessment years.

Revenue's Appeal:
The Revenue contended that the AOP should be held liable for the FDR additions. However, both parties acknowledged that the same income was already assessed in the hands of the cooperative society, leading to double taxation concerns. The Tribunal noted the earlier decision regarding individual Directors and upheld the CIT(A)'s decision to delete the additions in the case of the AOP.

Conclusion:
Based on the double taxation concerns and the previous assessments, the Tribunal upheld the CIT(A)'s decision to delete the additions in the case of the AOP. Consequently, all appeals by the Revenue were dismissed.

This detailed analysis of the judgment highlights the issues, background, assessments, arguments, and the final decision rendered by the Tribunal.