2014 (5) TMI 396 - AT - Income Tax

Addition made u/s 69 of the Act Jurisdiction of the AO - Re-opening of assessment u/s 143(3) r.w.s. 147 of the Act Insufficient evidences - Held that - Revenue could not bring any cogent material evidence on record to show what happened in the case of other named persons - the presumption u/s 132(4A) is in respect of person in whose possession the books of accounts and other documents etc. are found - diaries were found during the course of search in the case of Dr. D.Y.Patil Group premises presumption may be valid against that group but cannot be stretched to the assessee - The provisions of section 69C of the Act clearly show that it was for the revenue to first establish that the assessee has incurred certain expenditure and then the assessee does not offer any explanation about the source of such expenditure - the assessee has paid Rs.1,60,000/- to M/s Ramarao Adik Education Society - revenue has grossly failed to demonstrate that the assessee has paid donation /capitation fees for the admission of her son to Dr.D Y Patila Medical College - the additions cannot be sustained on the strength of insufficient evidence - The finding of the CIT(A) is reversed Decided in favour of Assessee.

Summary

Issues involved:
1. Addition of Rs.3,90,000 under section 69 of the Income Tax Act, 1961
2. Jurisdiction of the Assessing Officer in reopening the assessment and passing reassessment order

Analysis:
1. Addition of Rs.3,90,000 under section 69 of the Income Tax Act, 1961:
The appeal challenged the addition of Rs.3,90,000 made by the Assessing Officer (AO) and confirmed by the ld. CIT(A) under section 69 of the Income Tax Act. The case involved the assessee paying donation/capitation fees for her son's admission to a medical college. The AO relied on a statement from an account clerk confirming the payment, but the assessee disputed the claim. The Tribunal noted that the revenue failed to provide sufficient evidence to prove the payment by the assessee. The Tribunal found that the AO's reliance on insufficient evidence was unjustified and directed the deletion of the Rs.3,90,000 addition.

2. Jurisdiction of the Assessing Officer in reopening the assessment:
The second issue raised was the jurisdiction of the Assessing Officer in reopening the assessment and passing a reassessment order under section 147 of the Act. The assessee contended that the original return filed should be considered as a response to the notice issued for reopening. However, since the Tribunal directed the deletion of the addition on merits, it did not find it necessary to decide on the grievance related to the reopening of the assessment. The appeal of the assessee was allowed, and the addition of Rs.3,90,000 was directed to be deleted.

This judgment highlights the importance of providing substantial evidence to support additions made under the Income Tax Act and emphasizes the burden of proof on the revenue authorities. It also underscores the need for proper jurisdiction and procedural compliance when reopening assessments.