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2015 (7) TMI 771 - AT - Income TaxAddition on account of alleged payment of insurance premium - Held that - It is the assertion of the assessee that the concerned truck No. UP 78 B 1033 belonged to Shri Rakesh Kumar Chopra, nephew of the assessee and it is also asserted by the assessee before learned CIT(A) that such a fact had been got clarified by the A.O. through enquiries made from the office of R.T.O. This assertion of the assessee could not be controverted by any of the authorities below or by Learned D.R. of the Revenue. In our considered opinion, when the concerned vehicle is belonging to Shri Rakesh Kumar Chopra, this should be accepted that the payment was made by him only and since Shri Rakesh Kumar Chopra is nephew of the assessee, it is not very unusual to find a receipt of the nephew of the assessee at the place of the assessee and under these facts, we feel that the addition is not justified and the same is deleted. - Decided in favour of assessee. Addition made on account of interest on deposit with M/s Sanjay Textiles, Kanpur - Held that - It is undisputed fact that the amount is standing in the name of Suman Bala Chopra, wife of the assessee, in the books of M/s Sanjay Textiles, Kanpur. The basis of making addition by the Assessing Officer is that Suman Bala Chopra, wife of the assessee, is not assessed to tax and the Assessing Officer has straight away invoked the provisions of section 64 of the Act for making this addition without pin pointing as to which clause of sub section (1) of section 64 is applicable in the present case. As per the copy of ledger account of Suman Bala Chopra with M/s Sanjay Textiles, Kanpur, appearing on page No. 21 of the paper book for the financial year 1996-97, it is seen that the opening balance shown is ₹ 58,764/- and this is admitted by the Assessing Officer in Para 11 that the assessee s wife had made investment of ₹ 58,764/- prior to block period. Once it is accepted by the Assessing Officer that the investment with M/s Sanjay Textiles, Kanpur was made by the assessee s wife in the pre block period then income accruing out of such investment cannot be added in the hands of the present assessee. This is also noted by the Assessing Officer in the same Para of the assessment order that no fresh deposit was made by Suman Bala Chopra during block period. As per the ledger account copy available on pages 21 to 27 also, during this period, the addition is only on account of interest for each year and there is no fresh investment by the wife of the assessee. Considering all these facts, in our considered opinion, the addition is not justified and section 64 is not applicable. Hence, this addition is deleted. - Decided against revenue. Addition for deposit in 2 bank accounts - Held that - We are of the considered opinion that on the basis of suspicion, the addition is not justified. If the assessee was having more trucks and for that reason, the assessee is not covered u/s 44AE of the Act then some evidence should have been brought on record by the Assessing Officer to show that the assessee was having more trucks and therefore, the assessee cannot get the benefit of section 44AE. Even if that is fact that the assessee is not covered u/s 44AE then also it is admitted position that the deposit in the bank accounts is relatable to freight charges and therefore, the total amount cannot be added as income of the assessee because for earning freight charges, expenses are to be incurred and to be allowed and when the assessee itself has shown income in each year on account of operating trucks, which is substantial when compared with these accounts, no further addition is justified because against total deposit of ₹ 3,75,653/- in these bank accounts during financial year 1996-97 to 2002-03, the assessee has shown income from truck plying of ₹ 24,000/- in assessment year 1997-98, ₹ 36,000/- in assessment year 1998-99, ₹ 48,000/- in assessment year 1999-2000, ₹ 48,000/- in assessment year 2000-2001 and ₹ 90,000/- in assessment year 2001-02 totaling to ₹ 2.46 lac in assessment year 1997-98 to assessment year 2001-02. It is also seen that as per the details of deposit in bank account also, as appearing in Para 26 of the assessment order, there was no deposit in bank account after financial year 2000-2001. Hence, in the facts of the present case, the addition is not justified. - Decided in favour of assessee.
Issues Involved:
1. Addition of Rs. 3,107 for payment of insurance premium. 2. Addition of Rs. 74,093 for interest on deposit with M/s. Sanjay Textiles, Kanpur. 3. Addition of Rs. 1,58,810 for deposit in SB A/c. No. 1863 with Allahabad Bank. 4. Addition of Rs. 2,16,843 for deposit in SB A/c. No. 709 with United Mercantile Cooperative Bank Ltd. 5. Definition of "undisclosed income" under Section 158BB of the Income Tax Act. 6. Justification of additions in the block assessment period. Detailed Analysis: 1. Addition of Rs. 3,107 for Payment of Insurance Premium: The assessee contended that the insurance premium payment of Rs. 3,107 was for Truck No. UP78B 1033, which belonged to his nephew, Shri Rakesh Kumar Chopra. The receipt was mistakenly in the assessee's name. This was clarified by the RTO's office. The tribunal accepted this explanation, noting that it is not unusual to find a relative's receipt at the assessee's place. The addition was deleted. 2. Addition of Rs. 74,093 for Interest on Deposit with M/s. Sanjay Textiles, Kanpur: The assessee argued that the deposit belonged to his wife, Suman Bala Chopra, and not to him. The tribunal noted that the Assessing Officer (AO) invoked Section 64 without specifying which clause applied. The tribunal found no evidence that the deposit was transferred by the assessee to his wife without adequate consideration. It was also noted that the interest income was below the taxable limit during the relevant period. The tribunal concluded that Section 64 was not applicable and deleted the addition. 3. Addition of Rs. 1,58,810 for Deposit in SB A/c. No. 1863 with Allahabad Bank: The assessee claimed that the deposits represented receipts from truck plying business, which were regularly withdrawn for expenses. The tribunal examined the original returns and found that the assessee had disclosed income from truck plying under Section 44AE. The AO had added the total deposits without considering the expenses. The tribunal noted that the AO's suspicion of unaccounted money was not supported by evidence. The addition was deleted. 4. Addition of Rs. 2,16,843 for Deposit in SB A/c. No. 709 with United Mercantile Cooperative Bank Ltd: Similar to the previous issue, the assessee argued that these deposits were also from the truck plying business. The tribunal found that the assessee had disclosed substantial income from truck plying in the original returns. The AO had not provided evidence of additional trucks or unaccounted money. The tribunal deleted the addition, noting that the total deposits were already accounted for in the disclosed income. 5. Definition of "Undisclosed Income" under Section 158BB: The assessee argued that none of the additions fell under the definition of "undisclosed income" as per Section 158BB. The tribunal did not need to examine this technical objection in detail, as the additions were found unjustified on merits. 6. Justification of Additions in the Block Assessment Period: The tribunal noted that the AO had not found any adverse material during the search to justify the additions. The disclosed income from the truck plying business was substantial and covered the deposits in question. The tribunal concluded that the additions were not justified and deleted them. Conclusion: The tribunal allowed the appeal of the assessee, deleting all the additions made by the AO. The order was pronounced in the open court.
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