2015 (9) TMI 712 - AT - Income Tax

Addition under Section 68 - reopening of assessment under Section 147 - Held that - The assessee in fact received the gold bullion on payment of ₹ 9,97,00,000/-. In the sale deed in which the payment was received, was shown as if the Babu and Associates is Confirming Party . The fact remains that the assessee is not the owner of the land and he has nothing to do with the land which was subject matter of transfer by the sale deed dated 27.02.2007. Therefore, it is for the assessee to explain why an amount of ₹ 10 Crores should not be treated as his income. The explanation of the assessee that he was accommodating on the request of Shri Elangovan for a commission ₹ 3 lakhs is not substantiated. The material available on record suggests that the assessee has received the gold bullion to the extent of ₹ 9,97,00,000/-. Therefore, this Tribunal do not find any infirmity in the order of the lower authority treating the entire amount of ₹ 10 Crores as income of the assessee The assessee filed a return of income on 13.11.2007 declaring a total income of ₹ 16,27,456/-. Initially, the return was processed under Section 143(1) of the Act. Consequent to a survey under Section 133A of the Act, the assessment was reopened by issuing a notice on 12.02.2010 and the same was completed on 31.12.2010. Consequently, the case was again reopened by issuing a notice under Section 148 of the Act on 22.07.2011. Since the Assessing Officer has not considered the credit of ₹ 10 Crores in the bank account and it is also not the case of the assessee that there was change of opinion, this Tribunal is of the considered opinion that the Assessing Officer has rightly reopened the assessment. We do not find any reason to interfere with the order of the lower authority and accordingly, the same is confirmed. - Decided against assessee.

Summary

Issues:
1. Addition of Rs. 10 Crores under Section 68 of the Income-tax Act, 1961.
2. Reopening of assessment under Section 147 of the Act.

Analysis:

Issue 1: Addition of Rs. 10 Crores under Section 68 of the Income-tax Act, 1961:
The appellant, engaged in civil contract business, received Rs. 10 Crores in their bank account on 09.02.2007. The appellant claimed it was a transaction facilitated by an acquaintance for a commission. However, investigations revealed discrepancies regarding the source and purpose of the funds. The appellant transferred a significant portion of the amount to a jeweler for gold bullion, which raised suspicions. Despite the appellant's explanations, the authorities found inconsistencies in the transaction details and ownership claims. The Tribunal upheld the lower authorities' decision, concluding that the entire amount of Rs. 10 Crores should be treated as the appellant's income due to insufficient substantiation of the commission claim and the actual utilization of the funds for purchasing gold bullion.

Issue 2: Reopening of assessment under Section 147 of the Act:
The appellant's assessment was reopened twice, first after a survey and then under Section 148. The Tribunal determined that the Assessing Officer rightly reopened the assessment as the substantial credit of Rs. 10 Crores was not initially considered. Since there was no evidence of a change in opinion and the reopening was justified, the Tribunal confirmed the lower authority's decision to dismiss the appeal.

In conclusion, the Tribunal upheld the addition of Rs. 10 Crores to the appellant's income under Section 68 and confirmed the reopening of the assessment under Section 147, ultimately dismissing the appeal.

This detailed analysis encapsulates the key aspects of the legal judgment, highlighting the issues involved and the Tribunal's decision regarding each issue.