2015 (10) TMI 580 - AT - Income Tax

Unexplained investment in Innova Car - CIT(A) deleted the addition - Held that - Since inception the assessee s stand was that the investment in the car was duly disclosed as per the books of account and nothing pertained to the year under consideration. The books of account and the information in respect of repayment was very much part of the assessment record, has vehemently argued before us. We, therefore, approve the factual finding of learned CIT(A) and find no force in the argument of learned DR. - Decided against revenue. Unexplained cash credits (deposit received) - CIT(A) deleted the addition - Held that - No infirmity in the verdict of learned CIT(A). The assessee has disclosed not only the names of the tenants who have made the deposits but also their PAN information; therefore, it was not fair on the part of the AO to hold that the amount in question was not proved in terms of Section 68 of IT Act. Resultantly, we hereby confirm the findings of learned CIT(A) and dismiss this ground of the Revenue. - Decided against revenue.

Summary

Issues involved:
1. Addition of unexplained investment in a car.
2. Addition of unexplained cash credits received.

Issue 1: Addition of unexplained investment in a car:
The Appeal involved a dispute over the addition of Rs. 9,50,000 on account of unexplained investment in a car. The assessee contended that the investment was for a Santro car financed by a loan from ICICI Bank, not an Innova car as mentioned in the ledger account due to a typing error. The CIT(A) found in favor of the assessee, noting that the purchase bill and EMI statement for the Santro car were produced, and the accountant had mistakenly recorded it as an Innova car. The CIT(A) directed the AO to delete the addition, ruling that the EMI payments were made, and the investment was duly disclosed in the audited accounts. The Tribunal upheld the CIT(A)'s decision, stating that the investment was disclosed as per the books of account and pertained to a different assessment year, dismissing the Revenue's argument to restore the matter for further investigation.

Issue 2: Addition of unexplained cash credits received:
The second issue revolved around the addition of Rs. 5,80,000 as unexplained cash credits received. The AO had treated these deposits as unexplained cash credits under section 68 of the IT Act. The assessee explained that the deposits were from tenants for rented property, mainly transporters who rented office space. The CIT(A) accepted the explanation, noting that the deposits were advances received in earlier years towards renting the premises, which were declared as House Property Income. The CIT(A) directed the AO to delete the addition, citing legal precedents and the submission of tenant details and PAN information. The Tribunal upheld the CIT(A)'s decision, finding no fault in the disclosure of tenant details and rental income, dismissing the Revenue's argument that the matter should be reconsidered due to alleged lack of evidence before the AO.

In conclusion, the Tribunal dismissed the Revenue's Appeal and the Assessee's Cross Objection, upholding the CIT(A)'s decisions on both issues regarding the unexplained investment in a car and the unexplained cash credits received. The Tribunal found in favor of the assessee, emphasizing the disclosure of relevant information and the lack of legal grounds to sustain the additions made by the AO.