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2015 (12) TMI 986 - AT - Income TaxAddition as income from other sources as against agricultural income declared by the assessee - Held that - There is no dispute that there was earlier a search and seizure operation conducted in the case of the assessee in the year 2008, in pursuance of which an assessment was made under S.143(3), wherein the Assessing Officer had accepted the agricultural income declared by the assessee in the original return of income. It is also relevant to note that in the assessment order, the Assessing Officer has not referred to any incriminating material found, while disbelieving a part of the agricultural income and treating it as income from other sources. Consequently, it is well settled that if a particular income is subject matter of assessment in an earlier assessment proceedings and stands concluded, it cannot be reopened unless there are incriminating material found as a result of search to show undisclosed income. In this context, we refer to the decision of the Special Bench of the Tribunal in the case of All Cargo Global Logistics Ltd. V/s. DCIT (2012 (7) TMI 222 - ITAT MUMBAI(SB)). Admittedly, in the present case, as far as agricultural income is concerned, it has been considered in the original assessment proceedings. Therefore, in the absence of any incriminating material found during the second search and seizure operation conducted on 8.12.2011, to show that agricultural income was inflated, the Assessing Officer cannot consider this issue again in the impugned re-assessment proceedings. Accordingly, we delete the addition made by the Assessing Officer treating part of the agricultural income declared as income from other sources. - Decided in favour of assessee Unexplained investment under S.69B - Held that - As the statement of Srhi T.Ranga Rao, the entire charge sheet(s) filed by CBI and information gathered by the department through enquiry have not been brought on record before us either by assessee or department, we are unable to examine the extent of assessee s involvement, if at all, in the irregularities alleged by CBI or whether the assessee has also been implicated by the investigation agency or any other person. Therefore, in our view, issue relating to payment of on-money requires to be examined afresh by Assessing Officer after confronting evidence/material sought to be relied upon to the assessee and seeking his response on them. The Assessing Officer must also disclose to the assessee the material/information on the basis of which he has quantified the on-money payment of ₹ 1,99,20,000. If the Assessing Officer is able to establish on the basis of evidence gathered that the assessee has paid onmoney to the extent quantified by him, then he can make the addition under S.69B. On the flip side, if there is no evidence available on record to directly link the assessee towards payment of on-money, then merely on the basis of the fact that some other buyers have accepted payment of on-money, no addition can be made. With the aforesaid observations, we remit the issue to the file of the Assessing Officer with a direction to re-decide the same afresh in accordance with law - Decided in favour of assessee for statistical purposes. Disallowance of assessee s claim for depreciation - as submitted by the assessee that Plasma TV and Home Theatre System were used by the assessee for his business purposes, because the assessee, being a film artist, these electronic items are required to view films, sequences and for finalisation of locations - Held that - by looking at the nature of the assets and the fact that they are used in assessee s home, we are unable to accept the assessee s claim for depreciation. Further, assessee has not substantiated with any evidence that the TV or the Home Theatre System were used for business purposes. We accordingly confirm the disallowance made by the Assessing Officer, rejecting this ground of the assessee. Disallowance of 20% out of personal expenses - Held that - We are of the view that the nature of expenditure claimed demonstrate that there would be some amount of personal element in the same, and hence, certain disallowance is warranted. We find that the disallowance worked out at 20% made by the Assessing Officer is reasonable, and the CIT(A) was therefore, justified in sustaining the same - Decided against assessee. Addition as undisclosed income - Held that - On careful examination of the seized document, it is seen, against the name of every person to whom payment is supposed to have been made, a date is mentioned. Interestingly, against assessee s payment no date is mentioned. Further, the payment dates are in sequence. It is to be noted, as per the seized document, the payment immediately after assessee is ₹ 10 lakhs to Puri Jagannadh in February, 2011. Since, all subsequent payments are in chronological order, assessee s contention that payment made to him, if at all, is prior to February, 2011 is acceptable. Keeping these facts in view when the Bench made a specific query to Learned Departmental Representative to explain how Assessing Officer has correlated the payment to the impugned assessment year, he has no valid answer for the same. Therefore, even accepting for argument s sake that contents of seized document are correct, but certainly, it cannot be linked to the impugned assessment year. Thus, looked at from any angle, the addition cannot be sustained. Accordingly, allowing assessee s ground, we delete the addition of ₹ 2 crores. - Decided in favour of assessee Allowance of TDS credit of ₹ 5 lakhs - Held that - Assessing Officer does not dispute the fact that the assessee actually received ₹ 45 lakhs by way of cheque and balance ₹ 5 lakhs by way of TDS. It is also not disputed that the assessee returned the entire amount of ₹ 50 lakhs received as Advance from Madras Talkies. Under these circumstances, the assessee in our view was entitled for getting credit of ₹ 5 lakhs deducted by way of TDS and remitted to the Government account, as it is in the name of the assessee. The apprehension of the Department that the deductor will take credit for the same, in our view is totally misplaced. Therefore, we do not find any infirmity in the order of the learned CIT(A) in directing the Assessing Officer to give credit to the TDS of ₹ 5 lakhs.- Decided in favour of assessee
Issues Involved:
1. Addition of agricultural income as income from other sources. 2. Validity of assessment under Section 153A. 3. Addition of unexplained investment under Section 69B. 4. Disallowance of depreciation on personal assets. 5. Disallowance of personal expenses. 6. Addition of undisclosed income. 7. Levy of interest under Sections 234A and 234B. 8. Allowance of TDS credit. Issue-wise Analysis: 1. Addition of Agricultural Income as Income from Other Sources: - Assessment Year 2006-07: The assessee's appeal against the addition of Rs. 76,545 as income from other sources was allowed. The Tribunal held that the agricultural income was already accepted in an earlier assessment under Section 143(3) and no incriminating material was found in the subsequent search to warrant reopening the assessment. - Assessment Year 2007-08: The issue was deemed academic as the CIT(A) had already deleted the addition of Rs. 2,600 made by the Assessing Officer, and the Revenue did not challenge this deletion. - Assessment Year 2009-10: The Tribunal deleted the disallowance of Rs. 1,44,360, noting that the income declared from agricultural activities by the assessee was reasonable given the extent of land held. - Assessment Years 2010-11 to 2012-13: Similar additions were deleted for these years, following the reasoning applied for the assessment year 2009-10. 2. Validity of Assessment under Section 153A: - Assessment Year 2007-08: This issue was deemed academic and not adjudicated upon as the addition made by the Assessing Officer was deleted by the CIT(A). 3. Addition of Unexplained Investment under Section 69B: - Assessment Year 2009-10: The addition of Rs. 1,99,20,000 as unexplained investment was remitted back to the Assessing Officer. The Tribunal noted the violation of natural justice principles as the assessee was not allowed to cross-examine the witness whose statement was relied upon. The Assessing Officer was directed to re-examine the issue after providing the assessee an opportunity to rebut the evidence. 4. Disallowance of Depreciation on Personal Assets: - Assessment Year 2009-10: The Tribunal upheld the disallowance of Rs. 94,727 claimed as depreciation on LG Plasma Television and Home Theatre, noting that the assessee failed to substantiate their use for business purposes. - Assessment Years 2010-11 to 2012-13: Similar disallowances were upheld for these years, following the reasoning applied for the assessment year 2009-10. 5. Disallowance of Personal Expenses: - Assessment Year 2009-10: The Tribunal upheld the disallowance of 20% of personal expenses, amounting to Rs. 16,30,130, noting the personal element in the claimed expenses. - Assessment Years 2010-11 to 2012-13: Similar disallowances were upheld for these years, following the reasoning applied for the assessment year 2009-10. 6. Addition of Undisclosed Income: - Assessment Year 2012-13: The addition of Rs. 2 crores as undisclosed income was deleted. The Tribunal held that the loose sheet seized from a third party had no evidentiary value without corroborative evidence, and the addition could not be linked to the impugned assessment year. 7. Levy of Interest under Sections 234A and 234B: - Assessment Years 2009-10 to 2011-12: The Tribunal upheld the CIT(A)'s decision on the levy of interest, finding it in accordance with statutory provisions. - Assessment Year 2012-13: The Tribunal directed the Assessing Officer to recompute the interest under Section 234B, giving consequential relief to the assessee after deleting the addition of Rs. 2 crores. 8. Allowance of TDS Credit: - Assessment Year 2011-12: The Tribunal upheld the CIT(A)'s direction to the Assessing Officer to give credit for the TDS of Rs. 5 lakhs, noting that the assessee had returned the entire advance received, including the TDS amount. Summary of Outcomes: - Assessee's appeals for the assessment years 2006-07 and 2009-10 to 2012-13 were partly allowed. - Assessee's appeal for the assessment year 2007-08 was dismissed. - Revenue's appeals for the assessment years 2009-10 to 2011-12 were dismissed. - Revenue's appeal for the assessment year 2012-13 was partly allowed. - Assessee's cross objections were dismissed as infructuous.
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