2016 (3) TMI 91 - AT - Income Tax

Addition on account of unaccounted cash receipts - Held that - Undisputedly the impugned addition is made only on the basis of loose paper which shows that certain payments were made for acquiring the share in the partnership firm. Assuming yet not accepting that the said payment was actually made but then it was made for acquiring the share in the partnership firm. This by its very nature is a capital receipt in the hands of the Assessee. Therefore assuming yet not accepting that even this transaction has taken place it is a capital receipt which cannot justify the impugned additions. We accordingly set aside the findings of ld. CIT(A) and direct the A.O to delete the impugned addition of ₹ 5 lacs made on account of unaccounted cash receipts. - Decided in favour of assessee Addition u/s. 68 - Held that - The counsel for the assessee reiterated what has been stated before the lower authorities. The D.R. supported the finding of Revenue authorities. We have given a thoughtful consideration to the order of the authorities below. We have also gone through the affidavit filed before the ld. CIT(A). In our considered opinion the ld. CIT(A) should not have rubbished the affidavit without going into the merits. Therefore in the interest of justice and fair play, we restore this issue to the files of the A.O. The A.O is directed to decide the issue afresh in the light of the contents of the affidavits. Keeping in mind, the ratio laid down by the Hon ble Supreme Court in the case of Mehta Parekh & Company 1956 (5) TMI 4 - SUPREME Court . - Decided in favour of assessee for statistical purposes. Penalty u/s 271(1)(c) - disallowance of depreciation - Held that - Undisputedly the assessee claimed depreciation which was not permissible during the period in which the delivery vans were purchased. However, in our considered opinion a mere making of a claim which is not sustainable in law will not amount to furnishing inaccurate particulars. We draw support from the decision of Hon ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. 2010 (3) TMI 80 - SUPREME COURT . - Decided in favour of assessee

Summary

Issues:
1. Applicability of Section 44AF of the Act
2. Addition on account of low withdrawal for household expenses and unexplained investments
3. Legality of additions made under Section 153A without incriminating material
4. Addition of &8377; 5 lacs as business income
5. Addition of &8377; 18,000 under Section 68 of the Act
6. Addition of &8377; 5 lacs as unaccounted cash receipt
7. Addition of &8377; 4,59,000
8. Addition of &8377; 10 lacs as unexplained expenditure
9. Penalty levied under Section 271(1)(c) of the Act

Analysis:

1. The appeals involved common issues related to the applicability of Section 44AF, low withdrawal for household expenses, and unexplained investments. The Tribunal noted that no incriminating material was found during the search, emphasizing that additions under Section 153A require such material. Citing relevant case law, the Tribunal held that without incriminating evidence, additions cannot be justified. Consequently, the Tribunal directed the Assessing Officer (A.O) to delete the impugned additions related to household expenses and unexplained investments.

2. The Tribunal addressed the addition of &8377; 5 lacs as business income, which was based on a hand-written agreement found during search proceedings. The Tribunal observed that even if the transaction had occurred, it would constitute a capital receipt, not business income. Therefore, the Tribunal set aside the CIT(A)'s findings and directed the A.O to delete the addition of &8377; 5 lacs.

3. Regarding the addition of &8377; 18,000 under Section 68 of the Act, the Tribunal found that the CIT(A) had dismissed additional evidence in the form of an affidavit without proper consideration. In the interest of justice, the Tribunal remanded the issue to the A.O for fresh consideration based on the contents of the affidavits and legal precedent.

4. The Tribunal also addressed various other additions and appeals related to unaccounted cash receipts, unexplained expenditures, and penalties under Section 271(1)(c) of the Act. In each case, the Tribunal carefully analyzed the facts, legal arguments, and relevant precedents. Ultimately, the Tribunal directed the A.O to delete the impugned additions and penalties based on the legal principles and evidence presented.

5. The Tribunal's comprehensive analysis and adherence to legal principles resulted in a mixed outcome where some appeals were allowed, and some additions were directed to be deleted. The Tribunal's detailed reasoning and reliance on legal precedents ensured a fair and just resolution of the issues raised in the appeals.