2013 (6) TMI 881 - AT - Income Tax

Issues Involved:
1. Validity of assessment u/s 153A read with Section 143(3) of the Income-tax Act, 1961.
2. Addition of unexplained cash credits and disallowance of interest.
3. Addition of gifts as income from undisclosed sources.
4. Disallowance of interest on belated remittance of TDS.
5. Addition on closing stock of land.
6. Treatment of agricultural income as income from undisclosed sources.

Summary:

1. Validity of assessment u/s 153A read with Section 143(3) of the Income-tax Act, 1961:
The assessee challenged the validity of the assessment done u/s 153A read with Section 143(3) of the Act, arguing that the additions were based on income already reflected in the original returns and not on any seized material. The Tribunal, referencing the Hon'ble Delhi High Court's decision in CIT v. Anil Kumar Bhatia, held that once a search u/s 132 is conducted, the Assessing Officer has the jurisdiction to issue notice u/s 153A and reassess the total income, including undisclosed income. The Tribunal found that certain books, documents, and cash were seized during the search, triggering Section 153A. Therefore, the assessments were valid.

2. Addition of unexplained cash credits and disallowance of interest:
For the assessment year 2001-02, the assessee failed to provide PAN or addresses of creditors for loans amounting to Rs. 2,30,000/-. The Tribunal upheld the addition of these loans as unexplained cash credits u/s 68 and disallowed the consequential interest claim of Rs. 22,439/-, as the assessee did not furnish necessary evidence to substantiate the loans.

3. Addition of gifts as income from undisclosed sources:
For the assessment years 2002-03 and 2003-04, the assessee claimed gifts of Rs. 1 lakh each from his father. The Tribunal noted that the assessee provided confirmation letters and evidence of his father's agricultural background. Without examining the father, the Assessing Officer disbelieved the gifts. The Tribunal found the assessee's explanation reasonable and deleted the additions.

4. Disallowance of interest on belated remittance of TDS:
For the assessment year 2006-07, the assessee did not press the ground challenging the disallowance of interest of Rs. 5,573/- on belated remittance of TDS. The Tribunal dismissed this ground as not pressed.

5. Addition on closing stock of land:
The Tribunal addressed the assessee's grievance regarding the addition of Rs. 2,52,952/- on closing stock of land for the assessment year 2006-07. The Tribunal directed the Assessing Officer to consider the same value for the opening stock of land in the succeeding year, thus partly allowing the related grounds.

6. Treatment of agricultural income as income from undisclosed sources:
For the assessment years 2006-07 and 2007-08, the assessee claimed substantial agricultural income. The Assessing Officer rejected these claims due to insufficient evidence of receipts and expenditures. The Tribunal noted the assessee's ownership of agricultural land and the filing of an income and expenditure statement. The Tribunal remitted the issue back to the Assessing Officer for fresh consideration, allowing the assessee to produce additional evidence, including adangal extracts.

Conclusion:
The Tribunal dismissed the appeal for the assessment year 2001-02, partly allowed the appeals for the assessment years 2002-03 and 2003-04, and partly allowed the appeals for the assessment years 2006-07 and 2007-08 for statistical purposes.

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