2016 (5) TMI 233 - AT - Income Tax

Additions of undisclosed FD - Held that - AO has made various additions of undisclosed FD in the hand of the assessee by framing the assessment under section 144 of the Act. The AO got the information of undisclosed FD/investment as a result of search of CBI at the premises of the assessee. All the addition were confirmed by the ld. CIT(A). However before us the ld. AR has submitted all the necessary supporting documents justifying the source of the investment/ FD that they were carried forward from the earlier years. In view of above we are inclined to reverse the order of the lower authorities and assessee s ground is allowed. - Decided in favour of assessee. Addition on on substantive basis of Income declared by the daughters - Held that - Income declared by the daughters of the assessee in their respective hand were taxed in the hands of the assessee on substantive basis. Now from the submission of the assessee, we observe that the same has been taxed in their individual names on substantive basis. The ld. DR has not brought anything on record contrary to the argument of ld. AR. and simply relied on the orders of authorities below. In view of above, we are inclined to reverse the order of the lower authorities and assessee s ground is allowed.- Decided in favour of assessee. Addition of interest income being 10% of investment in the hands of his wife i.e. Amita Puri - Held that - Out of the total amount of ₹ 26,84,104/- the investments are only to the extent of ₹ 6,09,171/- the rest are being receipts, expenditure and interest received. Tax has already been paid on the interest income received on the matured investments and this was offered to tax in the year such income was received, the details of which are given under the Chart for A/.Y. 2002-03 titled TABULAR EXPLANATION OF INTEREST REFCEIVDED AND OFFERED TO TAX which may be seen for AY 2002-03. In view of this, there is no question of payment of interest of ₹ 1,61,638//-. It is urged that this addition of interest may kindly be deleted. From the above we find that the wife i.e. Amita Puri of assessee has declared the income in her hand. The necessary details have also been furnished in the form of paper which is placed on record. In view of above we are inclined to reverse the order of the lower authorities and ground of assessee is allowed.- Decided in favour of assessee. Enhancing of interest income though the same has already been taxed in the hands of Amita Puri wife of the assessee - Held that - This interest income was not disputed by the AO at the time of assessment. However the ld. AR of the assessee submitted before us that the interest income for ₹ 5,00,600/- is actually the income of the wife (Smt. Amita Puri) of the assessee which is the part of the income declared by her for the AY 2002-03 for an amount of ₹ 16,01,520.00. Our attention drew to the page no. 50-52 of the paper book where the copy of the assessment order was placed. The ld. DR at the time of hearing did not bring anything on record contrary to the submission of the assessee. We find that the addition of the interest income in the hands of the assessee will amount to double tax. - Decided in favour of assessee.

Issues Involved:
1. Validity of proceedings under Section 147 read with Section 148 of the Income Tax Act.
2. Addition of Rs. 49,50,127/- as undisclosed investments/deposits.
3. Repeated and multiple additions of investments.
4. Addition based on non-existent investments and investments listed twice.
5. Addition of income declared by assessee's daughters.
6. Addition of amounts already taxed in the hands of major daughters.
7. Addition of interest income in the hands of the assessee's wife.
8. Enhancement of assessment by adding further interest incomes.
9. Admissibility of additional evidence.

Detailed Analysis:

1. Validity of Proceedings Under Section 147/148:
The assessee contended that the initiation of proceedings under Section 147 read with Section 148 was vague, arbitrary, and beyond the provision of law. However, no specific arguments or detailed analysis on this issue were provided in the judgment summary.

2. Addition of Rs. 49,50,127/- as Undisclosed Investments/Deposits:
The AO found discrepancies between the income declared by the assessee and the investments found during the CBI search. The assessee failed to provide supporting evidence for the investments, leading the AO to add Rs. 49,50,127/- as unexplained income. The CIT(A) upheld this addition, citing the lack of evidence to substantiate the source of funds and the dubious nature of the alleged sale of gold and silver.

3. Repeated and Multiple Additions of Investments:
The assessee argued that the CIT(A) did not consider the repeated additions of investments, both in the year of purchase and the year of maturity. The Tribunal found merit in the assessee's argument, noting that the investments were carried forward from earlier years and that the necessary supporting documents were provided. Consequently, the Tribunal reversed the lower authorities' orders and allowed the assessee's ground.

4. Addition Based on Non-Existent Investments and Investments Listed Twice:
The assessee contended that the CIT(A) confirmed additions based on non-existent investments and investments listed twice. The Tribunal found that the AO had made various additions without proper verification and that the assessee had provided necessary supporting documents. The Tribunal reversed the lower authorities' orders and allowed the assessee's ground.

5. Addition of Income Declared by Assessee's Daughters:
The AO added the income declared by the assessee's daughters, Divya Puri and Neha Puri, on a substantive basis in the hands of the assessee. The CIT(A) upheld this addition. However, the Tribunal found that the income had already been taxed in the daughters' hands on a substantive basis, and there was no contrary evidence provided by the DR. The Tribunal reversed the lower authorities' orders and allowed the assessee's ground.

6. Addition of Amounts Already Taxed in the Hands of Major Daughters:
The AO added amounts of Rs. 4,82,953/- and Rs. 1,12,000/- in the hands of the assessee, despite these amounts being taxed in the hands of the major daughters. The Tribunal found that these amounts had already been assessed in the daughters' hands on a substantive basis and reversed the lower authorities' orders, allowing the assessee's ground.

7. Addition of Interest Income in the Hands of the Assessee's Wife:
The AO added interest income of Rs. 1,61,638/- in the hands of the assessee, presuming an interest rate of 10% on investments found in the name of the assessee's wife. The CIT(A) upheld this addition. However, the Tribunal found that the interest income had already been declared and taxed in the hands of Amita Puri. The Tribunal reversed the lower authorities' orders and allowed the assessee's ground.

8. Enhancement of Assessment by Adding Further Interest Incomes:
The CIT(A) enhanced the assessment by adding further interest incomes of Rs. 4,36,048/- and Rs. 64,552/-. The Tribunal found that these amounts had already been taxed in the hands of Amita Puri and that adding them again in the hands of the assessee would result in double taxation. The Tribunal reversed the CIT(A)'s orders and allowed the assessee's ground.

9. Admissibility of Additional Evidence:
The CIT(A) observed that additional evidence was not admissible despite the paper books containing various documentary evidence referred to the AO for examination. The Tribunal found that the necessary supporting documents were provided and that the lower authorities' orders were not justified. The Tribunal allowed the assessee's ground.

Conclusion:
The Tribunal allowed the assessee's appeals, reversing the orders of the lower authorities on all contested grounds. The Tribunal found that the necessary supporting documents were provided, and the additions made by the AO and confirmed by the CIT(A) were not justified.

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