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2020 (8) TMI 152 - AT - Income TaxAddition u/s 68 - claim of receipt by way of loan from the son-in-law - reimbursement of litigation expenses met by his son-in-law - HELD THAT - ITAT stated that the litigation expenditure of ₹ 3 lakh being reimbursement claimed to be given to Mr.Ruben Thomas is connected with the loan of ₹ 5.75 lakh. The above finding of the ITAT has attained finality since the revenue nor the assessee had taken the matter in further proceedings. The assessee had not produced the criminal complaint to prove that a sum of ₹ 5.75 lakh was given by way of loan by the son-in-law of the assessee nor has the assessee proved the amount of sum of ₹ 5.75 lakh was given to Mr.A.L.Prasad in the year 2001. Since the ITAT s order in 2016 (4) TMI 1393 - ITAT COCHIN has clearly stated that the sum of ₹ 5.75 lakh is to be sustained if the documents relating to criminal proceedings did not contain anything about the claim of receipt of ₹ 5.75 lakh by way of loan from the son-in-law of the assessee, sustain the above additions because the assessee has failed to furnish the documents relating to the criminal proceedings neither before the Income Tax Authorities nor before the ITAT - Appeal filed by the assessee is dismissed.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Legitimacy of the addition of ?8.75 lakhs to the assessee's income. 3. Evidence supporting the claim of loan from the assessee's son-in-law. 4. Reimbursement of litigation expenses. Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The appeal was filed with a delay of 589 days. The assessee provided an affidavit and medical certificate stating that he was suffering from Carcinoma Colon with metastases, along with other health issues, which prevented timely filing. The Departmental Representative opposed the delay condonation. After reviewing the submissions and medical evidence, it was concluded that the delay was due to sufficient reasons and not due to any negligence on the part of the assessee. Consequently, the delay was condoned, allowing the appeal to be heard on its merits. 2. Legitimacy of the Addition of ?8.75 Lakhs to the Assessee's Income: The assessee, Managing Director of M/s Enjayes Spices & Chemical Oil Ltd., claimed that ?18 lakhs received from Mr. A.L. Prasad was a settlement for a failed loan arrangement. The Assessing Officer (AO) initially accepted ?6.75 lakhs as legitimate but added ?11.75 lakhs to the assessee's income due to lack of evidence. The CIT(A) later reduced this addition by ?3 lakhs for litigation expenses, sustaining ?8.75 lakhs. The ITAT remanded the issue back to the AO, who reaffirmed the addition due to insufficient evidence from the assessee. 3. Evidence Supporting the Claim of Loan from the Assessee's Son-in-Law: The assessee claimed that ?5.75 lakhs was advanced by his son-in-law, Mr. Ruban Thomas, to Mr. A.L. Prasad. Despite being given multiple opportunities, the assessee failed to provide concrete evidence or documents from the criminal proceedings to substantiate this claim. The Tribunal had previously ruled that the addition would be sustained if no such evidence was provided. The AO found no mention of the loan in the criminal documents, leading to the disallowance of ?5.75 lakhs. 4. Reimbursement of Litigation Expenses: The assessee also claimed ?3 lakhs as litigation expenses reimbursed to Mr. Ruban Thomas. The AO and CIT(A) disallowed this claim due to lack of supporting evidence. The ITAT had directed that the reimbursement claim was contingent on proving the loan from the son-in-law, which the assessee failed to do. As a result, the addition of ?3 lakhs for litigation expenses was also sustained. Conclusion: The Tribunal dismissed the appeal, confirming the addition of ?8.75 lakhs to the assessee's income. The assessee's failure to provide adequate evidence to substantiate the loan from his son-in-law and the reimbursement of litigation expenses led to the confirmation of the additions made by the AO and upheld by the CIT(A). The Tribunal's decision was based on the assessee's inability to meet the evidentiary requirements as per the directions in the earlier round of litigation.
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