9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (8) TMI 238 - AT - Income TaxAssessment u/s.153C - Whether there is no incriminating material found during the course of search? - commission income undisclosed and difference in the sundry creditors - HELD THAT - Under the information regarding audit u/s.44AB of the Act in which he has mentioned the date of audit report as 10.09.2011. In the verification part of the return the date mentioned is 08.03.2012 and the acknowledgement has been generated on 10.03.2012. If the assessee has got audited u/s.44AB of the Income Tax Act and has obtained audit report from a Accountant as defined in the Income Tax Act, the figures shown in the financial statements are put in the appropriate columns and the figures shown in the income tax return should be tallied with the financial statements. The figures shown in the income tax return are in agreement with the audit reports produced before us which is placed in the paper book at page Nos.32 to 39. But the commission income has not been shown and the creditors figures are different. It is beyond the scope of our understanding that as to why figures are different in both the returns submitted by the assessee with the income tax department, whereas the auditor and the date of audit report is also same in the both the returns. As observed that Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. The case of the assessee clearly falls within the ambit of the observations in KABUL CHAWLA 2015 (9) TMI 80 - DELHI HIGH COURT towards undisclosed income . We, therefore, reject the contention of the assessee that there is no incriminating material found during the course of search by which the AO cannot interfere with the assessment completed originally while making the assessment u/s.153C of the Act. The dual policy taken by the assessee cannot be accepted. In the peculiar facts and circumstances of the case, the case law relied on by the ld. AR of the assessee is not applicable in the present case. In view of the above the legal ground raised by the assessee is hereby rejected. During the course of assessment proceedings the assessee could not explain the differences noticed by the AO in both the returns. The assessee had opportunity in the appellate proceedings, however, he could not avail the same and failed to explain before the CIT(A). CIT(A) has passed a good and reasoned order in respect of two additions made by the AO regarding commission income of ₹ 10,11,780/- and difference in the sundry creditors of ₹ 4,00,000/-, which do not require any further interference by us. Accordingly, we dismiss the grounds raised by the assessee on merits. Consequently, the appeal of the assessee is dismissed.
Issues Involved:
1. Jurisdiction and authority of the assessment under Section 153C. 2. Addition of ?10,11,780 under commission income. 3. Addition of ?4,00,000 under sundry creditors. 4. Applicability of Section 41(1) concerning the addition of sundry creditors. 5. Deletion of ?93,40,000 under Section 40A(3) regarding payment of expenditure other than account payee cheque/draft. Issue-wise Detailed Analysis: 1. Jurisdiction and Authority of the Assessment under Section 153C: The assessee contended that the assessment under Section 153C was without jurisdiction as no incriminating material was found during the search that pertained to the assessment year in question. The Tribunal noted that the search operation conducted on 08.10.2013 led to the seizure of documents, including purchase deeds, from the residence of Hapizur Raheman Khan. These documents were considered to have revenue implications. The Tribunal referred to the legal position established in the case of Kabul Chawla [2016] 380 ITR 573 (Delhi), which states that completed assessments can only be interfered with based on incriminating material unearthed during the search. The Tribunal found that the case fell within the ambit of undisclosed income, thus justifying the assessment under Section 153C. 2. Addition of ?10,11,780 under Commission Income: The assessee argued that the commission income of ?10,11,780 was wrongly shown in the original return filed under Section 139 and corrected in the return filed under Section 153C. The AO made the addition based on the discrepancy between the original return and the return filed under Section 153C. The CIT(A) confirmed the addition, stating that the assessee did not provide any explanation or supporting documents for the alleged mistake. The Tribunal upheld the CIT(A)'s decision, noting that the assessee failed to explain the difference and that the proceedings under Section 153C cannot be used to reduce income without filing a revised return. 3. Addition of ?4,00,000 under Sundry Creditors: The assessee claimed that the sundry creditors of ?4,00,000 were wrongly disclosed in the original return and corrected in the return filed under Section 153C. The AO added the amount to the total income, and the CIT(A) confirmed the addition, applying Section 41(1) of the Act, which pertains to the cessation of liability. The Tribunal agreed with the CIT(A)'s reasoning that the assessee's action suggested that the liability ceased to exist, thus attracting the provisions of Section 41(1). 4. Applicability of Section 41(1) Concerning the Addition of Sundry Creditors: The Tribunal upheld the CIT(A)'s application of Section 41(1), which deals with the cessation of liability. The assessee's reduction of sundry creditors by ?4,00,000 indicated that the liability ceased to exist, justifying the addition under Section 41(1). 5. Deletion of ?93,40,000 under Section 40A(3) Regarding Payment of Expenditure Other than Account Payee Cheque/Draft: The AO made an addition of ?93,40,000 for expenditures made in violation of Section 40A(3), which mandates payments above a certain limit to be made by account payee cheque/draft. The CIT(A) deleted the addition based on the remand report, and the Tribunal dismissed the Revenue's appeal on monetary grounds. The Tribunal noted that the assessee supported the CIT(A)'s order in the cross-objection, which was also dismissed. Conclusion: The Tribunal dismissed the assessee's appeal, confirming the additions of ?10,11,780 under commission income and ?4,00,000 under sundry creditors. The Tribunal found that the assessment under Section 153C was justified based on the presence of undisclosed income and the discrepancies in the returns filed by the assessee. The deletion of ?93,40,000 under Section 40A(3) was upheld, and the legal ground raised by the assessee regarding the jurisdiction of the assessment was rejected.
|
