2020 (10) TMI 186 - AT - Income Tax

Assessment u/s 153A - unexplained gifts - Whether no incriminating material found? - HELD THAT - DR could not controvert the above argument made by the leaned Counsel for the Assessee nor could produce or made a statement that any incriminating material is available in the record of the AO. Once there is no incriminating material, the issue is squarely covered in favour of assessee and against Revenue by the decision in the case of Continental Warehousing Corporation 2015 (5) TMI 656 - BOMBAY HIGH COURT . Resultantly, this issue of assessee s appeal is allowed. No addition of bogus gift. - Decided in favour of assessee.

Summary

Issues Involved:
Appeals arising from orders of Commissioner of Income Tax (Appeals)-37, Mumbai in Appeal Nos. CIT(A)-37/I.T.483 to 489/ACCC-13/11-12 & CIT(A)-37/I.T. 504 to 508/ACCC-13/11-12 for AYs 2003-04, 2004-05 under section 143(3) read with section 153A of the Income-tax Act, 1961. Issue of addition on account of alleged bogus gift received from various parties. Issue of interest charged under section 234A and 234B of the Act.

Detailed Analysis:

1. Issue of Addition on Account of Bogus Gift:
The appeals concerned the addition made on account of a bogus gift received by the assessee, totaling ?14,09,555. The Counsel for the assessee contended that the gifts were genuine and duly explained, supported by documentary evidence. It was argued that no incriminating material was found during the search, and the gifts were declared in the original income tax return filed before the search. Citing relevant case law, it was asserted that the addition was not sustainable without incriminating material. The Tribunal, in line with previous decisions, directed the Assessing Officer to delete the addition, as the issue was in favor of the assessee due to the absence of incriminating material.

2. Issue of Interest Charged under Section 234A and 234B:
Regarding the charging of interest under section 234A and 234B of the Act, the Tribunal remanded the matter back to the Assessing Officer for fresh adjudication. The Tribunal instructed the Assessing Officer to consider the assessee's arguments afresh and make a decision on this issue. The same approach was taken for similar cases with identical facts and circumstances, with the issue of interest being restored to the Assessing Officer's file for reconsideration.

3. Conclusion:
The appeals were partly allowed, with the addition on account of the alleged bogus gift being deleted due to the lack of incriminating material. The issue of interest charged under section 234A and 234B was remanded back to the Assessing Officer for fresh adjudication in all relevant cases. The Tribunal's decision was pronounced in open court on 07.07.2020.