2023 (6) TMI 568 - AT - Income Tax

Correct head of income - addition made treating the agricultural income as income from other source - HELD THAT - This issue has been deleted by the ITAT in assessee s own case 2022 (3) TMI 899 - ITAT DELHI . In the absence of any change in the factual matrix, we hereby delete the addition made by the AO. Unexplained purchase of property - Addition on the basis of MoU - Based on MOU found during search for purchase of property no. 9/11 , Nehru Place, Delhi, the AO made addition - HELD THAT - As MOU relates to A.Y. 2006-07 and not for A.Y. 2007-08 - AY 2006-07 is not covered in the block of six years, since the date of search was 12.02.2013 - AO considered the MOU in A.Y. 2007-08 on the basis of assumption that the MOU to be completed by 19. 06.2006 (A.Y. 2007 -08) - The said MOU was never been finally completed due to dispute between the parties.Case was filed in the Court of Addl. District Magistrate, Saket for execution of agreement to sell and MOU stands cancelled by the Court and hence the same stands null and void. The property in question has not been acquired. Hence, we hold that no amount can be taxed on this ground. Income from Partnership Firm - AO may examine whether the same has already been declared in the regular return of income. Commission Income - CIT(A) confirmed addition made on commission income @ 1.4% on a gross basis. as pleaded that no provision for expenses incurred for earning such income has not been given by the revenue. It cannot be said that the assessee incurred absolutely no expenses for earning such income - HELD THAT - Keeping in view, the sub- commission payments and other expenses, we determine 1% as the net commission income earned. The assessee gets relief of 0.4% on the commission income determined. Unexplained cash and Jewellery - cash found during the search - location of the cash found - HELD THAT - No statement of the assessee with regard to the cash found has been recorded u/s 132 (4) and statement recorded of the father of the assessee on day of search itself revealed that the amount pertains to the father and other family members. There was a clear demarcation of the dwelling premises pertaining to the father of the assessee who was a retired Government employee and also earning income from agricultural operations. The issue of income from agricultural operations has already been dealt above. Hence location of the cash found, the statement of father recorded on the date of search, we hold that no addition is called for on account of cash in the hands of the assessee. Jewellery has been separately valued in different names of three family member. The panchnama drawn has also clearly mentioned the fact of ownership of the jewellery with various people. Hence, the addition ought not to have been made in the hands of the assessee and hence, the same is ordered to be deleted. Appeals of the assessee are allowed.

Summary

Issues Involved:
The present appeals involve challenges against the orders of the Commissioner of Income Tax (Appeals) regarding various additions made by the Assessing Officer under different heads such as income from partnership firm, commission income, unexplained cash, and unexplained jewelry.

ITA No. 5651/Del/2017:

1. The appellant contested the order of the Commissioner of Income Tax (Appeals) on various grounds, including the arbitrary nature of the decision and non-admittance of additional grounds of appeal.
2. The appellant argued that the additions made by the Assessing Officer under section 153A/143(3) were against the provisions of the Income Tax Act, 1961, as no incriminating documents were found during the search.
3. The Commissioner of Income Tax (Appeals) was criticized for confirming additions without proper consideration of facts, resulting in double taxation and lack of application of mind.
4. The appellant's plea for admitting additional grounds of appeal was rejected by the Commissioner of Income Tax (Appeals), which was deemed as an error in law.
5. The addition of Rs. 83,097 as income from a partnership firm was challenged, arguing that the same income was already declared under section 153A, leading to double taxation.

ITA No. 5655/Del/2017:

1. Similar to the previous appeal, the appellant raised objections against the Commissioner of Income Tax (Appeals) order, alleging arbitrariness and non-compliance with the law.
2. The appellant contended that additions made by the Assessing Officer lacked a basis in cogent material and were merely assumptions, leading to an erroneous confirmation by the Commissioner of Income Tax (Appeals).
3. The Commissioner of Income Tax (Appeals) was faulted for not considering the absence of incriminating documents during the search, which should have impacted the additions made.

ITA No. 5656/Del/2017:

1. The appellant challenged the Commissioner of Income Tax (Appeals) order on similar grounds of arbitrariness and non-admittance of additional grounds of appeal.
2. The additions confirmed by the Commissioner of Income Tax (Appeals) were criticized for lack of basis in factual evidence and being solely based on assumptions.
3. The appellant argued that the additions made by the Assessing Officer were not supported by cogent material and should be deleted.

ITA No. 5657/Del/2017:

1. The appellant raised objections against the Commissioner of Income Tax (Appeals) order, citing arbitrariness and failure to consider additional grounds of appeal.
2. The additions under the heads of commission income and unexplained cash and jewelry were contested for being based on assumptions and lacking cogent material.
3. The appellant argued that the additions made by the Assessing Officer were not supported by facts and should be deleted based on the circumstances of the case.

Conclusion:
The ITAT Delhi allowed all the appeals of the appellant, highlighting errors in the orders of the Commissioner of Income Tax (Appeals) regarding various additions made by the Assessing Officer. The ITAT emphasized the lack of incriminating evidence, improper consideration of facts, and erroneous assumptions leading to additions, ultimately ruling in favor of the appellant and deleting the contested additions.