2015 (6) TMI 1273 - AT - Income Tax

Telescoping benefit - unaccounted investment in house and on account of unaccounted cash found - AO there was a survey U/s 133A - As a result of the survey proceedings, excess cash, gold stock and incriminating documents were found - CIT(A) telescoping allowed suo moto by the AO even when the burden of proving its eligibility was on the assessee. HELD THAT - CIT(A) have given detailed reasoning for allowing telescopic benefit of income earned and investment made. DR has not controverted the finding of the CIT(A), therefore, we do not find any reason to intervene in the order of the CIT(A). Accordingly, order of the learned CIT(A) is upheld. Revenue's appeal is dismissed.

Summary

Issues:
Appeal against order allowing telescoping benefit and deleting unaccounted investment and cash addition.

Analysis:
The appeal was filed by the Revenue against the order of the CIT (A) for A.Y. 2009-10. The main grounds of appeal were related to allowing telescoping benefit and deletion of additions made for unaccounted investment in a house and unaccounted cash found. The assessee, engaged in the business of gold and silver jewellery, had undergone a survey under section 133A of the Income Tax Act, 1961, where excess cash, gold stock, and incriminating documents were discovered. The Assessing Officer added Rs. 11,02,857/- under the head of cash surrendered, as the telescopic benefit was not allowed to the assessee.

The CIT (A) allowed the appeal, stating that the assessee had submitted a cash-flow statement, but the Assessing Officer did not accept the telescopic claim due to lack of documentation regarding investments in a specific colony. The unrecorded transactions were limited to the first three months of the financial year, and there was no evidence that the unaccounted income had been invested elsewhere. The CIT (A) recognized the principle of telescopic effect and accepted the assessee's submission.

During the appeal before the tribunal, the Revenue supported the Assessing Officer's order, while the assessee's representative argued for the acceptance of the CIT (A)'s decision. The representative highlighted the surrender of income during the survey and the claimed telescoping of unaccounted investment in a house and cash found. Various case laws were cited to support the arguments presented.

After hearing both parties, the tribunal upheld the CIT (A)'s decision to allow the telescopic benefit. The tribunal noted that the CIT (A) had provided detailed reasoning for the decision, and since the Revenue did not challenge these findings, there was no justification to interfere with the CIT (A)'s order. Consequently, the Revenue's appeal was dismissed, and the order of the CIT (A) was upheld.