2001 (3) TMI 233 - AT - Income Tax

Summary

Issues Involved:
1. Additions on account of alleged "on money" paid for the purchase of shops.
2. Additions on account of low household expenditure.
3. Charging of interest u/s 139(8)/215.

Summary:

1. Additions on Account of Alleged "On Money" Paid for the Purchase of Shops:
The main issue in ITA Nos. 4512, 4501, 4506, 4508, 4510, 4505, and 4513/Ahd/1991 revolves around the additions made by the AO due to alleged "on money" paid by the assessees for purchasing shops in JJ Air-conditioned Market, Surat from M/s JJ Corporation. The AO believed that the market price of these shops was higher than the recorded price, leading to additions based on presumed "on money" payments. The CIT(A) confirmed some additions and restored others for fresh adjudication. The Tribunal found that the AO did not provide sufficient evidence to prove that the assessees paid any "on money" and directed the deletion of these additions.

2. Additions on Account of Low Household Expenditure:
In ITA Nos. 4505, 4513, 4500, 4509, and 4511/Ahd/1991, the AO made additions due to low household expenditure shown in the books, estimating higher expenses based on a seized milk bill and other factors. The CIT(A) provided partial relief by estimating the household expenses at Rs. 8,000 per month per family, resulting in an addition of Rs. 71,000 per assessee. The Tribunal found the AO's and CIT(A)'s estimates unsupported by evidence and reduced the addition to Rs. 20,000 per assessee.

3. Charging of Interest u/s 139(8)/215:
The assessees challenged the charging of interest u/s 139(8)/215, arguing that no opportunity was given to them before levying the interest. The Tribunal admitted this additional ground, referencing the Hon'ble Supreme Court's decision in National Thermal Power Co. Ltd. vs. CIT and the Hon'ble Andhra Pradesh High Court's decision in Ambica Chemical Products vs. ITO. The Tribunal restored the issue to the AO for fresh adjudication, ensuring the assessees are given an opportunity to present their case.

Conclusion:
The appeals were partly allowed, with directions to delete the additions related to "on money" and reduce the additions for household expenditure. The issue of interest u/s 139(8)/215 was remanded to the AO for fresh consideration.