2003 (9) TMI 305 - AT - Income Tax

Issues Involved:
1. Deletion of addition on account of amount receivable from M/s Ashok & Co. against the sale of shares.
2. Deletion of addition on account of investment in bank FDRs.
3. Deletion of addition on account of commission on consignment sold.
4. Deletion of addition on account of household expenses.
5. Deletion of addition by treating the capital of various persons as income of the assessee.
6. Deletion of disallowance under Section 40A(3) of the IT Act.
7. Deletion of addition on account of deposits in the assessee's bank account.
8. Deletion of addition on account of income from the estate of the deceased mother of the assessee.

Issue-wise Detailed Analysis:

1. Deletion of Addition on Account of Amount Receivable from M/s Ashok & Co. Against Sale of Shares:
The Department appealed against the deletion of Rs. 2,36,274 by CIT(A). The assessee explained that the shares were sold on an 'if allotted' basis, and the total amount payable by M/s Ashok & Co. was correctly recorded. The Tribunal confirmed the CIT(A)'s order, noting that the source for investment and income from the sale of shares was not disputed by the AO. Thus, the appeal of the Department on this ground was dismissed.

2. Deletion of Addition on Account of Investment in Bank FDRs:
The Department challenged the deletion of Rs. 4,24,000 related to investments in FDRs. The assessee provided detailed explanations and evidence for each FDR, showing that the investments were recorded in the books of M/s Ram Swaroop Dass Radha Kishan. The Tribunal found that the AO did not appreciate the correct facts and upheld the CIT(A)'s deletion of the addition. The Department's appeal was dismissed.

3. Deletion of Addition on Account of Commission on Consignment Sold:
The Department contested the deletion of Rs. 29,880. The assessee showed that the commission income was verifiable from the books seized during the search. The Tribunal agreed with the CIT(A) that the AO's assumption of no books being maintained was incorrect. The appeal of the Department was dismissed.

4. Deletion of Addition on Account of Household Expenses:
The AO added Rs. 1,20,000 for household expenses, which the CIT(A) reduced by Rs. 33,600 withdrawn by the assessee's wife. The Tribunal found the AO's estimate reasonable but directed a deduction for the wife's withdrawals, resulting in a net addition of Rs. 96,400. The Department's appeal was partly allowed.

5. Deletion of Addition by Treating the Capital of Various Persons as Income of the Assessee:
The AO treated the capital of several individuals as the assessee's income, totaling Rs. 6,47,147. The assessee argued that these individuals were independent entities using stock invest facilities. The Tribunal upheld the CIT(A)'s deletion, noting that there was no evidence to prove that the assessee handled or owned the shares. The Department's appeal was dismissed.

6. Deletion of Disallowance under Section 40A(3) of the IT Act:
The AO disallowed Rs. 13,620 under Section 40A(3), claiming it was paid in cash in one transaction. The assessee provided an explanation for two separate payments. The Tribunal agreed with the CIT(A) that genuine transactions should not fall under the scope of Section 40A(3) and dismissed the Department's appeal.

7. Deletion of Addition on Account of Deposits in the Assessee's Bank Account:
The AO added Rs. 23,600, claiming it was from undisclosed income. The assessee explained it was a repayment of a loan with interest. The Tribunal upheld the CIT(A)'s deletion of the addition, agreeing that the source of repayment was proved. The Department's appeal was dismissed.

8. Deletion of Addition on Account of Income from the Estate of the Deceased Mother of the Assessee:
The AO added Rs. 82,060, rejecting the will of the deceased mother as non-genuine. The assessee argued that the will met legal requirements. The Tribunal found the AO's reasons insufficient to declare the will non-genuine and upheld the CIT(A)'s deletion of the addition. The Department's appeal was dismissed.

Conclusion:
The Department's appeal was dismissed on the first, second, third, fifth, sixth, seventh, and eighth grounds, and partly allowed on the fourth ground.

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