1984 (3) TMI 208 - AT - Income Tax

Summary

Issues:
1. Deletion of a sum of Rs. 10,000 against the addition made by the ITO of Rs. 19,800 to the income of the assessee.
2. Agitation against the addition of Rs. 9,800 sustained by the AAC and the levy of interest under ss. 139(B) and 217.

Analysis:
1. The appeal by the Department and the cross-objection by the assessee relate to the income-tax assessment for the year 1975-76. The Department's appeal is against the deletion of Rs. 10,000 from the addition made by the ITO of Rs. 19,800 to the assessee's income. The assessee's cross-objection challenges the addition of Rs. 9,800 sustained by the AAC and the levy of interest under relevant sections. The ITO added the credits in the assessee's capital account to the income as the source of funds was not adequately explained. The AAC partially allowed the cross-objection by deleting Rs. 10,000 from the addition. The Tribunal found the AAC's decision reasonable regarding the Rs. 10,000 credit but rejected the assessee's objection to the remaining Rs. 9,800 addition.

2. The assessee explained that the credits were advances received for supplying fertilizers and pesticides. The ITO added the credits to the income as the explanation was not substantiated. The AAC considered the assessee's agricultural income and allowed a credit of Rs. 10,000 out of the total addition. The Tribunal upheld the AAC's decision on the Rs. 10,000 credit but rejected the assessee's objection to the Rs. 9,800 balance. The Tribunal found the AAC's reasoning acceptable regarding the Rs. 10,000 credit but did not find merit in the assessee's objection to the remaining Rs. 9,800 addition.

3. Regarding the interest charged under ss. 139 (8) and 217, the grounds of appeal state that the AAC did not address this issue in the order. The Tribunal observed the omission and remanded the matter to the AAC for consideration and decision after hearing both parties. The Tribunal directed the AAC to address the issue of interest under the relevant sections in the appeal.

4. In conclusion, the Tribunal dismissed the Department's appeal and partially allowed the assessee's cross-objection. The Tribunal upheld the deletion of Rs. 10,000 from the addition but maintained the addition of Rs. 9,800. The matter of interest under ss. 139 (8) and 217 was remanded to the AAC for further consideration and decision after hearing both parties.