2012 (11) TMI 339 - AT - Income Tax

Addition on account of Deposit Work Held that - There is no evidence on record to establish that the amount invested in FDRs belong to the Market Committee and not to the appellant and therefore, as per him, the interest earned by the assessee has been rightly assessed in the hands of the assessee - In view of the absence of evidence and also the precedent in assessee s own case, no justification to interfere with the order of the CIT(Appeals) - Ground raised by assessee is dismissed. Additions on account of sale of tender forms and establishment fees, paid to the contractor Held that - In the immediately preceding assessment year, the issue was decided against the assessee and following the same, impugned addition has been upheld. The said position continues even before us and there is no material brought on record by the appellant to the contrary - Ground raised by appellant are dismissed as being bereft of merit. Addition on account of sums received from HRDFA Held that - The appellant had shown these as capital receipts whereas the AO had treated it to be revenue receipts. The appellant has challenged he addition stating that the amount in question is a contribution received from a charitable trust whose income is exempt u/s 12A of the I.T. Act. However, there is no merit in this submission as the nature of the receipts in the hands of the appellant is revenue irrespective of the source from where it has been received. The AO s action in treating these receipts as revenue receipts is upheld - ground of appeal is dismissed. Addition on account of hiring charges, in respect of tools and Plants - Appellant had treated this income as capital receipts stating that these have been received in connection with the capital work undertaken by the appellant on behalf of the market committees. The AO however treated these to be a Revenue receipts. The appellant has not elaborated as to how the AO s action in treating these receipts as Revenue receipts is against law. Therefore, the action of the AO in treating the receipts form hire charges of tool & plants is revenue receipts is upheld - This ground of appeal is dismissed. Addition on account of honorarium paid to the Chairman Held that - Addition has been made on the ground of non-filing of the details, in the matter. In view of this, it would be fair and reasonable to restore the issue, to the file of the AO, for fresh adjudication of the issue, as per law, after obtaining necessary details, in the matter. The assessee is requested to render necessary cooperation to the AO, in the matter. However, it is incumbent upon the AO to afford reasonable opportunity to the assessee. Accordingly, this ground of appeal of the assessee is al lowed for statistical purposes - In the result, appeal of the assessee is partly allowed.

Summary

Issues:
Appeals filed against CIT(A) order under Income-tax Act, 1961 - Similar facts and issues in both appeals - Grounds of appeal challenging various additions - Tribunal's consideration of each ground based on precedents and evidence presented - Dismissal of most grounds due to lack of evidence or precedent support - Partial allowance of appeal.

Analysis:

1. The appellant filed two appeals against the CIT(A) orders under the Income-tax Act, 1961. Since the facts and issues in both appeals were similar, they were disposed of together for convenience and brevity.

2. The grounds of appeal in both appeals challenged various additions made by the CIT(A). The appellant contended that the additions were illegal, arbitrary, and deserved to be deleted. The issues included additions on interest on deposit works, sale of tender forms, establishment fees, sums received from a charitable trust, hiring charges for tools and plants, honorarium paid to the chairman, and general claims for modification of grounds.

3. The Tribunal noted that most grounds were covered by its earlier order in the appellant's own case for the assessment year 2006-07. The Tribunal considered each ground separately and analyzed the evidence and precedents. Grounds related to interest on deposit works, sale of tender forms, and establishment fees were dismissed as they were previously decided against the appellant and lacked supporting evidence.

4. The Tribunal upheld the CIT(A)'s decision on the addition of sums received from a charitable trust, as the appellant failed to provide evidence of the donation receipt. The Tribunal emphasized the appellant's burden to establish the receipt and eligibility under the Act.

5. The Tribunal also dismissed the appellant's claim regarding hiring charges for tools and plants, as the receipts were treated as revenue and not capital. The decision was based on a lack of evidence supporting the appellant's position.

6. Regarding the honorarium paid to the chairman, the Tribunal found that the disallowance was due to the appellant's failure to provide details on the purpose of the payment and other related expenses. The Tribunal directed the issue to be restored to the Assessing Officer for fresh adjudication after obtaining necessary details, emphasizing the importance of proper management activities.

7. The Tribunal concluded by partially allowing the appeal, considering the similarities in facts and issues in both appeals. The order was pronounced in open court on a specified date.

8. Overall, the Tribunal's decision was based on a thorough analysis of each ground of appeal, considering evidence, precedents, and legal provisions under the Income-tax Act, 1961. The dismissal of most grounds was due to the appellant's failure to provide sufficient evidence or establish legal merit, while one issue was directed for further assessment by the Assessing Officer.