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2013 (4) TMI 660 - AT - Income TaxAssessability of income pertaining to the proprietorship concern(SI)- whether should be assessed as the income of the late Shri S.P.Goyal or in the hands of the assessee second wife of Shri S.P.Goyal - Held that - Once the issue about assessability of income pertaining to the said proprietorship concern SI in the hands of late Shri S.P. Goyal stands concluded by ITAT s directions in 2007 (9) TMI 533 - ITAT DELHI, no addition in respect of any income attributable to SI can be made in the hands of the assessee. Therefore, the impugned order of CIT(A), which is passed without considering the assessee s legal stand in this behalf and without properly appreciating the ITAT s order and confirming the additions again, is without justification and cannot be sustained. The assessing officer in the second round should not have made the additions in the first place in the hands of the assessee and should have rightly been made in the hands of late Shri S.P. Goyal, as directed by the ITAT. Thus, the assessing officer s order also runs contrary to the findings of the ITAT. In favour of assessee.
Issues Involved:
1. Assessment of business income in the hands of the assessee. 2. Legality of additions on account of payments and interest. 3. Assessment of income in the hands of Mrs. Vandana Goyal. 4. Benami transactions and ownership. 5. Procedural issues regarding non-appearance and ex-parte decisions. 6. Finality of CIT(A)'s findings and ITAT's directions. Detailed Analysis: 1. Assessment of Business Income in the Hands of the Assessee: The core issue revolves around whether the business income of M/s Steelex International (SI) should be assessed in the hands of the assessee, Mrs. Vandana Goyal, or in the hands of the estate of her deceased husband, Shri S.P. Goyal. The assessee contended that she was merely a benami proprietor, with the actual business being conducted by her late husband due to his inability to borrow money in his own name. The CIT(A) and ITAT upheld this contention, concluding that the income from SI should be added to the estate of Shri S.P. Goyal and not the assessee. 2. Legality of Additions on Account of Payments and Interest: Several additions were contested by the assessee, including: - Rs. 6,50,000/- on account of payments to M/s Tin Manufacturing Co. - Rs. 9,02,044/- as excess interest payment. - Rs. 52,92,387/- related to the import of Tin Plates. - Rs. 12,90,000/- and other amounts for various transactions. The CIT(A) and ITAT found that these additions were unjustified and not based on factual evidence. The assessing officer had failed to consider the context and supporting documents provided by the assessee, leading to the conclusion that these additions were illegal and should be deleted. 3. Assessment of Income in the Hands of Mrs. Vandana Goyal: The consistent stance of the assessee was that the income attributed to her should be assessed in the hands of her late husband, Shri S.P. Goyal. The CIT(A) and ITAT accepted this argument, noting that the business operations were conducted by Shri S.P. Goyal using the assessee's name for convenience. Consequently, the income from SI was not to be assessed in the hands of Mrs. Vandana Goyal. 4. Benami Transactions and Ownership: The case heavily relied on the concept of benami transactions, where the real owner conducts business in the name of another person. The CIT(A) and ITAT both concluded that the business of SI was a benami transaction, with Shri S.P. Goyal being the real owner. This finding was not challenged by the revenue, making it final and binding. The ITAT emphasized that the income from SI should be assessed in the hands of the estate of Shri S.P. Goyal, reinforcing the benami nature of the transactions. 5. Procedural Issues Regarding Non-Appearance and Ex-Parte Decisions: The assessee's appeals were initially dismissed due to non-appearance, relying on the ITAT Delhi Bench order in the case of Multiplan India Ltd. However, upon filing a miscellaneous application, the appeals were restored and heard on merits. This procedural aspect highlights the importance of due process and the opportunity for the assessee to present her case comprehensively. 6. Finality of CIT(A)'s Findings and ITAT's Directions: The CIT(A)'s findings that the income from SI should be assessed in the hands of Shri S.P. Goyal were not challenged by the revenue, thus becoming final. The ITAT reiterated this conclusion, directing that the additions should be made in the hands of the estate of Shri S.P. Goyal. The assessing officer's subsequent actions contrary to these findings were deemed unjustified, leading to the deletion of the contested additions in the hands of the assessee. Conclusion: The appeals filed by the assessee were allowed, with the ITAT directing that the income and contested additions related to M/s Steelex International should be assessed in the hands of the estate of Shri S.P. Goyal, not the assessee, Mrs. Vandana Goyal. This decision was based on the established finding of benami transactions and the finality of the CIT(A)'s unchallenged conclusions.
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