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2018 (3) TMI 1462 - AT - Income TaxAddition u/s 68 - assessment u/s 153A - Held that - Since the assessee had no business income, no books of account were maintained and the addition was made only on the basis of the assessee s pass book, which is not a book of account; that as such, the addition made under section 68 of the Act is not sustainable. See CIT vs. Bhaichand H. Gandhi (1982 (2) TMI 28 - BOMBAY High Court) - It is undisputed that the addition was made only on the basis of the assessee s bank pass book, which is not sustainable in law. - Decided in favour of assessee Addition under the head Income from House Property - ALV determination - Held that - It is seen that the provisions of section 23(4) (b) of the Act stipulate that where the property consists of more than one house, the annual value thereof shall be determine under section 23(1), as if such property had been let out. It has also been so held in Dr. Prabha Sanghi , (2013 (1) TMI 18 - ITAT DELHI). In accordance with the same, the grievance by way of the ground no.1 is accepted. The addition is deleted.
Issues Involved:
1. Addition under Section 68 for unexplained gifts. 2. Interest charged under Section 234B. 3. Addition under Section 23(4) for notional annual value of house property. 4. Addition related to tea/sugar business. 5. Addition under Section 69C for unexplained expenditure on 'Goad Bharai Ceremony'. Detailed Analysis: 1. Addition under Section 68 for Unexplained Gifts: - A.Y. 2003-04: The assessee received gifts totaling ?10,00,000 (?5,00,000 each from two donors). The AO added this amount as unexplained under Section 68 due to lack of details on the donors' identity, creditworthiness, and genuineness of the gifts. The CIT(A) confirmed this addition. The Tribunal found that the addition was made solely based on the assessee’s bank passbook, which is not considered a book of account. Citing relevant case laws, the Tribunal held that such an addition is not sustainable and deleted the addition. - A.Y. 2004-05: The assessee received a gift of ?5,00,000, which was added by the AO under Section 68. The Tribunal applied the same reasoning as for A.Y. 2003-04 and deleted the addition. 2. Interest Charged under Section 234B: - A.Y. 2003-04 and 2004-05: The interest charged under Section 234B was deemed consequential and was not separately deliberated upon by the Tribunal. 3. Addition under Section 23(4) for Notional Annual Value of House Property: - A.Y. 2004-05: The AO added ?18,033 as notional annual value for a flat, which the assessee claimed was vacant. The CIT(A) reduced this to ?2,254. The Tribunal accepted the assessee's argument that the property should be deemed let out and deleted the addition. - A.Y. 2005-06 and 2006-07: The Tribunal applied the same reasoning as for A.Y. 2004-05 and deleted the respective additions. 4. Addition Related to Tea/Sugar Business: - A.Y. 2004-05: The AO added ?45,000 based on a seized document showing profits from tea/sugar business. The CIT(A) confirmed this addition. The Tribunal found that the amount was already declared for A.Y. 2003-04 and upheld the CIT(A)'s decision. - A.Y. 2005-06: The AO added ?2,76,502 as profit from tea/sugar business. The Tribunal found this to be a double addition since the business showed a loss for that year and deleted the addition. 5. Addition under Section 69C for Unexplained Expenditure on 'Goad Bharai Ceremony': - A.Y. 2006-07: The AO added ?5,00,000 as unexplained expenditure on the ceremony, which was reduced by the CIT(A) to ?2,88,181 based on seized documents. The Tribunal further reduced this to ?53,181, considering the shagun received by the assessee. Conclusion: - A.Y. 2003-04: Appeal partly allowed; addition under Section 68 deleted. - A.Y. 2004-05: Appeal partly allowed; additions under Sections 68 and 23(4) deleted, addition related to tea/sugar business upheld. - A.Y. 2005-06: Appeal allowed; additions under Sections 23(4) and for tea/sugar business deleted. - A.Y. 2006-07: Appeal partly allowed; addition under Section 23(4) deleted, and addition for 'Goad Bharai Ceremony' expenditure partly reduced. Order pronounced in the open court on 26/03/2018.
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