9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (10) TMI 1162 - AT - Income TaxRejection of books of accounts - Addition invoking the provision of section 145(3) - G.P. addition - Held that - The books of accounts have rightly been rejected u/s 145(3) of the Act for reasons stated by the AO and the ld CIT(A).However mere rejection of books of accounts cannot be a basis for making the addition as has been held by the Courts from time to time. In the instant case the declared gross profit is better than last two years as available on records. In the result the addition of 25, 000 is hereby deleted. - Decided in favour of assessee. Addition u/s 68 r.w.s 115BBE - Held that - We find that the assessee has submitted copy of confirmation ITR and computation of income of Smt Santosh Devi Jangir assessed under Income Tax Officer Ward - 7(3) Jaipur. In the return of income she has disclosed diary income of 2, 65, 200 and agricultural income of 3, 10, 200 which reasonably explains the source of cash deposit in her bank account of 2, 50, 000. In the result necessary onus in terms of creditworthiness which has been challenged by the Revenue is satisfied in the instant case. The decisions relied upon by the ld DR are distinguishable on facts - Decided in favour of assessee. Addition u/s 56(2)(vii)(b)(ii) - adopting the valuation of property taken by the registering authority - scope of amendment - Held tat - The provision of section 56(2)(vii)(b)(ii) are amended by the Finance Act 2013 with effect from 1-4-2014 so as to provide that where any immovable property is received by an individual or a HUF for a consideration which is less than the stamp duty value of the property by an amount exceeding 50, 000 the stamp duty value of such property as exceeds such consideration shall be chargeable to tax in the hands of the individual or the HUF as income from other sources In the instant case the assessee has entered into a registered sale deed on 1.11.2013 which effectively means he has lawfully received the immovable property in terms of title and possession though for an inadequate consideration on 01.11.2013 which falls during the financial year 2013-14 relevant to assessment year 2014-15. The provisions of section 56(vii)(b)(ii) are thus clearly applicable in the instant case. We affirm the order of the ld CIT(A) and the ground of appeal is dismissed. - decided against assessee.
Issues Involved:
1. Sustaining the addition of ?25,000 and invoking the provision of section 145(3) of the Income Tax Act, 1961. 2. Sustaining the addition of ?2,50,000 under section 68 read with section 115BBE of the Income Tax Act, 1961 on account of alleged unexplained cash credit/unsecured loan. 3. Sustaining the addition of ?2,85,313 under section 56(2)(vii)(b)(ii) of the Income Tax Act, 1961 by adopting the valuation of property taken by the registering authority. Issue-wise Detailed Analysis: 1. Sustaining the Addition of ?25,000 and Invoking Section 145(3): The assessee contested the addition of ?25,000 and the invocation of section 145(3) by the CIT(A). The CIT(A) upheld the rejection of the books of accounts by the Assessing Officer (AO) due to defects such as the absence of a stock register and detailed records of purchases, sales, and stock. Despite the books being audited without adverse remarks, the CIT(A) found the AO's rejection justified. However, the CIT(A) reduced the AO's arbitrary addition from ?50,000 to ?25,000, recognizing the better gross profit rate compared to previous years. The tribunal concluded that mere rejection of books does not justify an addition, especially when the declared gross profit was better than in prior years. Consequently, the addition of ?25,000 was deleted. 2. Sustaining the Addition of ?2,50,000 under Section 68 read with Section 115BBE: The assessee challenged the addition of ?2,50,000 as unexplained cash credit. The CIT(A) upheld the AO's addition, citing the failure to establish the creditworthiness of the creditor, Smt. Santosh Devi Jangir, despite submitting confirmation, ITR, and bank passbook. The AO noted that the creditor's bank account had minimal prior balance, questioning the credibility of the cash deposit. The tribunal found that the creditor's disclosed dairy and agricultural income reasonably explained the cash deposit, satisfying the necessary onus of creditworthiness. The tribunal distinguished the case from others cited by the Revenue and allowed the appeal, deleting the addition of ?2,50,000. 3. Sustaining the Addition of ?2,85,313 under Section 56(2)(vii)(b)(ii): The assessee disputed the addition based on the difference between the sale consideration and the stamp duty value of a property. The CIT(A) confirmed the addition, noting the assessee's acceptance of the tax liability. The tribunal clarified that the amendment to section 56(2)(vii)(b)(ii) applied from April 1, 2014, covering the assessment year 2014-15. Since the property transaction occurred on November 1, 2013, within the relevant financial year, the provisions were applicable. The tribunal affirmed the CIT(A)'s order, dismissing the appeal on this ground. Conclusion: The appeal was partly allowed, with the deletion of the ?25,000 addition under section 145(3) and the ?2,50,000 addition under section 68 read with section 115BBE, while sustaining the ?2,85,313 addition under section 56(2)(vii)(b)(ii). The judgment was pronounced in open court on July 16, 2018.
|
