2019 (2) TMI 727 - HC - Income Tax

Addition u/s 68 - amounts received towards share transactions was that AOP was not an income tax payee - Held that - This Court notices, at the outset, that the assessee never claimed that the AOP was a firm or income tax payee. By all accounts, it appears to have been formed only by way of a venture for only one transaction, i.e. securing of shares, which was the subject matter of business venture. In these circumstances, the concurrent finding of fact on this account is sound and does not call for interference. - Decided against revenue

Summary

Issues:
1. Disallowance of amounts under different heads for Assessment Years 2007-08 and 2008-09.
2. Disallowance of cash deposits and agricultural income claim.
3. Disallowance of amounts received from M/s. Mittal Traders.
4. Disallowance of amounts received from Veerendra Kumar, Association of Persons (AOP).

Analysis:
1. The Revenue challenged the orders of the Income Tax Appellate Tribunal (ITAT) for AYs 2007-08 and 2008-09, contending that the reported amounts by the assessee were erroneous. The Assessing Officer (AO) disallowed amounts under different heads for AY 2007-08, including agricultural income claim, business loss, and cash deposit. Both the CIT(A) and the ITAT set aside these disallowances, holding the assessments to be incorrect.

2. A substantial amount received from M/s. Mittal Traders and deposited in the assessee's bank was brought to tax under Section 68 of the Income Tax Act, 1961. The CIT(A) found that the assessee provided necessary details regarding the source of the funds, including PAN particulars and income sources of the depositor. The burden placed upon the assessee was deemed fulfilled, leading to the set aside of the amounts brought to tax.

3. In the subsequent year, an amount deposited by the assessee in cash was contended to be received from Veerendra Kumar, AOP, comprising 52 members. The AO disallowed these amounts under Section 68 of the Act, claiming that AOP was not an income tax payee. However, the CIT(A) and the ITAT reversed this decision, noting that detailed information about each member of the AOP was provided to the AO. The Court upheld this finding, emphasizing that the AOP was formed for a specific transaction and did not need to be an income tax payee.

4. The Court dismissed the Revenue's claims, stating that the questions raised did not constitute substantial questions of law. The appeals were consequently dismissed, along with any pending applications. The judgment affirmed the decisions of the CIT(A) and the ITAT, highlighting the importance of providing necessary details and fulfilling the burden of proof in tax assessments.