2019 (6) TMI 339 - AT - Income Tax

Addition u/s 68 - HELD THAT - The acceptance of the sum being received from the assessee, i.e., in the case of Shyam Puri (HUF) , cannot operate to prejudice the assessee as the assessee is not a party to those proceedings. True, the assesssee cannot take a different stand in her case, and the principle of approbate and reprobate, applicable to tax proceedings, apply, so that the receipt by the assessee is admitted. Where so, the assessee s explanation would in that case have to be accepted in full, i.e., of it being the sale proceed by her sons shop. Her explanation cannot be accepted in part. In fact, matters are to be decided on the basis of evidence. It is for such reasons, that it is oft-stated by the higher courts of law that the substantive and protective assessments are heard and decided together by the appellate authorities. The assessment in case of Shyam Puri (HUF) has become conclusive inasmuch as it is not pending in further appeal. No case for bringing the sum of ₹ 16 lacs in the assessee s hands is made out. Per contra, the assessee cannot be allowed capital loss of ₹ 2.52 lacs, i.e., as claimed. Decide accordingly. Addition on account of credit entries in the assessee s bank account with PNB, Purani Mandi, Jammu - assessee, who claims the same to be dividend or interest from shares or debentures, exempt u/s. 10(34D), or, alternatively, maturity proceeds of UTI-MIP(IV), could not substantiate either with any document, resulting in the same being assessed as unexplained credit in her bank account, i.e., u/s. 69A, the assessee being admittedly in receipt of money to that extent, so that the onus to satisfactorily explain the nature and source of the same the said bank deposits, was on her - HELD THAT - The bank account is not on record. The impugned deposits are in a bank account maintained at Jammu, where the assessee resides for the past several years now. There is nothing to show that the credits are from, as stated, UTI, in which case the assessee definitely has a case in-as-much as the same could only be a capital receipt (on redemption), or dividend, etc. There is no improvement in the assessee s case even before me, so that I am constrained not to interfere; the position of law, as aforestated, being amply clear.

Issues Involved:
1. Delay in filing the appeal.
2. Validity of notice under section 148 of the Income Tax Act.
3. Assessment of ?16 lacs related to the sale proceeds of a shop.
4. Addition of ?1,44,124 as unexplained credit in the bank account.

Detailed Analysis:

1. Delay in Filing the Appeal:
The appeal was delayed by 120 days and was presented on 04.02.2013 instead of the due date of 06.02.2012. The delay was attributed to the critical medical condition of the assessee, who was undergoing treatment at Gangaram Hospital and later passed away on 20.01.2013. The appeal was filed by her son after performing her last rites. The delay was deemed to be sufficiently explained and was condoned, allowing the hearing to proceed.

2. Validity of Notice under Section 148:
The assessee contested the validity of the notice under section 148, claiming it was served beyond the six-year period stipulated by law. The notice dated 31.03.2011 was argued to have been served on 04.04.2011. The Tribunal found that there was no evidence to show the notice was served on 31.03.2011. However, it was held that the issue of notice within the stipulated time is what matters, not its service. The Tribunal referenced several judicial decisions, including R.K. Upadhyaya v. Shamabhai P. Patel, which upheld the validity of notices issued within the time limit but served later. Thus, the assessee’s claim was rejected.

3. Assessment of ?16 Lacs Related to the Sale Proceeds of a Shop:
The principal issue was the assessment of ?16 lacs, claimed to be the sale proceeds of a shop belonging to the assessee’s deceased son. The assessee explained that the shop was sold as a distress sale due to migration from Srinagar to Jammu. However, the explanation was unsubstantiated with no evidence of the sale transaction, property ownership, or buyer details. The Tribunal noted that the assessee's case was unevidenced and emphasized that adjudication must be based on material on record. The Tribunal concluded that either the capital loss claimed by the assessee on the sale could not be allowed, or if the sale proceeds were accepted, the amount could not be assessed as unexplained receipt. The addition of ?16 lacs was not sustained, but the capital loss was also not allowed.

4. Addition of ?1,44,124 as Unexplained Credit:
The assessee claimed the amount as dividend or interest from shares or debentures, or alternatively, as maturity proceeds of UTI-MIP(IV). However, no supporting documents were provided. The Tribunal noted the lack of evidence and upheld the addition as unexplained credit under section 69A, as the onus to explain the nature and source of the bank deposits was on the assessee. The Tribunal did not interfere with the addition due to the clear position of law.

Conclusion:
The appeal was partly allowed. The delay in filing was condoned, the notice under section 148 was deemed valid, the addition of ?16 lacs was not sustained but the capital loss was disallowed, and the addition of ?1,44,124 as unexplained credit was upheld. The order was pronounced in the open court on March 29, 2019.

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