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2019 (9) TMI 3 - AT - Income TaxCharging of interest under section 234B, 234C and 234D - HELD THAT - Charging of interest is consequential and mandatory and the AO has no discretion in the matter. This proposition has been upheld by the Hon ble Apex Court in the case of Anjum H. Ghaswala 2001 (10) TMI 4 - SUPREME COURT and therefore, uphold the action of the AO in charging the assessee the aforesaid interest u/s 234A, 234B and 234C of the Act. The AO is, however, directed to re-compute the interest chargeable u/s 234A, 234B and 234C of the Act, if any, while giving effect of this order. Addition u/s 69A - entries are recorded in the assessee s books of account - HELD THAT - Cash deposits are recorded in the books of account and are reportedly made on the receipt from a creditor. Further, the PAN and address of the creditor as well as ledger account copies of the creditor in the assessee s books of account have also been field before the AO. In these circumstances, it is evident that the AO has not made out a case calling for an addition under section 69A of the Act. Probably, an addition under section 68 of the Act could have been considered; but then that is not the case of the AO As in the case of DCIT Vs. Karthik Construction Co. 2018 (3) TMI 39 - ITAT MUMBAI held that addition under section 69A of the Act cannot be made in respect of those assets / monies / entries which are recorded in the assessee s books of account. In considered view, the aforesaid decision of the ITAT Mumbai Bench (supra) is squarely applicable to the facts of the case on hand, where the entries are recorded in the assessee s books of account - thus addition made under section 69A of the Act is bad in law - Decided in favour of assessee
Issues Involved:
1. Validity of Assumption of Jurisdiction under Section 148 of the Income Tax Act. 2. Addition under Section 69A of the Income Tax Act. 3. Charging of Interest under Sections 234B, 234C, and 234D of the Income Tax Act. Detailed Analysis: 1. Validity of Assumption of Jurisdiction under Section 148 of the Income Tax Act: The assessee challenged the assumption of jurisdiction under Section 148 on various grounds, including the reasons provided by the Assessing Officer (AO) being mere suspicions, the assessment being reopened for verification purposes, and the notice being barred by limitation. The assessee also argued that the AO relied on information from the Investigation Wing without independent application of mind, amounting to borrowed satisfaction, and that the necessary sanction under Section 151 was either not obtained or not provided. However, during the hearing, the assessee's representative submitted that these grounds were not being pressed. Consequently, these grounds were dismissed as not pressed and rendered infructuous. 2. Addition under Section 69A of the Income Tax Act: The assessee contested the addition made under Section 69A, arguing that the cash deposits in question were recorded in the books of account and were repayments of loans by M/s. Rippsons. The assessee provided all necessary details, including the PAN and address of the creditor, and ledger account copies. The contention was that the addition was based on suspicions and surmises and should be deleted. The Tribunal noted that the AO had listed cash deposits totaling ?13,00,000/- in the assessee's bank account but had not provided a reasoned finding for the addition of ?6,30,000/- (for AY 2011-12) and ?33,23,425/- (for AY 2012-13) under Section 69A. The Tribunal emphasized that Section 69A applies only to monies or assets not recorded in the books of account. Since the cash deposits were recorded in the books and were reportedly receipts from a creditor, the Tribunal found that the AO had not made a case for addition under Section 69A. Instead, an addition under Section 68 could have been considered, but that was not the AO's case. The Tribunal relied on the ITAT Mumbai Bench's decision in DCIT Vs. Karthik Construction Co., which held that additions under Section 69A cannot be made for assets or monies recorded in the books of account. Consequently, the Tribunal deleted the additions made under Section 69A for both assessment years. 3. Charging of Interest under Sections 234B, 234C, and 234D of the Income Tax Act: The assessee denied liability for interest charged under Sections 234A, 234B, and 234C, arguing that the computation details were not provided. The Tribunal upheld the AO's action in charging interest, citing the Hon'ble Apex Court's decision in Anjum H. Ghaswala, which established that charging interest is consequential and mandatory. However, the AO was directed to recompute the interest while giving effect to the Tribunal's order. Conclusion: The assessee's appeals for Assessment Years 2011-12 and 2012-13 were partly allowed. The Tribunal deleted the additions made under Section 69A for both years and upheld the charging of interest under Sections 234A, 234B, and 234C, directing the AO to recompute the interest accordingly.
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