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2019 (12) TMI 1186 - AT - Income TaxAssessment u/s 153A - Deduction u/s 80IA - HELD THAT - In this case, there is no dispute that the assessee has filed the return of income on 28.11.2014 and the time limit for issue of notice u/s 143(2) was expired on 30.09.2015. As per the settled law, the AO is not permitted to make the addition u/s 153A in the completed assessments without the support of incriminating material. In the instant case, there was no incriminating material found and the assessee has filed the return of income claiming deduction u/s 80IA. The audit report in Form 10CCB was filed manually. Therefore, addition made by the AO without support of the incriminating material u/s 80IA is unsustainable, accordingly, we set aside the order of the Ld.CIT(A) and allow the appeal of the assessee. Addition u/s 69A - survey u/s 133A was conducted in the business premises of Hira Panna Jewellers - HELD THAT - Loose sheets were extracted from the computer of Hira panna Jewellers pertaining to the period of April 2014 from 01.04.2014, though it was mentioned as JKS, neither the assessee, nor Shri Mahendra Kumar Jain have accepted that loose papers do belong to them. The assessee bluntly denied and stated that these loose papers did not belong to the assessee. The computer system found during the course of survey belonged to Hira Panna Jewellers, but not belonged to the assessee. As per section 292C of the Act, the loose sheets, books of accounts found during the course of search /survey are presumed to be belonging to the assessee, where the search or survey is conducted. In the instant case, survey was conducted in the business premises of Hira Panna Jewellers. Therefore, as per the presumption u/s 292C, loose sheets pertained to the Hira Panna Jewellers, but not to the assessee. Unless it is established that the loose sheets pertained to the assessee, the AO is not permitted to tax the contents or unexplained money or expenditure recorded in the loose sheets in the hands of the assessee. In the instant case, there was no material placed on record to show that the loose sheets were belonging to the assessee, therefore, the addition made by the AO in the hands of the assessee on account of unexplained money or expenditure is unsustainable. Accordingly, we set aside the order of the Ld.CIT(A) and delete the addition made by the AO. Deduction claimed u/s 80IA - mandation to file the audit report u/s 10CCB electronically - HELD THAT - As per section 80IA, it is mandatory to file the audit report u/s 10CCB electronically and in the instant case, the assessee has failed to furnish the same. Therefore, we do not find any infirmity in the order of the Ld.CIT(A) and the same is upheld. Appeal of the assessee is dismissed on this ground. Addition of unexplained jewellery - made the value of entire gold jewellery and silver articles as an addition since none of the family members filed the wealth tax returns or disclosed the same in the return of income - CIT(A) allowed 50% of jewellery as explained keeping in view the Board Circular and confirmed the balance addition - HELD THAT - Since the assessee s family consists of the assessee, his wife, daughter and son, the assessee is entitled for credit of 950 gms and the balance to be brought to tax. In the assessee s case, gold jewellery ornaments found was only 792.50 gms., the entire jewellery is treated as explained and no addition is called for. However, we confirm the addition relating to the silver articles found during the course of search. Accordingly, appeal of the assessee is partly allowed. Levy of interest u/s 234A, 234B and 234C is mandatory - We direct the AO to levy the interest correctly as provided u/s 234A, 234B and 234C of the Act.
Issues Involved:
1. Stay of outstanding demand for A.Y. 2014-15 to 2016-17 2. Addition related to disallowance of deduction u/s 80IA of the Income Tax Act 3. Addition of unexplained expenditure and money u/s 69A of the Income Tax Act 4. Addition of unexplained jewellery 5. Charging of interest u/s 234A, 234B, and 234C of the Income Tax Act Detailed Analysis: 1. Stay of Outstanding Demand for A.Y. 2014-15 to 2016-17: The assessee filed stay applications requesting for a stay of outstanding demand for the assessment years 2014-15 to 2016-17. Since the appeals were taken up simultaneously, the stay applications filed by the assessee were dismissed. 2. Disallowance of Deduction u/s 80IA: During the assessment proceedings, the AO found that the assessee claimed a deduction u/s 80IA amounting to ?5,13,096/- and filed Form No.10CCB manually, which was required to be filed electronically. Consequently, the AO disallowed the deduction. The CIT(A) upheld this disallowance. The Tribunal noted that the assessment was a completed assessment as no incriminating material was found during the search. Hence, the addition made by the AO without support of incriminating material was deemed unsustainable, and the appeal on this issue was allowed. 3. Addition of Unexplained Expenditure and Money u/s 69A: The AO made additions based on soft copy data found during a survey, which included unexplained expenditure of ?23,32,202/- and unexplained money of ?1,28,90,658/-. The CIT(A) confirmed these additions. However, the Tribunal observed that the loose sheets found during the survey did not belong to the assessee as per Section 292C, which presumes documents found during a search/survey belong to the person in whose premises they were found unless proven otherwise. Since no evidence was provided to link the sheets to the assessee, the Tribunal set aside the CIT(A)'s order and deleted the additions. 4. Addition of Unexplained Jewellery: During a survey at the assessee's residence, gold and silver articles were found. The AO added the value of these items to the income, as they were not disclosed in wealth tax returns. The CIT(A) allowed 50% of the jewellery as explained based on family customs and traditions. The Tribunal referred to the Board Circular, which allows credit for a certain amount of jewellery per family member. Given the family composition, the Tribunal allowed credit for 950 grams of gold jewellery, treating the entire jewellery found as explained, but upheld the addition for silver articles. 5. Charging of Interest u/s 234A, 234B, and 234C: The Tribunal noted that the levy of interest under these sections is mandatory. The AO was directed to levy the interest correctly as per the provisions of the Act. Conclusion: - Stay applications for A.Y. 2014-15 to 2016-17 were dismissed. - Appeal on disallowance of deduction u/s 80IA for A.Y. 2014-15 was allowed. - Additions of unexplained expenditure and money u/s 69A for A.Y. 2014-15 were deleted. - Addition of unexplained jewellery for A.Y. 2016-17 was partly allowed. - Directions were given to correctly levy interest u/s 234A, 234B, and 234C. The Tribunal's final orders were: - I.T.A. No.585/Viz/2019 for A.Y. 2014-15 was allowed for statistical purposes. - I.T.A. No.586/Viz/2019 for A.Y. 2015-16 was allowed for statistical purposes. - I.T.A. No.587/Viz/2019 for A.Y. 2016-17 was partly allowed.
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