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2021 (2) TMI 638 - AT - Income TaxUnexplained bank credit entries - CIT(A) deleted the addition while admitting addition evidence in the form of confirmations, in violation of provisions of Rule - 46A(3) of Income Tax Rules, 1962 - AO argued CIT-A deleted addition on non examining the chargeability of the source of such entries to Income Tax and without giving opportunity to AO to examine the same - HELD THAT - The entries considered by the Assessing Officer includes bank reversal entries too. The explanation of the credit entries has been examined which are received from Ansal Properties Ltd., The Seth Vihar, CGHS Ltd. and the remaining from flagship company of the assessee. There has been an unreconciled difference of ₹ 8,84,500 /- which has been already declared as business income of ₹ 20,00,000/- in the return filed in response to the notice u/s 153A of the Income Tax Act, 1961. Since, the balance amount stands offered to tax and the other credit entries have been duly explained. We decline to interfere with the order of the ld. CIT (A) on this issue. Undisclosed income on sale of flats - undisclosed income assessed in the hands of the assessee on protective basis - documents seized during search in GTM Group and impounded during survey u/s 133A showing payments to the assessee - HELD THAT - The amounts were held to be received from sale of flats. The matter has already been dealt in the case of GTM Builders Promoters Pvt. Ltd. 2021 (2) TMI 597 - ITAT DELHI A.Y. 2006-07 under the head unaccounted income from sale of flats in Cooperative Societies vide para no. 30 to 32 wherein it was held that the addition was unwarranted. Revenue appeal dismissed.
Issues Involved:
1. Deletion of addition towards unexplained bank credit entries. 2. Deletion of addition towards undisclosed income on sale of flats on a protective basis. Issue-wise Detailed Analysis: 1. Deletion of Addition Towards Unexplained Bank Credit Entries: The Assessing Officer (AO) identified unexplained debit and credit entries in the bank account of the assessee, particularly a credit entry of ?25,00,000 on 11.08.2005, which was not explained by the assessee. Consequently, the AO treated these unexplained credit entries, totaling ?76,90,039, as unexplained income, but after considering ?20,00,000 declared by the assessee as income from various civil works, added ?56,90,039 to the income of the assessee. Upon appeal, the CIT(A) deleted the addition, stating that the entries were duly explained. The revenue, dissatisfied with this decision, appealed to the Tribunal. The Tribunal examined the documents and explanations provided by the assessee, who argued that the AO incorrectly calculated the credit entries. The actual credit entries amounted to ?63,84,539, and after excluding the declared income of ?20,00,000, the addition should have been ?43,84,539. The Tribunal noted that the AO included reversal entries in the total, which should not have been considered. The Tribunal found that the major credit entries totaling ?55,00,000 were from credible sources like Ansal Properties Ltd., The Seth Vihar CGHS Ltd., and the flagship company of the assessee. An unreconciled difference of ?8,84,500 was already declared as business income. Since the credit entries were duly explained and the balance amount offered to tax, the Tribunal upheld the CIT(A)'s order, declining to interfere on this issue. 2. Deletion of Addition Towards Undisclosed Income on Sale of Flats on a Protective Basis: The AO assessed an amount towards undisclosed income from the sale of flats on a protective basis, based on documents seized during a search in the GTM Group. The CIT(A) deleted this addition, and the revenue appealed. The Tribunal referred to a related case of GTM Builders & Promoters Pvt. Ltd., where it was held that the addition was unwarranted. Consequently, the Tribunal dismissed the revenue's appeal on this ground. Conclusion: The Tribunal dismissed the revenue's appeal, upholding the CIT(A)'s order on both issues. The credit entries were found to be duly explained, and the addition for undisclosed income from the sale of flats was deemed unwarranted. The order was pronounced in the Open Court on 10/02/2021.
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