2021 (5) TMI 965 - AT - Income Tax

Correct head of income - whether the very amounts could also be allowed to be assessed under the head business once they have been assessed as income from other sources ? - HELD THAT - As assessee has itself conceded its challenge to correctness of learned lower authorities action treating the impugned sums; assessment-year wise as income from house property and business income; as the case may be; respectively. Faced with this situation, we deem it appropriate to restore the instant issue back to the file of Assessing Officer to this limited extent only to the extent that whatever is the income assessed as income from other sources in the assessee s hands out of its books/P L A/c of the corresponding assessment years, shall not be assessed under the head business income as well so as to avoid double addition. It is made clear that it shall be the assessee s risk and responsibility only to file on record all the relevant details proving that the very sums of additions before us have also been assessed under the head income from house property and business income; as the case may be. Un-explained cash credits u/s.68 - Revenue s vehement contention before us is that the assessee has not been able to prove the corresponding nexus between the impugned addition viz-a-vis the sum assessed in M/s.J.B.Educational Society, Hyderabad s hands - HELD THAT - Fact remains that the Assessing Officer appears to have filed a remand report dt.22-04-2014 prima facie indicating the alleged nexus. Be that as it may, since much water is flown down the stream since 2013, we deem it appropriate to restore the instant second issue as well back to the file of Assessing Officer for his afresh factual re-conciliation to ensure that the impugned double addition is not made in the assessee s group entities hands. It is further made clear that it shall be a risk and responsibility of the assessee only to file its supportive evidence proving live nexus of the impugned sister concern.This second issue also accepted partly for statistical purposes in foregoing terms

Summary

Issues involved:
1. Correctness of lower authorities' treatment of receipts as income from house property and business income.
2. Treatment of unexplained cash credits under section 68 of the Income Tax Act.
3. Interest disallowance.
4. Validity of Section 153C proceedings.

Analysis:

Issue 1:
The appeals involved challenges against the lower authorities' treatment of certain receipts as income from house property and business income. The assessee initially contested this treatment but later withdrew the challenge to avoid double addition under different heads of income. The Tribunal decided to restore the issue to the Assessing Officer to ensure that the amounts assessed as income from other sources are not additionally assessed as business income. The assessee was directed to provide relevant details within three opportunities of hearing.

Issue 2:
The second substantive issue pertained to unexplained cash credits under section 68 of the Act. The assessee relied on a previous tribunal order related to a group entity to argue against the addition. However, the Revenue contended that the nexus between the additions in the assessee's case and the group entity was not proven. The Tribunal decided to send this issue back to the Assessing Officer for a fresh factual reconciliation to prevent double additions in the group entities' hands. The assessee was instructed to provide evidence supporting the nexus of the sister concern.

Issue 3:
The third issue involved interest disallowances in specific amounts for different assessment years. The assessee initially contested these disallowances but later withdrew the challenge due to the smallness of the amounts involved. As a result, this issue was rejected as not pressed.

Issue 4:
The final issue concerned the challenge to the validity of Section 153C proceedings. The assessee decided not to press this legal issue during the hearing. Consequently, all grounds related to this issue were declined as not pressed.

In conclusion, the Tribunal partly allowed the assessee's appeals for statistical purposes based on the decisions made on each issue. The common order was pronounced on 27th May 2021, and a copy was to be placed in the respective case files.