2024 (2) TMI 1047 - HC - Income Tax

Aggregation of additional income - Validity of assessment order - three additions were made to the total income of the assessee - difference in opening and closing balances, loan availed of by the petitioner and interest income earned from Axis Bank. HELD THAT - As aggregate additional income was arrived at by examining the difference between the opening and closing balance. While undertaking this exercise, the respondent has failed to take into account the fact that the sale consideration from the proceeds of sale of agricultural land was duly disclosed in the statement of income read with the schedule thereto. As regards the interest income from Axis Bank, the same is also duly disclosed in the entry relating to TDS under the head 'Total income' read with Schedule 18. Thus, it appears that the AO did not take into account the material placed on record and, consequently, the order impugned herein is vitiated by non-application of mind. Addition of loan availed of by the petitioner it appears that the petitioner has not placed all necessary documents on record. Therefore, it is just and necessary to direct the petitioner to place all relevant documents for consideration. For reasons set out above, the writ petition is disposed of by remanding the matter for re-consideration. The assessee is permitted to respond to the assessment order by treating the same as a show cause notice within a maximum period of four weeks from the date of receipt of a copy of this order. Upon receipt thereof, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, take into consideration all documents produced by the assessee and issue a fresh assessment order in respect of the three additions dealt with in the impugned assessment order.

Summary

Issues involved:
The petitioner challenges an assessment order with three additions to the total income, involving issues related to disclosure of income from sale of agricultural land, interest income from Axis Bank, and a loan availed by the petitioner.

Disclosure of income from sale of agricultural land:
The petitioner explained the difference in the opening and closing balance, attributing it to the sale of agricultural land for Rs. 7,91,00,000, which was disclosed in the statement of income with full exemption. The petitioner contends that all relevant details were submitted, and the entire sale consideration was reflected.

Interest income from Axis Bank:
The petitioner's counsel argued that the interest income of Rs. 2,10,000 earned from Axis Bank was duly reflected in the ledger account after TDS deduction. The respondent, however, claimed that the statement of income did not disclose this interest income.

Loan availed by the petitioner:
Regarding the loan availed by the petitioner, it was stated to be a genuine transaction, but the petitioner could not obtain balance confirmation from the lender at that time. The petitioner's counsel asserted that all relevant documents are now available to prove the genuineness of the transaction.

Court's Decision:
Upon examination, the Court found that the Assessing Officer had not considered the material placed on record, leading to a flawed assessment order. The Court directed a reconsideration of the matter, allowing the petitioner to respond to the assessment order within four weeks, followed by a fresh assessment within four months. The petitioner was instructed to provide all necessary documents for proper consideration.