2024 (11) TMI 864 - AT - Income Tax

Assessment u/s 153A - Addition u/s 69 - assessee had availed of unsecured loan - HELD THAT - It is true that the AO observed that the assessee had deposited a sum in the account of M/s Mohan Broker Agency, and credit was also shown by M/s Mohan Broker Agency and the assessee did not disclose in her Income tax return about said transaction, once said credit dated 7.1.2017 had been depicited in said statement of M/s Mohan Broker Agency, and no action was taken as regards the Income tax return furnished by the husband of the appellant in the relevant Assessment Year, it cannot be said that this is a case of discovery of any incriminating material only on search and seizure action on 29.3.2018. Therefore, this addition made by resorting to provisions of section 69 of the Act deserved to be set aside. We order accordingly. Sale of immovable property - Other addition, the only submission on behalf of the appellant is that having regard to the income declared by the assessee for the year under consideration and income declared in the previous 3 years, it cannot be said that the assessee had not the capacity to make payment of Rs. 92,700/-, and as such, this addition deserves to be set aside. Sale consideration in respect of the immovable property was Rs. 12,48,000/-, and the assessee admittedly paid Rs. 12,28,000/-by way of cheque. As such, the assessee was required to disclose source of payment of remaining sale consideration and stamp duty charges, total amounting to Rs. 92,700/-, as submitted by Learned DR. But having regard to the income of the assessee during the last 3 years, and the income of the year under consideration as shown in the ITR, it cannot be said that payment of this much amount remained unexplained. As is established from the documentary evidence, which was also made available before the AO and Learned CIT(A), we find that said addition also deserves to be set aside.

Summary

Issues:
Challenging order of ld. CIT(A) for Assessment Year 2017-18; Addition under section 69 for undisclosed investments; Capacity to make payments; Validity of impugned assessment order.

Analysis:
The appeal was filed challenging the order passed by the ld. CIT(A) for Assessment Year 2017-18. The Assessing Officer framed an assessment due to undisclosed investments found during a search at the assessee's residence and business premises. Two additions were made under section 69 of the Income Tax Act, one for Rs. 12,70,000 and the other for Rs. 1,76,000. The first addition was related to the purchase of a property and the second addition was due to deposits made in the husband's account. The appellant contended that based on her income declarations in previous years, she had the capacity to make the payments, and thus, the additions should be set aside. The Assessing Officer found discrepancies in the source of funds for the payments made, leading to the additions. The appellant provided explanations supported by documentary evidence, including loan confirmations and statements, to justify the sources of funds. The Tribunal found that the additions were not adequately supported by the evidence and ordered them to be set aside.

The appellant also raised additional grounds during the appeal, questioning the validity of the assessment order. These grounds included the absence of a DIN number, lack of digital signature, and failure to obtain prior approval as mandated by the Act. However, the Tribunal did not address these additional grounds as the main assessment order was already set aside based on the primary issues raised. No other arguments were presented, and the appeal was allowed, setting aside the impugned order and assessment. The Tribunal concluded the proceedings by pronouncing the order in open court on a specified date.