2008 (8) TMI 603 - AT - Income Tax

ITAT allows assessee's and revenue's appeals in assessment years 1993-94 and 1994-95

The ITAT allowed the assessee's appeals and the revenue's appeals in a case involving cross-appeals against a CIT (Appeals) order for assessment years ... Additions to income Issues involved: Cross-appeals against common order of learned CIT (Appeals) for assessment years 1993-94 and 1994-95 regarding addition of Rs. 10 lakhs, deletion of additions of Rs. 59,316 and Rs. 3,80,296, and reopening of assessment.Reopening of Assessment:The assessee filed an application under Voluntary Disclosure of Income Scheme, 1997 declaring undisclosed income of Rs. 10 lakhs for each assessment year. However, as tax was not paid, the Assessing Officer issued a notice u/s 148 and framed the assessment u/s 147 read with section 143(3) determining taxable income at Rs. 10 lakhs for each year. The ITAT upheld the reopening of assessment but set aside the issue for further evidence collection by the Assessing Officer.Evidence and Additions:The Assessing Officer directed the assessee to provide bank account details and books of account. The assessee failed to substantiate the source of deposits of Rs. 59,316 and Rs. 3,80,296 in the bank account, claiming they were received from a partnership concern. The Assessing Officer made additions based on these deposits, determining taxable income accordingly.Appeals and Decision:The CIT (Appeals) confirmed the addition of Rs. 10 lakhs for each year, citing the assessee's admission. However, the additions of Rs. 59,316 and Rs. 3,80,296 were deleted, considering the VDIS declaration. The ITAT allowed the assessee's appeals, emphasizing the lack of conclusive evidence of income. The revenue's appeals were also allowed, confirming the additions based on the bank deposits.Conclusion:The ITAT held that the retracted declaration alone cannot be conclusive proof of income chargeable to tax. The Assessing Officer failed to gather corroborative evidence and solely relied on the declaration. Without sufficient evidence, the additions were deemed unjustified. Therefore, the appeals of the assessee were allowed, and the revenue's appeals were also allowed upon deletion of the primary additions.