High Court confirms Tribunal decision on Rs. 64,000 & Rs. 3,00,000 additions
Aggarwal Steel Traders Versus Commissioner of Income Tax
Aggarwal Steel Traders Versus Commissioner of Income Tax - [2001] 250 ITR 738, 159 CTR 13, 109 TAXMANN 283
Issues Involved: Appeal u/s 260A of the Income-tax Act, 1961 against the Tribunal's order. Questions of law: 1. Addition u/s 40A(3) of Rs. 64,000. 2. Addition of Rs. 3,00,000.
Issue 1 - Addition u/s 40A(3) of Rs. 64,000:The assessee filed its return for the assessment year 1981-82, declaring income of Rs. 41,380. An addition of Rs. 6,08,578 was made due to alleged bogus purchases. Additionally, four payments totaling Rs. 1,42,749 were disputed under section 40A(3) but not separately added. The CIT(A) deleted the addition for bogus purchases but restored the issue of payments under section 40A(3) for reassessment. The Assessing Officer, after issuing a notice u/s 148, added Rs. 1,42,749 and Rs. 3 lakhs to the total income. The Commissioner of Income-tax (Appeals) deleted the Rs. 3 lakhs addition, stating the Assessing Officer exceeded jurisdiction. The Tribunal upheld the Rs. 64,000 addition under section 40A(3) as the assessee failed to provide confirmatory letters from concerned parties as required by Circular No. 220.
Issue 2 - Addition of Rs. 3,00,000:The assessee filed a revised return offering Rs. 3 lakhs under an amnesty scheme. The Commissioner of Income-tax (Appeals) deleted this addition, stating the Assessing Officer should have considered it during the appeal proceedings. The Tribunal, however, reinstated the Rs. 3 lakhs addition, as the return was filed under the amnesty scheme and the Assessing Officer was obligated to accept and tax the additional income. The Tribunal's decision was in line with the scheme's provisions for regularizing returns and adding disclosed income.
In conclusion, the High Court upheld the Tribunal's decision on both issues, confirming the addition of Rs. 64,000 under section 40A(3) and the Rs. 3,00,000 addition under the amnesty scheme. The appeal was dismissed.
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