2015 (8) TMI 917 - AT - Income Tax

Tribunal upholds CIT(A)'s decision in tax dispute, dismisses Revenue's appeal, except for minor adjustment. (A)

The Tribunal upheld the Commissioner of Income Tax (Appeals) [CIT(A)]'s decisions to delete additions made by the Assessing Officer (AO) in a tax dispute. ... Unaccounted Cash deposits in Saving Bank account in the name of assessee and his brother - CIT(A) deleted the addition - Held that:- CIT(A) has held that no addition is called for, as the amount deposited in the joint bank account is agricultural income earned by the assessee. The ld. CIT(A) has also observed in his order that even after completion of the assessment, independent enquiry was also conducted in respect of receipt from the agriculture produces by the then Assessing Officer through an Inspector. Having taken note of all these facts, the ld. CIT(A) has deleted the addition. During the course of hearing, the ld. D. R. has simply placed reliance upon the order of the Assessing Officer and no defect was pointed out in the order of the ld. CIT(A). We, however, have carefully examined the order of the ld. CIT(A) and we find that the ld. CIT(A) has adjudicated the issue in the right perspective in the light of detailed evidence filed by the assessee. - Decided in favour of assessee. Addition made on account of difference of amount of difference of amount between the share profit from various firms shown in the return of income and copy of accounts - CIT(A) deleted the addition - Held that:- The difference of ₹ 9,15,044/- was duly explained by the assessee even before the Assessing Officer, but it was not accepted by him whereas the ld. CIT(A) has examined the difference in the light of explanations of the assessee and being convinced with it the addition was deleted. The ld. D. R. has not pointed out any infirmity in the order of the ld. CIT(A). Moreover, the ld. CIT(A) has taken cognizance of the correct facts while deleting the addition. Since we find no infirmity therein, we confirm his order on this issue. - Decided in favour of assessee. Deduction under section 24 - CIT(A) deleted the addition - Held that:- As before the AO the issue was with regard to the income from house property, as the assessee has claimed deduction under section 24 of the Act. The assessee was having two properties and one property was self-occupied and ALV was to be computed for another property on which according to the Assessing Officer rent was of ₹ 18,000/- per month and by applying the same, ALV was worked out at ₹ 2.16 lakhs and after allowing standard deduction, interest and borrowed capital as claimed by the assessee, the income from house property was computed to be at ₹ 1,200/-. The Assessing Officer has made addition of the same, but while deleting the same the ld. CIT(A) has given a relief of ₹ 1,51,200/- in which we do not find any merit. We accordingly set aside the findings of the ld. CIT(A) in this regard. However, the difference was of only of ₹ 1,200/- on the basis of the estimation of ALV by the Assessing Officer, therefore, this addition is also deserves to be deleted being nominal addition. Accordingly we delete the same. This issue is accordingly disposed of.- Decided in favour of assessee. Issues Involved:1. Deletion of addition of Rs. 39,31,550/- made on account of cash deposits in the Saving Bank account.2. Deletion of addition of Rs. 9,15,044/- made on account of the difference between the share profit from various firms shown in the return of income and copy of accounts.3. Deletion of addition of Rs. 1,51,200/- made on account of income from house property under section 23 of the Income Tax Act, 1961.Detailed Analysis:Issue 1: Deletion of Addition of Rs. 39,31,550/- Made on Account of Cash Deposits in Saving Bank AccountDuring the assessment proceedings, the Assessing Officer (AO) noticed cash credit entries of Rs. 39,31,550/- in a joint SB account held by the assessee and his brother. The AO required the assessee to furnish the source of these cash credits. The assessee explained that the deposits were from the sale proceeds of Mango Orchard and other crops, substantiating this claim with Khasra and Khatauni documents and auction papers. However, the AO doubted the authenticity of these auction papers and treated the entire deposit as unexplained cash credit.The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who re-examined the issue, considering additional documents and reports from the Udhyan Adhikari and Tehsildar. The CIT(A) found that the agricultural income was genuine and that the AO had not justified treating the entire deposit as the assessee's income. The CIT(A) observed that the income disclosed was consistent with historical trends and deleted the addition of Rs. 39,31,550/-.The Revenue appealed to the Tribunal, but the Tribunal confirmed the CIT(A)'s order, noting that the AO had not provided any material to justify the entire deposit as belonging solely to the assessee. The Tribunal found no infirmity in the CIT(A)'s detailed evaluation and upheld the deletion of the addition.Issue 2: Deletion of Addition of Rs. 9,15,044/- Made on Account of Difference in Share ProfitThe AO noticed a discrepancy between the profit from firms shown in the assessee's return of income (Rs. 29,80,754/-) and the profit shown in the capital account (Rs. 20,65,710.14). The AO treated the difference of Rs. 9,15,044/- as unexplained cash credit under section 68 of the Act, not accepting the assessee's explanation that the difference was due to the firm's taxes.The assessee appealed to the CIT(A), who found that the provisions of section 68 were not applicable as the assessee did not maintain books of accounts and balance sheets. The CIT(A) verified the figures from the audit reports and final accounts of the firms and concluded that the addition was not justified, granting relief of Rs. 9,15,044/-.The Revenue appealed to the Tribunal, which upheld the CIT(A)'s order. The Tribunal noted that the difference was adequately explained and that the CIT(A) had correctly deleted the addition, finding no infirmity in the CIT(A)'s decision.Issue 3: Deletion of Addition of Rs. 1,51,200/- Made on Account of Income from House PropertyThe AO added Rs. 1,200/- as income from house property, considering one of the assessee's properties as self-occupied and computing the Annual Letting Value (ALV) for the other property at Rs. 2.16 lakhs. After standard deductions and interest on borrowed capital, the AO made a nominal addition of Rs. 1,200/-.The assessee appealed to the CIT(A), who found that the property in question had not been delivered to the assessee and thus could not be considered for ALV computation. The CIT(A) granted relief of Rs. 1,51,200/-.The Revenue appealed to the Tribunal, arguing that the CIT(A) had given relief based on different facts. The Tribunal noted that the issue before the AO was only the nominal addition of Rs. 1,200/-. The Tribunal found no merit in the CIT(A)'s different finding and set aside the CIT(A)'s order. However, considering the nominal nature of the addition, the Tribunal deleted the addition of Rs. 1,200/-.Conclusion:The Tribunal dismissed the appeal of the Revenue, confirming the CIT(A)'s deletions of additions on all issues, with a minor adjustment on the house property income issue. The Tribunal found the CIT(A)'s evaluations thorough and justified, affirming the reliefs granted to the assessee.