2008 (2) TMI 477 - AT - Income Tax

Tribunal Dismisses Revenue's Appeals, Partially Allows Assessee's Appeal

Suresh Chandra Bhansali. Versus Joint Commissioner Of Income-tax.

The case involved cross-appeals regarding additions under section 68 of the Income Tax Act for the assessment year 2001-02. The Tribunal ruled in favor of ... Cash Credits Issues:1. Addition under section 68 of the Income Tax Act.2. Disputed cash receipts and transactions related to shares.3. Addition on account of liaison commission, salary, telephone expenses, etc.4. Dismissal of certain grounds based on previous Tribunal order.5. Levy of interest.Issue 1: Addition under section 68 of the Income Tax Act:The case involved cross-appeals by the assessee and the Revenue regarding an addition of Rs. 15,97,334 under section 68 of the Income Tax Act for the assessment year 2001-02. The assessee initially agreed to surrender Rs. 10 lakhs during a survey but did not declare it in the income tax return. The Assessing Officer (AO) ignored the surrender and made the addition based on the merits of the case. The Tribunal noted that the surrender was retracted by the assessee and not acted upon by the Revenue, thus making it liable to be ignored. The Tribunal proceeded to analyze the applicability of section 68 on the merits, focusing on specific cash receipts and transactions.Issue 2: Disputed cash receipts and transactions related to shares:The Tribunal examined the first creditor, Smt. Yashoda Maheshwari, on whose account an addition of Rs. 3,25,900 was made under section 68. Detailed account transactions showed cash and cheque receipts related to share transactions. The Tribunal highlighted that the AO had not disputed the purchase and sale transactions of shares, nor the brokerage earned by the assessee. It was argued that the Revenue could not selectively add only cash receipts under section 68 while accepting other aspects of the transactions. The Tribunal found the addition unjustified and ordered its deletion, emphasizing the totality of facts and the doctrine of approbate and reprobate.Issue 3: Addition on account of liaison commission, salary, telephone expenses, etc.:Grounds 6 and 7 of the assessee's appeal, along with Revenue's grounds, dealt with additions related to liaison commission, salary, telephone expenses, and other costs. Both sides agreed that these grounds mirrored the previous year's issues, which had been decided by the Tribunal. The Tribunal, based on previous rulings, dismissed the grounds raised by both the assessee and the Revenue.Issue 4: Dismissal of certain grounds based on previous Tribunal order:The Tribunal referenced a previous order related to similar issues in the preceding year, where the Tribunal had made decisions that were applicable to the current case. Both parties accepted the implications of the previous order, leading to the dismissal of relevant grounds in the present appeal.Issue 5: Levy of interest:Remaining grounds of the assessee's appeal concerning the levy of interest were deemed consequential and disposed of accordingly. The Tribunal partly allowed the assessee's appeal and dismissed the Revenue's appeal in the final decision.