AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2012 (10) TMI 1045
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....(Appeals) I, Bangalore, to the extent prejudicial to the appellant, is bad in law and liable to be quashed. 2.1 The learned Commissioner of Income tax (Appeals) I, Bangalore has erred in solely relying on the information contained in Annual information return (AIR) in the process of sustaining the additions to income returned to the extent of Rs. 21,00,000/-. On facts and in the circumstances of the case and law applicable, the information contained in the AIR being incorrect and not applicable to the appellant, the addition made to income returned amounting to Rs. 2 1,00,000/- is bad in law and liable to be deleted. 3.1 The learned Commissioner of Income tax (Appeals) I, Bangalore has erred in confirming the levy of surcharge in comp....
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....R obtained by the Assessing Officer, the assessee made investments to the extent of Q 25 lakhs. The details of investment made by the assessee as revealed by the AIR were as follows:- Birla Sunlife Mutual Fund 5,50,000 Franklin Templeton Mutual Fund 7,00,000 Franklin Templeton Mutual Fund 5,50,000 Birla Sunlife Mutual Fund 7,00,000 25,00,000 4. As far as the aforesaid investments are concerned, it is not in dispute that the assessee was able to explain the sources of making investments in the aforesaid funds. The AO was also satisfied with the assessee's explanation. 5. Apart from the above, the AIR information also revealed the following investments by the assessee:- REGISTRAR TO ISSUE OF SHARES & DEBENTURES 1.....
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....r - ITA No.868/Bang/2010 A.Y. 2006- 07, wherein the Tribunal had taken the view that when the AIR shows some investment and the assessee denies it, no addition can be made on account of unexplained investments without further evidence to show that the assessee made investments. The assessee also submitted that the information contained in the AIR is a guideline for the Officer based on which the Officer can initiate enquiries and that under no circumstances can AIR be considered as absolute document to conclude the assessment. 8. On the above submissions by the assessee, the ld. CIT(A) held as follows:- "8. I completely agree with the above inference of the AR quoted in Para 7. In fact by denying so the assessee shifted the burden to the....
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....lakhs iii. 12-03-2008 Shares 7 lakhs iv. 12-06-2008 Mutual Funds 5 lakhs Total 26 lakhs The above shows that Sl.No. (iv) does not pertain to this A.Y. 2007-08. Hence the addition is restricted to Rs. 21 lakhs. Appellant gets relief of Rs. 5 lakhs." 9. Aggrieved by the order of the CIT(Appeals) in sustaining the addition to the extent of Q 21 lakhs, the assessee has preferred the present appeal before the Tribunal. 10. We have heard the submissions of the ld. counsel for the assesse who reiterated stand of the Assessee as put forth before CIT(A) besides relying on some judicial precedents. The ld. DR relied on the order of the CIT(Appeals). 11. We have considered the rival submissions. The AIR o....
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....w that the assessee made investments. The AIR which is the only basis on which the AO has proceeded to make the impugned addition is not conclusive as to the factum of the assessee having made investments. In this regard, the ld. counsel for the assessee has also filed before us the Frequently Asked Questions & Answers on AIR brought out by the Income Tax Department. In answer to question 38 as to under what circumstances the AIR will not be accepted, one of the answers given by the department is that mismatch of name of filer mentioned in Form 68A with AIR file but no document submitted in support of name appearing on Form 61A (Part A). Further, the press release dated 26.10.2006 brings out the CBDT Guidelines for dealing with the grievanc....
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....ve will be equally applicable to this addition also. 16. One more investment which requires to be considered is investment of Rs. 7 lakhs stated to have been made on 10.03.2008 by the assessee in mutual funds by cash. As already stated, the AIR lacks any information with regard to the mutual funds as well as the scheme in which the investments are made. It was brought to our notice by the ld. counsel for the assessee that as per SEBI Guidelines issued on 30.09.2002 to Mutual Funds (copy placed at page 31 of the compilation filed by the assessee), mutual funds are debarred from accepting cash applications for investment in funds. On 13.09.2012, the SEBI has issued a Circular in which it has carved out an exception to the above rule by permi....