TaxTMI 
TaxTMI 
2018 (6) TMI 367
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....ts of the case. 2. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs. 2,10)000 made by the assessing officer u/s 69 of the Income Tax Act,1961 towards alleged unexplained amount of loans received by the appellant. 3. The learned Commissioner of Income Tax (Appeals) is not justified in confirming partly to the extent of Rs. 79,137 addition of Rs. 9,01,407 made by the assessing officer u/s 69A of the Income Tax Act,1961 towards alleged unexplained amount of income tax challans paid on behalf of the clients of the appellant. 4. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs. 13,400 made by the assessing officer under the head income from House Property'. 5. The learned Commissioner of Income fax (Appeals) is not justified in confirming the disallowance of Municipal Tax of Rs. 1433 claimed by the appellant against income from house property at Dabagardens, 6. The 'earned Commissioner of Income Tax (Appeals) is not justified in confirming the addition of Rs. 8,012 made by the assessing officer towards dividend on chits. 7. The learned Commissioner of Income Tax (Appea....
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....ms and conditions of the issue of notice. The assessee has complied with the notice and intent and purpose of issue of notice was served. The assessee has not raised any objection before the AO on receipt of the notice. The assessee did not make any protest for the minor defects in the said notice, such as non-striking off irrelevant columns in the said notice. No injustice or confusion was caused to the assessee by non striking of irrelevant columns. Therefore, we are of the opinion that having filed the return of income non- striking of irrelevant columns cannot render the notice as invalid. The Ld.AR relied on the decision of Hon'ble High Court of Allahabad in the case of Madan Lal Agarwal Vs. Commissioner of Income Tax (1983) 13 Taxman 0120. In the case relied up on by the assessee, on receipt of the notice u/s 148, the assessee filed the return of income in his individual capacity under protest. The Income Tax Officer informed the assessee that the notice u/s 148 dated 29.09.62 was related to HUF, hence he should file the return in the capacity of HUF. Subsequently, the AO completed the assessment in the capacity of HUF, hence the Hon'ble High Court held that reassessment made....
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....man 442 held that even if period for furnishing return of income was not specified in notice u/s 148, but assessee has participated in reassessment proceedings, such assessment is valid. Similarly Hon'ble Allahabad High Court in the case of CIT, Aligarh Vs. Shyam Cold Storage (31 taxmann.com 358) held that having participated in the reassessment proceedings without raising any objection, the assessment held to be valid. For the sake of clarity and convenience we extract the relevant part of the order of the Hon'ble High court hereunder: "8. Section 292B has been enacted with a view to overcome purely technical objection coming in the way of validity of assessment proceedings etc. It deals with curable defects in the proceedings. The idea is that when substantial justice is pitted against technicality cause of justice should prevail. No party can claim to have vested right in injustice being done because of some slip of pen, or omission causing no prejudice to anyone. The section is intended to ensure that an inconsequential technicality does not defeat justice. Nature of mistake will determine whether a return, order or proceeding is vitiated or not. 9. The existence of a vali....
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.... conditions of the notice. Having complied with the notice issued u/s 148, the intent and purpose of the notice issued was served and there is no injustice caused to the assessee. No material was placed to show that the assessee was misled in any manner for not specifically striking the irrelevant columns. Therefore, we hold that the notice issued by the AO is valid and the same is upheld. This ground is raised by the assessee for the A.Ys 2007-08 to 2010-11 on identical facts and the appeals of the assessee on this ground for the A.Ys 2007-08 to 2010-11 are dismissed. 7. Ground No.1 and 8 of original grounds filed along with appeal memo are general in nature which does not require specific adjudication. 8. During the appeal hearing, the Ld.AR did not press Ground Nos.4,5 and 6, hence ground Nos. 4,5 and 6 are dismissed as not pressed. 9. Ground No.2 is related to the addition of Rs. 2,10,000/- made by the AO u/s 69 of the Act towards unexplained amounts of loans received by the assessee. The assessee admitted that he has taken the loans of Rs. 2,10,000/- during the F.Y.2006-07 but not filed the proof and evidences. The AO has issued the notice u/s 143(2), but the assessee has n....
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....to the various assesses are ingenuine and not matching with the information in OLTAS. The department observed that such returns were filed by the assessee who happens to be income tax practitioner. The department has conducted enquiries with the Syndicate Bank and the counter foils furnished in the returns and the challans found to be fake challans. Therefore, a survey u/s 133A of the Act was conducted in the office premises of N.V.Vasantha Rao, the assessee. During the course of survey, rubber stamps of Syndicate Bank and the counterfoils of fake challans were found in the assessee's premises. The assessee in the statement dated 22.02.2012 has accepted the fact of collecting the money from the clients but not depositing the same in the Government account. Instead he used the money and issued the fake challan counter foils and has taken the sole responsibility for indulging in the fraudulent activity, in response to question No.7 of the statement. The AO quantified such amount at Rs. 9,01,407/- and requested the assessee to furnish year wise details but the assessee failed to furnish the details, hence, the AO made the addition of Rs. 9,01,407/- to the returned income u/s 69A of I.....
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....efore the Hon'ble Court stating that the said sums belonged to Government and if the department wins the case, the assessee is required to deposit the entire amount in the Govt. account in which case, the assessee would be in double jeopardy because he will have to remit the whole amount which is treated as his income. Therefore, argued that the department cannot be allowed to have both i.e. refund of the amount if it wins the case in the court of law and also tax the same as income. Alternatively, the Ld.AR submitted that the AO made the addition of Rs. 9,01,407/- out of which on reconciliation, a sum of Rs. 1,48,666/- was tallied with OLTAS. Therefore requested to reduce the amount of Rs. 1,48,666/- from various assessment years. 10.3 On the other hand, the Ld.DR supported the orders of the Ld.CIT(A). 10.4 We have heard both the parties and perused the material placed on record. In the instant case, the assessee has collected the sums from the clients in the name of tax and has not deposited the same to the Government account. This fact has been admitted by the assessee in the statement recorded by him by the AO. However, at the time of assessment, he denied having collected th....
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.... the same required to be taxed u/s 69A of I.T. act. In this case it is undisputed fact that money was belonged to the clients of the assessee and the assessee required to deposit in the Government account or to return the same to the clients. The money was received by the assessee in the fiduciary capacity on behalf of clients towards the payment of taxes, There is no evidence brought on record by the AO to establish that the right of recovery by the clients or by the Government has been waived. Therefore, we are of the considered opinion that the monies received by the assessee on behalf of the clients for payment of taxes to be treated as money belonged to the clients or belonged to the Income Tax Department and the same cannot be brought to tax as income in the hands of the assessee. Accordingly, we set aside the order of the CIT(A) and delete the addition made by the AO u/s 69A of I.T.Act. The appeals of the assessee for the A.Ys 2007-08 to 2011-12 are allowed on this ground. 11. Ground No.7 of the assessee is related to the addition of Rs. 33,975/- relating to the disallowance of depreciation. During the assessment proceedings, the AO found that the assessee has claimed the d....
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.....w.s.147 in the manner laid down u/s 144 of I.T.Act. Therefore, argued that the AO has rightly passed the assessment order u/s 143(3) r.w.s. 147 of the Act. Even otherwise, it is mere technical defect which cannot make the assessment invalid as per section 292B of the IT Act. 13.3 We have heard both the parties and perused the material placed on record. In this case, the AO had issued notice u/s 147 and in response to the notice issued, the assessee filed revised return of income. Subsequently, the AO issued notice u/s 143(2) calling for the information and the assessee responded to the notices issued u/s 143(2) seeking adjournments. The AO granted the adjournments as required by the assessee and the assessee continuously sought adjournments without furnishing the complete information. The AO has issued show cause notice proposing to make various additions and the assessee responded to the show cause notice and sought adjournment. In this case as observed from the assessment order the assessee filed partial information. Since, the required information is available with the AO and the assessee had responded to the issued notice u/s 143(2), the AO passed the order u/s 143(3) r.w.s. ....
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.... cause notice, and in the assessee's case the AO has issued show cause notice with proposed additions. Therefore, the facts of the case law relied upon by the Ld.AR are distinguishable and not applicable in the assessee's case. Further framing the assessment u/s 143(3) instead of 144 is mere technical error and curable mistake u/s 292B. Therefore, we uphold the assessment order u/s 143(3) r.w.s. 147 and dismiss the appeal of the assessee on this ground. 14.0. The next issue is addition on account of cash credit. For the assessment year 2008-09 to 2011-12, the assessee has introduced cash credits as per the details given below : 2008-09 Rs.2,23,760/- 2009-10 Rs.2,15,009/- 2010-11 Rs.4,49,600/- 2011-12 Rs.9,27,250/- During the assessment proceedings the assessee did not explain the sources in spite of giving repeated opportunities, , hence, the AO made the addition. 14.1. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and argued that the source of credit was the sale of agricultural land for the assessment year 2010-11. But the assessee failed to substantiate the claims before the CIT(A) also, thus the Ld.CIT(A) confirmed the addition. 14.....
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.....Ys 2008-09 to 2011-12. 16.0. Ground No.4 is related to the adhoc disallowance of expenditure. This issue is involved for the assessment year 2008-09 to 2011-12 as per the details given hereunder: Assessment Year Addition made 2008-09 34,316/- 2009-10 48,929/- 2010-11 55,200/- 2011-12 48,262/- 17.0. The AO disallowed 15% of expenditure on adhoc basis for want of details and on appeal the Ld.CIT(A) upheld the disallowance for assessee's failure to submit the explanation. 17.1. During the appeal hearing, the Ld.AR submitted that for the assessment year 2010-11, expenditure included chit loss of 84,424/- and argued that no estimated disallowance is called for on chit loss. Similarly he also argued that adhoc disallowance is made on depreciation also. Therefore, argued that relief may be granted on the depreciation and chit loss.On the other hand, the Ld.DR supported the orders of the lower authorities. 17.2 We have heard both the parties and perused the material placed on record. During the assessment proceedings, the assesee has not cooperated with the department and did not furnish the details of expenses incurred in connection with the expenditure debited to the Prof....
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....lared in the balance sheet as income. Before the Ld.CIT(A) also, the assessee did not submit any explanation, therefore, the addition was confirmed by the Ld.CIT(A). 19.1 Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us. During the appeal hearing, the assessee did not submit any explanation except stating that the actual value was of Rs. 50,535/-. In the instant case, the assessee has stated that the value of land was Rs. 1,60,000/- but admitted only Rs. 54,800/- in the Balance Sheet. The assessee filed sale deed dated 04.12.2007 which is registered before the Sub Registrar Office, Nellimarla and as per the sale deed, the actual consideration paid was Rs. 50,000/-. The AO has not brought on record any evidence to show that excess consideration was passed on in purchase of the land. When there is a registered document, the oral evidence cannot be taken into cognizance. It is settled law that the sale consideration in the registered sale deed is final and cannot be disturbed unless there is a tangible evidence to establish that the excess consideration has been passed on. The Coordinate Bench of ITAT, Hyderabad in the case of Chilukuri SRK Raju Vs. ITO, W....
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....to or subtracting from its terms. Therefore, it follows that no oral agreement contradicting/varying the terms of a document can be offered. Once the aforesaid principal is clear, then in the instant case, ostensible sale considerationdisclosed in the sale deed had to be accepted and it could not be contradicted by adducing any oral evidence. Therefore, the order of the Tribunal did not suffer from any legal infirmity in reaching to the conclusion that the amount shown in the registered sale deed was received by the vendors and deserved to be added to the gross income of the assessee. [Para 4]." In the instant case the sale deed was registered for Rs. 50000/- and no other evidence was brought on record by the AO to establish that the excess consideration was passed on to the vendor over and above the sale consideration recorded in the sale dee. Therefore, respectfully following the view taken by ITAT, Hyderabad, we hold that the consideration recorded in the sale deed is to be treated as final and accordingly, the addition made by the AO is unsustainable and the same is deleted. The appeal of the assessee on this ground is allowed. 20.0 Ground No.7 is related to the disallowance....