TaxTMI 
TaxTMI 
2024 (3) TMI 1431
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.... from Savings A/c. to Current A/c. which is not accepted by the Ld. CIT(A). [2] The Ld. CIT (A) was grievously erred in confirming the addition made by the Ld. A.O. of Rs. 16,800/- being the difference in transportation expenses in previous year AY 2016-2017 and there was a mistake in the opening balance and therefore the addition made as increase in capital is illegal. [3] The Ld. A.O. has initiated the penalty proceedings u/s. 271AAC is likely to be withdrawn looking to the merits of the case. [5] The appellant therefore requests your Honour to kindly delete the above mentioned additions made by the Ld. A.O. which were confirmed by the Ld. CIT (A) looking to the merits of the case. [6] The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal." 3. Succinctly, the fact as culled out from the records is that return of income declaring total income of Rs. 10,32,850/- was e-filed by the assessee on 30.10.2017 which was processed u/s 143(1). Subsequently the case was selected for scrutiny under CASS, accordingly, notice u/s. 143(....
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....putation the agriculture income added for rate purpose. So the one income is added as unexplained u/s 68A thrice times and taxed at 115BBE and show cause notice issued on 28.12.2019 by giving 1 day opportunity and 29th December is Sunday so it assessed to high pitch assessment. It is understood from the Assessment Order that during the course of assessment, the AO has observed that the appellant has declared income from agricultural activity. For examination of the claim of agricultural income, the AO called for the details and accordingly the details were submitted. It was the observation of the AO that during the previous years i.e. 2014-15 and 2015-16 there were no agricultural income declared by the appellant and the bills produced in support of the sale of agricultural produce were not continuously numbered. Few of the bills were shown as estimates instead of showing it as sale bill. Further it was the AO's claim that the appellant is the holder of small piece of land out of which it was not possible to earn Rs. 26,00,000/-. In view of these observations the AO did not accept the claim of the appellant and brought to tax the agricultural income under the head....
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....clusion that as there was sufficient cash balance available with the appellant there was no need to take unsecured loan from various parties. Therefore was of the opinion that the cash in hand was utilized for some other activities. Thus added a sum of Rs. 24,60,000/- made during the period 07/11/2018 to 08/11/2016. On the other hand the appellant has uploaded the bank statements including the statement of withdrawals for the month of November 2016. It was submitted that out of the cash earlier withdrawn and savings made, deposits have been made during demonetization period. The unsecured loans shown were nothing but the outstanding salary payable and no loan was taken as stated by the AO as unsecured loan. Therefore requested to consider the plea based on the documents uploaded and produced before the AO. The uploaded documents have been carefully examined and it is a fact that as stated by the AO there was a closing cash in hand balance of Rs. 32,01,318/- as on 20/10/2016. After making certain deposits and withdrawal, the closing cash balance as on hand on 3/11 / 2016 was Rs. 25,49,643/- which will cover the cash deposit made by the appellant duri....
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.... partner or the firm is required to show the payment along with the cheque number having transferred the funds from the personal savings bank account to the firm's Business bank account. Though the capital account has been uploaded, it does not clearly show the details of cheque and bank details for transfer of the funds. Therefore in the absence of clear clarity in the credit of the bank account, the source for the introduction of capital cannot be accepted as correctly explained. The AO at Para 5 of Page 19 of the assessment order as clearly and categorically given the finding that the sources for this credit have not been explained even during the course of assessment. Under the circumstances there must be a corresponding credit and debit entries maintained by the partners in the firm which has been proved by the appellant with material evidence. Therefore I am of the considered opinion that the AO has rightly made the addition of Rs. 18,45,000/-. Accordingly the ground raised is dismissed. Ground No. 4: There is a difference of Rs. 16,800 is the difference of transportation expense in PY 2015-16. There is mistake on taking the opening balance and hen....
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....ppellant is an individual and carried the proprietary business in the name of Krishna Agri Genetics. He is doing the agriculture activity year under consideration. He is dealing in the agriculture product trading of seeds like cistron seed, cumin seeds, mustard seeds and similar seeds items. 1.3. There is no new introduction of the capital as there is only transfer of amount from his saving account to current account and the revenue has erred in making addition of Rs 18,45,000/- which is unjustified and illogical. 1.4. The appellant submitted that there was no new capital introduced into the business. It is a agriculture Income which is transferred from his saving account to his business account i.e. Krishna Agri Genetics. 1.5. The appellant has maintained two separate books of accounts,one in the name of Krishna Agri Genetics and this account is bearing No. 1337 in Bank of Baroda and only trading activity operations are employed in this bank account. 1.6. The other bank account in Bank of Baroda bearing a/c No. 0261 is a saving account and only agricultural income employed in this account. On 27.03.2017 an amount of Rs 18,00,000/- was ....
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....11: Section 69A of the Income-tax Act, 1961 - Unexplained moneys - Assessment year 2006-07 - In course of assessment, Assessing Officer found that assesses had deposited certain amount in his bank account - Assesses explained that said deposits had been transferred from joint bank account of his parents in another bank - Assessing Officer rejected assesses explanation and added amount deposited to his income under section 69A - On appeal, Commissioner (Appeals) as well as Tribunal came to a categorical finding that amount was withdrawn from parents account and deposited in account of assesses solely to facilitate his immigration to Canada - They also took into consideration fact that assesses did migrate to Canada as confirmation of permanent resident was also placed before Commissioner (Appeals) - Accordingly, impugned addition made by Assessing Officer was deleted - Whether on facts, no substantial question of law arose for determination in background of case due to transfer of funds inter se between family members and, thus, revenue's appeal was to be dismissed - Held, yes in favour of assesses. 1.14 Your kind attention is also invited towards the decision ....
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.... 1.18 Even if the books of accounts were liable to be rejected as what has been done, in such a situation can the entire sale proceeds should be treated as income. Purchases are made, and even if the sales which are shown are not accepted, the recourse would be to estimate the sales and compute the net income. The gross profit is already accepted, and even if the profits were computed on the basis of such margin, the profits shown on the sales so made is already forming part of the total income, resulting into no addition on any ground. 1.19 In view of above facts of the case and in view of the judicial decisions, it is submitted that the addition made may kindly be deleted. 2. Re: Gr. No. 2: Charging of Income Tax u/s 115BBE: 2.1 It is respectfully submitted that though this ground was not specifically raised, but this is purely a legal ground and relates to charging of tax on the income assessed by the ld. AO. The said ground is part of the addition challenged. The ld. AO has erred in charging tax u/s 115BBE in relation to the addition made on undisclosed deposit in the bank account treating the same as undisclosed income chargeable to tax....
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....8, 69 etc. of the Act to create a deeming fiction to tax any sum already credited / offered as income. Such recourse is unwarranted; keeping in mind the objective to introduce Section 115BBE of the Act was to only curb the practice of laundering of unaccounted money by taking advantage of basic exemption limit. 2.6 In the case of the appellant the money deposited in the bank account is fully explained and on merits the said addition deserves to be deleted and if the said contention is accepted, consequently the charging of tax u/s 115BBE would also not get attracted. 2.7 Alternatively, even if the addition on account of deposit in the bank account is found be fully or partly sustainable, still the charging of tax u/s 115BBE would not be justified. The deemed income u/s 68 to 69D does not obliterates the classification of five heads of income u/s 14 in view of the saving clause u/s 14 and therefore deems these incomes in a classless manner irrespective of the fact that such deemed income could also possibly be in the nature of any one of five heads u/s 14. 2.8 When source of any item of cash/ asset/ entry, etc. remains unsubstantiated within the scope of p....
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.... and ambit of an amending legislation and its retrospectivity, every assesses has a vested right in substantive law but no such right exists in procedural law. 2.14 In the case at present, the increase in the tax rate as per section 115BBE is not a procedural change but substantive change which cannot be retrospective. Hon'ble Gujarat High Court in the case of Anil Kumar Gopikishan Agarwal v. ACIT [2019] 418 ITR 25 (Gujarat) observed in respect of the applicability of section 153C post amendment that "While it is true that section 153C is also a machinery provision for assessment of income of a person other than the person searched, in the opinion of this court, this is not a case where by virtue of the amendment, there is merely a change in the procedural provisions affecting the assesses who were covered by the unamended provision. By the amendment, a new class of assesses are sought to be brought within the sweep of section 153C, which affects the substantive rights of the assesses and cannot be said to be a mere change in the procedure. Since the amendment expands the scope of section 153C by bringing in an assesses if books of account or documents pertaining to him or....
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....s of Section 115BBE with a view that the tax has to be imposed @ 30% how it can be increased subsequently by burdening the assesses @ 60% plus surcharge. 2.16 The income chargeable under these sections get accrued on the date when the entries are made, assets are found, unaccounted investments are made or expenditure are incurred. The law as applicable on the date when the income accrues should be applicable and not as per the amended provision which is introduced after the income arise to the assesses. The Hon'ble Gujarat High Court in the case of CIT Vs. Nirmal Textiles [1997] 224 ITR 378 (Gujarat) considered the question as to whether the nature of capital asset (short term or long term) has to be determined in accordance with provisions of law as standing on date of transfer of asset and has held that, "Insofar as the first part of imposition of tax is concerned, namely, what persons in respect of what property are liable to pay tax is to be determined with reference to law as on the date of the occurrence of the event which creates or attracts the liability to tax, unless the statute by express or by necessary implication provides otherwise. In computing such....
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....id not in its return show the income by way of cash compensatory support. The Assessing Officer on that account levied additional income-tax. No additional tax would have been leviable on the cash compensatory support if the Finance Act, 1990 had not so provided even though retrospectively. The assesses could not have suffered additional tax but for the Finance Act, 1990. After it had filed its return of income, which was correct as per law on the date of filing of the return, it was thereafter that the cash compensatory support also came within the sway of section 28. When additional tax has imprint of penalty, the revenue cannot be heard saying that levy of additional tax is automatic under section 143(1A). If additional tax could be levied in such circumstances, it would be punishing the assesses for no fault of it. That cannot ever be the legislative intent. It shocks the very conscience if in the circumstances section 143(1A) could be invoked to levy the additional tax. In the circumstances of the case, levy of additional tax taking into account the income by way of cash compensatory support was not warranted. b. CIT v. Vatika Township (P.) Ltd. 367 ITR 466 (SC) ....
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....he commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence". 2.21 In tax law, if there is a penal provision, retrospectively is not permitted to that extent and in this regard attention is invited towards decision in the case of Star India (P) Ltd. Vs. Commissioner of Central Excise [2006] 280 ITR 321 (SC). In the said case, the assesses was made liable to pay service tax by a retrospective amendment brought in by the Finance Act, 2002 making agents like the assesses to pay service tax. Interest was levied by the revenue on the payment of the service tax. The question which arose was whether the liability to pay interest would only arise on default and is really in nature of a quasi-punishment and such liability although created retrospectively by amending Act, could not entail punishment of payment of interest with retrospective effect. The Hon'ble Apex Court held that, "It is well established that while it is permissible for the Legislature to retrospectively legislate, such retrospectively is normally not permissible to create....
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....al affairs on the basis of the law as it exists. Such retrospective taxation imposes an unjust and unwarranted accumulated burden on the assesses for no fault on his part and the assesses has to face unnecessarily without any just reason very serious financial and other problems. Imposition of any tax with retrospective effect for years which no such tax was there, cannot also be considered to be just and reasonable from the point of view of the Revenue. 2.24 The Hon'ble Rajasthan High Court in the case of Niharika Jain Vs. Union of India [2019] 107 taxmann.com 272 (Rajasthan) (Dated 12.07.2019) has observed as under with reference to the Benami Transactions (Prohibition) Amendment Act, 2016: - By now, it is well settled law that unless a contrary intention is reflected, a legislation is presumed and intended to be prospective. For in the normal course of human behaviour, one is entitled to arrange his affairs keeping in view the laws for the time being in force and such arrangement of affairs should not be dislodged by retrospective application of law. The principle of law known as lex prospicit non prospicit (law looks forward not backward), is a well-known and ....
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....o an Act. Further in the case of the appellant most of the deposits is much prior to the announcement made for demonetization. 2.26 In the case of Avani Exports Vs. CIT [2012] 348 ITR 391, the amendment made to section 80HHC of the Income Tax Act by the Taxation Laws (2nd Amendment) Act, 2005 was challenged to the extent of its retrospectively. The Hon'ble Gujarat High Court held that "although in a taxing statute laxity is permissible and a benefit already given to the assesses can be taken away or curtailed, that can be done only with prospective effect and not retrospectively. The Court noticed that a citizen has a right to arrange his business in a manner which accorded with the law and claim a benefit accordingly; the benefit cannot be taken away by law with retrospective effect by imposing a new condition which the citizen at that stage is incapable of complying, whereas if such promise (by the legislature) was not there, the citizen could have arranged his affairs in a different way to get the same or at least some part of the benefit." 2.27 The in-between amendment in the Act by the Second Amendment as on 15th December, 2016, resulted increased tax rate wh....
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....mmissioner of Income Tax, NFAC, Delhi 46-62 04 Ledger of BOB A/c No. 08490200001337 63-70 05 Bank Statement of Mr. Kishna Ram a/c no. 43280100000261 71-81 7. The ld. AR of the assessee from the paper book filed demonstrated before us that the assessee has transferred / credited the money in the proprietary concern sourced of which is from the saving bank account, where the income of the agricultural activity is credited. The addition of the agricultural activity deleted by the ld. CIT (A) but the consequential amount credited in the proprietary concern account was sustained is required to be deleted. 8. The ld DR is heard who has particularly relied upon the finding recorded orders in the lower authorities and as regards the addition of Rs. 18,45,000/- sustained by the ld. CIT (A) who has considered all the aspects of the matter argued by the assessee before ld. CIT (A) but the same does not find any merit and therefore, he prayed that the finding of ld. CIT (A) be sustained. 9. We have heard the rival contentions and perused the material placed on record. The bench noted the brief fact of the case related to the ground No. 1 is that the....