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04-09-2019, R. S. Shekarappa, Section 10(37), 234A, Tribunal Bangalore

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1 week 2 days ago #10702 by amit
Section - 10(37), 234A, 234B, 68, 132
Order Date - 04-09-2019
Favouring - Partly
Court - Tribunal Bangalore
Appellant - R. S. Shekarappa
Respondent - ITO
Justice - N. V. VASUDEVAN VP & JASON P. BOAZ AM
Citation - 919Taxpundit32
Appeal No. - ITA No.1123/Bang/2015
Asstt. Year - 2009-10

Order

PER : Jason P Boaz, A.M.

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), Davangere, dt.05.06.2015 for Assessment Year 2009-10.

2. Briefly stated, the facts of the case relevant for disposal of this appeal are as under:-

2.1 The assessee, an individual, filed his return of income for Assessment Year 2009-10 on 22.02.2010 declaring Nil Income. The Assessing Officer (AO) noticed that in the return of income, the assessee had shown Long Term Capital Gains (LTCG) of Rs.2,56,343/- which was entirely claimed as exempt under section 10(37) of the Income Tax Act, 1961 (in short ‘the Act’) in view of the compulsory acquisition of land by the National Highways Authority of India (NHAI). The case was selected for scrutiny for this Assessment Year and the assessment was concluded under section 143(3) of the Act vide order dated 29.12.2011, wherein the assessee’s income was determined at Rs.52,62,338/- in view of the following additions to the returned income :-

(i) Unproved sums payable - Rs.13,70,330/-
(ii) Interest income not offered to tax - Rs. 14,208/-
(iii) Rental income not offered to tax - Rs. 1,17,600/-
(iv) Unexplained investment in Chit Fund - Rs. 1,17,200/-
(v) Dividend income not offered to tax - Rs. 63,000/-
(vi) Unexplain d cash deposits - Rs.35,62,000/-

2.2 The assessee, being aggrieved by the order of assessment dated 29.12.2011, preferred an appeal before the CIT(A) – Davangere challenging the above additions made in respect of :-

a) unproved sums payable / liabilities of Rs.13,70,330/-
b) unexplained cash deposits of Rs.35,62,000/-
c) addition of dividend income of Rs. 63,000/-

The CIT(A) disposed off the appeal vide order dated 05.06.2015, allowing the assessee partial relief. He upheld the additions of Rs.35,62,000/- and Rs.63,000/- and sustained the addition on account of unproved liabilities to the extent of Rs.4,00,000/- out of the original addition of Rs.13,70,330/-.

3. Aggrieved by the order of the CIT(A), Davangere, dated 05.06.2015 for Assessment Year 2009-10, the assessee has preferred this appeal wherein he has raised the following grounds:-

1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

2. The learned CIT [A] is not justified in sustaining the following amounts aggregating to Rs. 4,00,000/- out of the original addition of Rs 13,70,330/-made as unproved creditors under the facts and in the circumstances of the appellant's case:-

[a] Sri Hanumanthappa Rs. 3,00,000/-
Sri R S Rakesh, S/o the appellant Rs. 1,00,000/-

3. The learned CIT[A] is not justified in sustaining the addition of Rs. 35,20,000/- considered as unexplained cash deposits made by the appellant under the facts and in the circumstances of the appellant's case.

4. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s. 234-A, 234-B and 234-C of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled.

5. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.

4. Ground Nos.1 and 5 (supra), being general in nature and not urged before us are dismissed as infructuous.

5. Ground No.4 – Charging of interest under section 234A, 234B and 234C of the Act

5.1 In this ground (supra), the assessee denies himself liable to be charged interest u/s 234A, 234B and 234C of the Act. The charging of interest is consequential and mandatory and the AO has no discretion in the matter. This proposition has been upheld by the Hon’ble Apex Court in the case of Anjum

H. Ghaswala (252 ITR 1) (SC) and we, therefore, uphold the action of the AO in charging the assessee the aforesaid interest u/s 234A, 234B and 234C of the Act. The AO is, however, directed to re-compute the interest chargeable u/s 234A, 234B and 234C of the Act if any, while giving effect of this order.

6. Ground No.2 – Unproved Liabilities / Creditors

6.1.1 In this ground (supra), the assessee assails the order of the CIT(A) in sustaining the following amounts aggregating to Rs.4,00,000/- as unproved creditors:-

[a] Sri Hanumanthappa Rs. 3,00,000/-

Sri R S Rakesh, S/o the appellant Rs. 1,00,000/-

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