×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
11-09-2019, Verma Service Station, Section 68, 131, 69, Tribunal Agra
This appeal by the assessee is directed against the order dated 29.12.2017 passed by the Commissioner of Income Tax (Appeals)-2, in respect of A.Y. 2009- 10 wherein the assessee has raised the following grounds of appeal:
1. Because Ld. Commissioner of Income Tax (Appeals) hereinafter referred to as Ld. CIT (A) grossly erred both in law and on facts in sustaining addition of Rs. 92,00,000/- being the deposit made by the partners despite necessary evidence already on record. The appellant having proved identity, genuineness and creditworthiness of both the partners, the addition sustained by the Ld. CIT (A) is wholly arbitrary, illegal and in utter disregard to the established judicial principles laid down by the various courts including jurisdictional High Court.
2. Because the Ld. CIT(A) was wholly unjustified in examining source of source. The examination of source of source in respect of deposit, particularly from partners, is contrary to authoritative judicial pronouncements.
3. Because the order is against the law & facts.
4. Because the appellant craves leave to alter/ modify grounds before or at the time of hearing of the appeal.
2. In the present case, return of income for the A.Y. 2009-10 was filed on 29.09.2009 declaring total income of Rs. 4,86,270/-. Subsequently, the case was taken up for scrutiny under CASS and the assessment was completed at a total income of Rs.1,01,55,498/-. In the process of making additions, the AO disallowed a sum of Rs 92,00,000/- unexplained capital of the partner of the firm and that in the assessment order the appellant conceded for the addition. The AO also disallowed interest of Rs.2,85,984/- and Rs.1,83,248/- for which, it was stated that the authorized representative of the assessee conceded.
3. In the first round of appeal, ITAT, Agra Bench, Agra Vide ITA No. 189/Agra/2011 dated 12.08.2015 has restored the matter back to AO holding that since the additions are based on the confession of the counsel of the assessee without investigation the facts, AO should make the assessment again after affording due opportunity to the assessee where the Ld. CIT(A)-II, dismissed the appeal in limine by holding that no appeal is maintainable since the assessment order was passedon the confession of the assessee.
4. In the 2nd round of assessment,the assessee again could not explain the source of capital introduction of Rs.92,00,000/- and hence the same was again treated as unaccounted income of the assessee under section 68 and added to the total income of the assessee.
5. Aggrieved by such addition in total income of the assessee, assesses has filed this appeal before CIT(A) -II, Agra in 2nd round where she has after going through the affidavit of both the partners regarding source of receipts of deposits and written submissions filed by the assessee confirmed the addition of Rs.92,00,000/- unexplained capital introduction by observing as follows:
5.3 I have gone through the assessment order, submissions of the assessee and legal position in this regard. It is seen that the two partners Sri Naveen Chandra Verma & Smt. Bharti Verma have deposited Rs.65,00,000/- and Rs.27,00,000/- in cash. It was explained that this cash has been received against advance for sale of land in individual hands. During the course of assessment proceedings AO has specifically asked for the evidence of holding of land, agreement with the purchasers and date / mode / source of receipts. However, the assessee could not furnish any details before the assessing officer, it was further seen that AO has issue summons dated 10.05.2016 for attendance on 18.05.2016 and thereafter, on 14,07.2016 and 23.08.2016 but no compliance to any summons was made and no documents in support of contention that these amounts are received from sale of land were filed.
5.4 During the course of appellate proceedings assessee was again asked that the partner should be produced with all these documentary proofs for receipt of cash against advance for sale of land. However, during the appellate proceedings also could not file any evidence regarding cash received against advance as also the partners were not produced to give their statement. In this connection, emphasis on production of the partners during appellate proceedings was made as before the ITAT, the counsel of the assessee has accepted that these are unaccounted income in the hands of the assessee but it was held that the confession of the counsel of the assessee is not valid in law and the case has been set aside to the file of the Assessing Officer.
5.5 In this connection, in the case of Venus Auto which is a sister company of the assessee, it is seen that in the A.Y. 2009-10 that is the same assessment year the transactions that were explained by the assessee before the AO were that the M/s Venus Auto has transferred