×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.
Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-7, Ahmedabad dated 1.2.2016 passed for the Asstt.Year 2012-13.
2. Though the assessee has taken four grounds of appeal, which contained sub-grounds also, but grievance of the assessee revolves around a single issue viz. the ld.CIT(A) has erred in confirming addition of Rs.43,93,100/- which was added by the AO with the aid of section 69 of the Income Tax Act on account of cash deposited in the bank account which remained unexplained.
3. Brief facts of the case are that the assessee has filed its return of income electronically on 30.3.2013 declaring NIL income. This return was revised on 24.9.2013 declaring loss of (-) Rs.22,955/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. On scrutiny of the accounts it revealed to the AO that the assessee was maintaining a bank account bearing no.980439892 with Indian Bank, Ashram Road, Ahmedabad. It has deposited a sum of Rs.43,93,100/- in cash during the period 1.4.2011 to 22.12.2011. Bifurcation of this amount has been given in the submissions of the assessee, which has been reproduced by the ld.CIT(A) on page no.4. It contained date of deposits and exact amount deposited by the assessee. It also contained deposits in the names of depositors. In the first two transactions amounting to Rs.10,000/- and Rs.11,000/- it was
disclosed that these amounts deposited out of the cash on hand. The rest were alleged to have been deposited after receiving from M.B. Investment and M.B. Corporation. The ld.AO directed the assessee to explain the nature of transaction and source of deposits. In response to the query of the AO, it was contended by the assessee that the company wanted to sell shares of Hynoop Food & Oil Indus ries to M.B. Investment and M.B. Corporation. They have paid cash of Rs.43,93,100/- in advance and the same was deposited in the bank account with Indian Bank. M/s. Hynoop Food & Oil Industries was a sick industry declared by BIFR, and therefore, it could not sell the shares. The amount was refunded to M.B. Investments and M.B. Corporation. The AO directed the assessee to submit accounts of M.B. Corporation and M.V. Investments; confirmation from these sources saying that they have sufficient cash balance, out of which such deposits were made. These evidences could not be submitted by the assessee, hence, the ld.AO treated the deposits in the bank account as unexplained investment, and made addition under section 69 of the Act. Dissatisfied with the assessment order, the assessee carried the matter in appeal before the ld.First Appellate Authority. According to the assessee, it has raised additional grounds of appeal, vide which it has pleaded that sister concern, Hytisun Magnetics Ltd. (“HML” for short) sold property at a price below government jantri rate and difference of money was received in cash which was utilized by the company for depositing in its bank account. For buttressing this issue, the assessee company sought to file additional evidence under Rule 46A of the Income Tax Rules, 1962. Basically it sought to file computation of income made in the case of HML wherein sale consideration disclosed in the sale deed at Rs.2,50,00,000/- was recognized for the purpose of section 50C at Rs.7,58,79,556/-. The ld.CIT(A) has considered this issue, but did not find merit in the contentions of the assessee for admitting additional evidence as well as for entertaining new plea The discussion made by the ld.CIT(A) reads as under:
“5.2 During the appellate proceedings, the appellant submitted an application for admission of additional evidence under Rule 46A of I. T. Rules. It was submitted by the appellant that the impugned addition made on account of cash deposits in the appellant's account was from its sister concern Hytisun Magnetics Ltd. (HML) which had received cash on sale of land and building owned by it. It was submitted by the appellant that documents in respect of this
transaction was not produced before the AO since HML had closed down in 1998 and the appellant could not procure copies of the same.
5.2.1 CBDT framed rule 46A in the Income tax Rules, 1962 w.e.f 1.4.1993. Under the said rule, CIT(A) was permitted to admit fresh evidence only under the following circumstances