Vishal Dilip Palani Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that investment made in gold ornaments was duly recorded in the books of accounts and also reflected in the block of assets. Hence, such investment cannot be stated to be remained unexplained.
Facts-
The assessment was completed by AO by making disallowance of freight charges u/s 40(a)(ia) for the alleged failure of assessee to deduct TDS; unexplained cash deposit found to be made in the bank account; unexplained unsecured loans; unexplained investment in gold.
CIT(A) confirmed the CIT(A) confirmed the disallowance made by AO on account of freight charges under Section 40(a)(ia) of Income Tax Act 1961 as well as the addition made on account of unexplained investment in gold. Being aggrieved, the present appeal is filed.
Conclusion-
Based on the judgement of Dilip C. Palany, disallowance u/s 40(a)(ia) of the Income Tax Act was deleted.
Held that the investment made by the assessee in gold ornaments was duly recorded in the books of account of the assessee regularly maintained inasmuch as the same was duly reflected in the block of assets as noted by the authorities below. In our opinion, it therefore cannot be said that the source of the said investment, which was duly recorded in the books of account, had remained unexplained. Moreover, no deduction even on account of depreciation was claimed by the assessee in respect of the investment made in gold ornaments and this being so, we are of the view that no addition can be made on account of gold ornaments even if the details and documents such as bills/vouchers are not produced by the assessee in support of the purchase of gold ornaments. We, therefore, delete the addition made by the Assessing Officer and confirmed by the learned CIT(A) on this issue.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals)-XV, Ahmedabad [“CIT(A) in short]” dated 04.02.2013.
2. At the outset, it is noted that there is a delay of 357 days on the part of the assessee in filing the appeal before the Tribunal. In this regard, the assessee has filed an affidavit giving details of the deteriorating health of his father as well as financial problems faced during the relevant period which resulted in the said delay. Keeping in view the same, we are satisfied that there was a sufficient cause for the delay of 357 days on the part of the assessee in filing the appeal before the Tribunal. The learned Departmental Representative has not raised any objection in this regard. We, therefore, condone the said delay and proceed to dispose of the appeal of the assessee on merit.
3. The assessee, in the present case, is an individual who is engaged in transportation business. The return of income for the year under consideration was filed by him on 30.09.2009 declaring a total income of Rs.4,54,720/-. The case of the assessee was selected for scrutiny and a notice under Section 143(2) of the Income-tax Act, 1961 (“the Act” in short) was issued by the Assessing Officer to the assessee on 25.08.2010. Thereafter, the assessment under Section 143(3) of the Act was completed by the Assessing Officer vide an order dated 05.12.2011 determining the total income of the assessee at Rs.3,49,14,986/- after making, inter alia, the following additions/disallowances:-
