Kunhi Raman Vs ITO (ITAT Bangalore)
Liquor Licence in Father’s Name, Business in Son’s Hands –Income Taxable in Son’s Case-Double Taxation Avoided: Bang ITAT
The appeal was filed against the Order of CIT(A)/NFAC which had upheld addition of Rs.20,67,056 as business income, computed @10% of liquor purchases of Rs.2,06,70,598 from Karnataka State Beverages Corporation Ltd. (KSBCL).
AO had treated the purchases in the name of Assessee as his own, since the liquor licence stood in his name, & estimated profits @10% of such turnover. Assessee contended that while licence was in his name, the business was actually carried on by his son, Manoj Kumar, proprietor of Yashraj Bar & Restaurant, who had disclosed turnover & profits in his own return, supported by audited accounts u/s 44AB. Purchases were recorded in son’s books, payments were made from his bank account, & KSBCL ledger confirmed the transactions at Yashraj Bar’s address.
CIT(A) rejected these explanations, but before Tribunal, Assessee produced documentary evidence including son’s audited statements, bank ledgers, & KSBCL confirmation. Tribunal observed that income is taxable in the hands of the person who has earned it. Since Manoj Kumar had already disclosed these purchases & income, assessed separately by ITO Ward–1(4), Mangalore, addition in Assessee’s hands would amount to double taxation.
