DCIT Vs Agya Ram Manohar Lal (ITAT Chandigarh)
Facts- The brief facts of the case for AY 2016- 17 are that the assessee firm derives income from business and income from other sources. The assessee firm belongs to M/s Roop Square Group of companies where a search and seizure operation u/s 132(1) was conducted on 01.11.2017 at various business and residential premises of the group. Subsequently, in response to notice issued u/s 153A of the Act, the return for AY 2016-17 was filed declaring an income of Rs. 7,67,200/-. Thereafter, the assessment was completed in terms of provisions of section 153A r.w.s. 143(3) of the Act at an income of Rs. 1,43,00850/- after making various additions alleging unexplained expenditure, undisclosed investment, concealed net profit and unexplained investment.
CIT(A) partly allowed the appeal and accordingly the appellant approached the Tribunal.
Conclusion- Therefore, it is our considered view that even if there had to be an addition on account of some concealed profit, the AO would have to lead evidence to establish earning of such concealed profit and this kind of addition cannot be made on mere surmises. In our view, the AO has not adopted a correct approach in tabulating such alleged concealed profit and such approach cannot be approved by us.
Further held that the impugned investment had been made by different co-owners in their individual names, beyond the block period and there was no link or connection with the investment made by the partnership concern i.e. the assessee”. It is noted that “there is no dispute about the fact that the impugned investment related to the property purchased by individuals acting in their individual capacity and that the assessee firm had no connection with the same. Therefore, we find ourselves in agreement with the findings of the Ld. CIT (A) as reproduced above, that no addition could be made in the hands of the assessee firm u/s 69 of the Act as unaccounted investment during assessment year under consideration”.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
The captioned appeals have been preferred by the Revenue/Assessee against the separate orders of Ld. Commissioner of Income Tax (Appeals)-5, Ludhiana [CIT (A)] as per the details given below:-
