Case Law Details
Smt. Bhavana Jain, Prop. M/s Akash Metal Vs ITO (ITAT Delhi)
The assessee’s explanation with regard to interest in the loose sheet i.e. blue diary found during the course of search was that it was for the purpose of memory and the addition could not have been made solely on the basis of loose paper which is against the well settled law in this regard. Moreover, the entire alleged receipt could not partake character of profit. The profit element embedded into such receipt could be subjected to tax. There is no ambiguity under law that no addition can be made merely on the basis of loose paper without being substantiated by any corroborative evidence. In the present case, undisputedly, one of the entries of Rs.75,000/- was found to be duly recorded in the books of accounts, therefore, I am in the agreement with the contention of the learned DR that such figures found on loose sheet could not be imaginary. The moot question arises whether the entire receipt is correctly taxed or only the profit element should have been taxed. Admittedly, the AO has not invoked section 69/69A of the Act. Therefore, I am of the considered view that only profit element should have been taxed. I, therefore, direct the AO to restrict the addition of Rs. 1,91,750/- @ 10% of the gross receipts. This ground of assessee’s appeal is partly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal filed by the assessee is directed against the order of the learned CIT(A)-5, Ludhiana, dated 18.04.2019 pertaining to Assessment Year 2013-14. The assessee has raised following grounds of appeal:-
1. On the facts and in the circumstances of the case and in law the Ld. CIT (Appeals) erred in initiating proceedings u/s 147/148 of the Income Tax Act, 1961 without there being valid reasons leading to belief of escapement of income and also passing order u/s 143(3) r.w.s. 147 of the Act without providing reasons recorded;
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