Income Tax : This guide explains when penalties can be imposed under various provisions of the Income-tax Act, 1961. It also outlines the appli...
Income Tax : This guide explains how unexplained cash credits under Section 68 and related provisions can attract steep taxation under Section ...
Income Tax : The Tribunal held that cash deposits during demonetisation cannot be treated as unexplained when backed by audited books, invoices...
Income Tax : ITAT Bangalore held that profit cannot be estimated arbitrarily when regular books of account are maintained and not rejected unde...
Income Tax : A large spousal gift exemption was denied due to failure in proving genuineness, creditworthiness, and source of funds. The ruling...
Income Tax : ITAT Kolkata deleted the Section 68 addition, holding that share application money already assessed in subscribers' hands cannot b...
Income Tax : Calcutta HC dismissed the Revenue's appeal after the remand report confirmed the disputed receipt was sale proceeds of investments...
Income Tax : ITAT Delhi held Section 68 cannot apply to sale proceeds of disclosed investments already recorded in books. Revenue's appeals wer...
Income Tax : ITAT Delhi held Section 68 inapplicable where shares were disclosed in an earlier year and sale proceeds were already offered as i...
Income Tax : ITAT Agra held Section 44AD could not apply where turnover exceeded the limit, adopted past profit history, allowed telescoping an...
Income Tax : CBDT has instructed tax officers to uniformly apply Sections 68 to 69D and Section 115BBE after a C&AG audit found inconsistencies...
Income Tax : Assessing Officers should follow the sequence as noted below for applying provisions of section 68 of the Act: Step 1: Whether the...
In the present case, the income tax return of the donor namely Dr. Chitranjan Jain and his wife Nisha Jain was filed before the Assessing Authority. No finding has been recorded by Assessing Authority or the CIT Appeal or the ITAT that return filed by Dr. Chitranjan Jain and the Nisha Jain were fake, fabricated or false one. Once genuineness of return is not in dispute then there appears to be no reason to disbelieve that the amount was paid by Dr. Chitranjan Jain.
The Tribunal recorded findings that the assessee had produced the return of income filed by the relevant shareholders who had paid share application money. The assessee had also produced the confirmation of share holders indicating the details of addresses, PAN and particulars of cheques through which the amount was paid towards the share application money.
Assessee had produced relevant evidence before the CIT (Appeals) establishing that all the persons, who had deposited the share application, were not fictitious persons. Most of them were identifiable; they made the payment by cheques and most of them were assessed to Income-tax. The Tribunal has given further relief to the assessee and has not accepted the argument of the department that the explanation furnished by the assessee for the addition under Section 69 on account of unexplained investment was not to the satisfaction of the Assessing Officer.
It had held that the assess was in possession of the shares in question and had sold the said shares in course of ordinary transaction of sale of shares at stock exchange and if the broker did not file any evidence since the same were seized by the Revenue Department, there is no fault with the assessee. From the aforesaid facts it is clear that the shares in question were allotted to the assessee in the public issue which were held in demat a/c of Stock Holding Corporation of India Ltd. The shares were transferred to Abhipra Capital Ltd. The sale consideration was received by demand draft. Therefore, the transaction in question cannot be said to be fake and is a genuine transaction.
In this case, AO, made an addition of Rs.28,00,000/-, in respect of advances received from M/s Jot Agro Processors Pvt. Ltd. at Rs. 25 lacs and M/s Madura Agro Food Industries at Rs. 3 lacs/-. The main addition made by the AO pertains to non-furnishing of PAN and bank account number. However, in the course of appellate proceedings, appellant filed detailed submission which was found plausible explanation within the meaning of provisions of Section 68 and having regard to the factual matrix of the case.
According to the Tribunal, was a condition precedent for making a reference to the DVO. The Tribunal also held that, in any event, the DVO’s report was based on incomparable sales and, therefore, could not be relied upon. The Tribunal also held that the burden was on the revenue to show that the real investment in the said properties was greater than the apparent investment, as disclosed by the respondent/assessee. The Tribunal held, on facts, that the said burden had not been discharged by the revenue. Consequently, the Tribunal held in favour of the assessee and against the revenue and found that the reference to the DVO itself was not in accordance with law.
There was a clear lack of inquiry on the part of the assessing officer once the assessee had furnished all the material which we have already referred to above. In such an eventuality no addition can be made under section 68 of the Act.
A perusal of the order of the Tribunal shows that it has gone on the basis of the documents submitted by the assessee before the AO and has held that in the light of those documents, it can be said that the assessee has established the identity of the parties. It has further been observed that the report of the investigation wing cannot conclusively prove that the assessee’s own monies were brought back in the form of share application money. As noted in the earlier paragraph, it is not the burden of the AO to prove that connection.
It is not in dispute that the aforesaid two amounts have been deposited by the two partners in their capital account. The partners are income tax payee. They have explained the source as having received gift from various persons, who have also filed their Income Tax Returns and have been assessed accordingly. Merely because, the donors are weavers and they own only one loom would not make any difference. They have filed their Income Tax Returns and have also filed the return under the Gift Tax Act. They have paid the gift tax also. Assessment under the Gift Tax Act has also been made, though the assessments made were summary in nature. In the case of Anil Rice Mills (supra), this Court has held that the assessee can not be asked to prove the source of source or the origin of origin.
We find from the order of Ld. Commissioner of Income Tax (Appeals) and the argument of the assessee that if the addition is confirmed, if any trading result should be allowed to be set off against unaccounted income of Rs. 1,90,000/- introduced in garb of guess deposits. The Ld. Commissioner of Income Tax (Appeals) has upheld the addition of Rs. 75,916/-. Therefore, telescoping effect of this addition was allowed.
