AHMAD HUSSAIN KHAN,MIRZAPUR vs. ITO, MIRZAPUR

ITA 544/ALLD/2014Status: DisposedITAT Allahabad11 November 2021AY 2009-10130 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal partly allowed the appeal. Regarding the addition of Rs. 21,82,000 on account of cash deposited in bank accounts, the Tribunal noted that the credit of Rs. 3,00,000 deposited on 12.07.2008 was already allowed while deciding ground of appeal No. 7. The Tribunal found that the credit of cash deposited on 06.08.2008 and 17.10.2008 in the same bank account was available to the appellant up to an amount of Rs. (21,82,000 - 3,00,000) = Rs. 18,82,000. The Tribunal held that the entire balance amount of investment in DLF Commercial Complex and M/s Rohtas Project Ltd amounting to Rs. 16,00,484, out of cash deposited in the Kotak Mahindra Bank Ltd account of the appellant, is treated as explained, and no addition is called for on this account. Consequently, the addition on account of unexplained investment in DLF Commercial Complex and M/s Rohtas Project Ltd made by the AO was reduced from Rs. 7,50,000 to Rs. 1,76,800, granting the appellant relief of Rs. 5,73,200. The Tribunal also directed the AO to recompute interest under Sections 234A, 234B, and 234C.

What were the facts?

The assessee, Mrs. Shaheen Khan, legal heir of Late Mr. Ahmad Hussain Khan, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order dated 31.07.2014 passed by the Commissioner of Income Tax (Appeals) (CIT(A)). This order confirmed an addition of Rs. 21,82,000 as unexplained cash credit. The assessment year in question is 2009-10. The original assessment order dated 19.12.2011 was passed by the Assessing Officer (AO) under Section 143(3) of the Income-tax Act, 1961. The assessee claimed to have received Rs. 24,00,000 as advance for the sale of a flat from M/s Avtar Chemist, out of which Rs. 21,82,000 was deposited in bank accounts, and the balance was used for household expenses. The AO and CIT(A) had discarded the evidence provided by the assessee.

What were the issues?

1. Whether the CIT(A) was justified in confirming the addition of Rs. 21,82,000 as unexplained cash credit on irrelevant considerations and surmises, contrary to the facts and circumstances of the case? The assessee argued that they had received Rs. 24,00,000 as advance for a flat sale from M/s Avtar Chemist, supported by an agreement to sell. They contended that the AO and CIT(A) discarded various documents and evidence without plausible reason, drawing adverse inferences based on surmises. The assessee further argued that M/s Avtar Chemist had confirmed the payment, produced books of account, and explained the source of funds, which were duly verified. They also claimed that the partners of M/s Avtar Chemist arranged the funds by obtaining unsecured loans from well-wishers and that once the partners contributed the money, they were not required to prove the source to source. The assessee asserted that the identity, capacity, and genuineness of the transaction were established. Additionally, the assessee argued that Section 68 of the Act was not applicable as they did not maintain books of account, and a bank passbook is not considered a book of account. The revenue's contentions are not explicitly detailed in the provided text, but their stance was to uphold the addition made by the AO and confirmed by the CIT(A).

Which sections of the Income-tax Act were involved?

Section 143(3),Section 143(1),Section 143(2),Section 142(1),Section 131,Section 133(6),Section 68,Section 234A,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ALLAHABAD BENCH, ALLAHABAD

Before: SHRIVIJAY PAL RAO & SHRI RAMIT KOCHAR

Hearing: 04.08Pronounced: 11.11.2021

PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER:

This appeal, filed by assessee, being ITA No.544/Alld./2014, is directed against an appellate order dated 31.07.2014in Appeal No.31/ITO/R- 3(1)/MZP/11-12 passed by learnedCommissioner of Income Tax (Appeals), Allahabad (hereinafter called "theCIT(A)"),for assessment year(ay):2009-10, the appellate proceedingshad arisen before learned CIT(A)from assessment order Assessment Year: 2009-10 Mrs. Shaheen Khan Legal heir of LateMr.Ahmad Hussain Khan, Mirzapur

dated 19th December, 2011 passed by learned Assessing Officer (hereinafter called "the AO") under Section 143(3) of t

The order continues below.

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