INCOME TAX OFFICER, WARD-1, DAVANAGERE vs. SRI K V AMARNATH, DAVANAGERE

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ITA 2822/BANG/2017Status: DisposedITAT Bangalore07 February 2020AY 2012-132 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that once receipts are admitted as proper and exceed payments, the source of payments stands explained. Since the impounded material itself explained the payments, the addition made by the AO was unjustified.

What were the facts?

The Assessing Officer (AO) made an addition to the assessee's income on account of unexplained payments. The assessee argued that these payments were explained by various receipts from third parties, as evidenced by impounded material. The impounded material showed receipts exceeding payments.

What were the issues?

Whether payments made by the assessee were unexplained, despite evidence of corresponding receipts from third parties in impounded material.

AI-generated summary — verify with the full judgment below

receipts are not accepted as proper and the receipts are more than payments, the AO would have made addition on the basis of the receipts and not on the basis of the payment. Once the receipts are admitted as proper and the receipts are more than payments, source of payments stands explained and no addition is justified regarding those alleged explained payments. The remaining payments to Shri. Balaji of Rs.6 lakhs, Shri. Vijayakumar Rs.32 lakhs, Shri. Virupakshappa Rs.13.50 lakhs are also after various receipts from Shri. Nabhiraj, Shri. Kantappa and Shri. Neelakantappa and hence, all the payments are having explained sources as per the impounded material itself and since, this is the only objection of the AO as per the Assessment Order that the payments are unexplained, the addition made by the AO has no legs to stand because such payments are explained by the impounded material itself as per which, the receipts of Rs.258.50 lakhs is shown in the impounded materials which is more than the payments shown in the impounded material and since, no addition is made by the AO regarding the receipts shown in the impounded material which implies that these receipts are accepted by the AO as properly explained. Under these facts, we find no reason to interfere in the order of CIT(A).

7.

In the result, Revenue’s appeal is dismissed.

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