SMT. SARLA SETHIA,ALIPURDUAR vs. ITO, WARD - 1(4), JALPAIGURI, JALPAIGURI

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ITA 1679/KOL/2018Status: DisposedITAT Kolkata18 March 2019AY 2013-143 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The tribunal agreed with the Revenue that the peak credit represents unexplained seed capital or investment, which is correctly added in addition to the profit on turnover. Therefore, the addition made by the Assessing Officer was upheld.

What were the facts?

The assessee's appeal was filed with a delay of 28 days, which was condoned by the tribunal. The core issue was whether the Assessing Officer was justified in adding Rs. 4,56,522 as peak credit to the total receipts, which were already taxed under Section 44AD.

What were the issues?

Whether the addition of peak credit as unexplained investment is justified when the total receipts were already taxed under Section 44AD.

Which sections of the Income-tax Act were involved?

Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy]

Date of concluding the hearing : March 11th, 2019 Date of pronouncing the order : March 15th, 2019 O R D E R Per J. Sudhakar Reddy :-

This appeal filed by the assesse is directed against the order of the ld. Commissioner of Income Tax (Appeals) - Jalpaiguri, Kolkata, (hereinafter the ‘ld. CIT (A)’), passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 03/05/2018, for the Assessment Year 2013-14.

2.

Before me, this appeal was filed with a delay of 28 days and the assessee filed an affidavit stating reasons. On perusal of the said facts and hearing both the parties, we find the reasons stated therein are bonafide and, therefore, the delay of 28 days in filing of the appeal are condoned and the appeal is admitted.

3.

The short point for consideration is whether the Assessing Officer was right in adding the amount of Rs.4,56,522/-, as peak credit when the total receipts in the bank account were treated as turnover and taxed u/s 44AD of the Act. The ld. Counsel for the assessee submits that the opening balance in the bank account is around Rs.2,00,000/- and hence the capital invested should be restricted to this amount.

Assessment Year: 2013-14 Smt. Saria Sethia 3.1. The ld. D/R submits that peak credit is the investment made by the assessee which remained unexplained and hence the addition was correct.

4.

We agree with the submissions of the ld. D/R. In addition to the profit on turnover, the seed capital or investment, is correctly added. The peak credit is taken as the seed capital. In my view there is no error in the same. Accordingly this appeal of the assessee is dismissed.

5.

In the result, appeal of the assessee is dismissed.

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