K SIDDALINGAPPA,DAVANGERE vs. INCOME TAX OFFICER WARD-2, DAVANGERE

PDF · subscribers
ITA 1955/BANG/2017Status: DisposedITAT Bangalore24 January 2018AY 2008-094 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal deleted the addition of Rs. 20,000 EMD, stating it should have been considered in AY 2007-08. For the Vijaya Cash Certificates, the principal amount was deleted from the current year's assessment, but the interest income was remanded to the AO for fresh adjudication after examining the HUF's claim.

What were the facts?

The assessee's appeal concerned additions made to his income for AY 2008-09, including an EMD of Rs. 20,000 and Rs. 13,76,116 related to Vijaya Cash Certificates. The assessee contended that these amounts pertained to a previous assessment year or belonged to his HUF.

What were the issues?

Whether amounts pertaining to a prior assessment year or belonging to an HUF can be added to an individual assessee's income in the current assessment year. The taxability of interest income declared by the HUF.

Which sections of the Income-tax Act were involved?

Section 234B

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “SMC-A” BENCH : BANGALORE

Before: SHRI ARUN KUMAR GARODIA

For Appellant: Shri R. Chandrasekhar, Advocate
For Respondent: Shri Vimal Anand, Addl. CIT (DR)
Hearing: 18.01.2018Pronounced: 24.01.2018

O R D E R

Per Shri A.K. Garodia, Accountant Member

1.

This appeal is filed by the assessee which is directed against the order of ld. CIT(A), Gulbarga dated 31.07.2017 for Assessment Year 2008-09.

2. The grounds raised

by the assessee are as under.

1. The Learned Commissioner of Income tax (Appeals) erred in confirming the sum of Rs.20,000/-, the EMD made in the assessment year 2007-2008 as income of the appellant for the assessment year 2008-2009.

2.

The Learned Commissioner of Income tax (Appeals) failed to appreciate that the said investment relates to the HUF and which has been declared there in.

3. The Learned Commissioner of Income tax (Appeals) erred in confirming the sum of Rs.13,76,116/- being the investment and accrual of the interest thereon in Vijaya Cash Certificates as income of the appellant for the assessment year 2008-2009.

4. The Learned Commissioner of Income tax (Appeals) failed to appreciate that the investment in Vijaya Cash Certificate is in the assessment year 2007-2008 and not relating to the assessment year in question. The Learned Commissioner of Income tax (Appeals) ought to have considered the bank statement filed by the appellant.

5. The Learned Commissioner of Income tax (Appeals) erred in upholding the investment in Reliance Mutual Fund payment made through Reliance Insurance Premium as investments of the appellant, rejecting the plea that the same relates to HUF.

6. The, Learned Commissioner of Income tax (Appeals) erred in upholding the levy of interest charged u/s.234B of the Act.

7. The decision of the Hon'ble Supreme Court rendered in Goetze India Vs. Commissioner of Income Tax (284 ITR 323) relied upon by the learned Commissioner of Income tax (Appeals) has no application to the facts of the case. The appellant pray leave of the Hon'ble Tribunal to add/modify/delete any other ground or grounds at the time of hearing.”

3.

Regarding ground no. 1, it was submitted by ld. AR of assessee that as per page no. 3 of the assessment order, there was opening balance of Rs. 3,16,249/- as on 01.04.2007 and out of that, the AO has made addition of Rs. 20,000/- in the present year. He submitted that even if any addition is required on this account, the same can be made in Assessment Year 2007-08 and not in the present year i.e. A. Y. 2008-09. He submitted that this argument was made before CIT(A) also but he decided this issue without considering this contention.

4.

Regarding ground no. 3, he submitted that the copy of relevant bank statement of Vijaya Bank for the present year is available on page no. 29 of the paper book and as per the same, the deposit of Rs. 12.50 Lakhs was made on 04.01.2007 and interest of Rs. 25,706/- was credited by bank as on 25.03.2007 and the closing balance as on 31.03.2007 is Rs. 12,75,706/- and in the present year, interest has been credited by bank on 23.03.2008 of Rs. 1,00,410/- and the total balance as on 31.03.2008 is Rs. 13,76,116/-. He submitted that this credit of interest as on 25.03.2008 is net of TDS of Rs. 11,530/- and the gross interest before TDS is Rs. 1,11,940/-. He submitted that this bank account is belonging to assessee’s HUF and this interest income was declared by the said HUF in its return of income for the present year filed on 22.09.2008 copy

available on page no. 27 of the paper book. The ld. DR of revenue supported the order of CIT(A).

5.

I have considered the rival submissions. Regarding ground no. 1 of the assessee’s appeal in which the issue involved is regarding the addition of Rs. 20,000/- being EMD, I find that in the assessment order, the AO has stated at page no. 3 that there was opening balance as on 01.04.2007 of Rs. 3,16,249/- and out of that opening balance, he made addition of Rs. 20,000/-. In my considered opinion, the said addition cannot be made in the present year and if the same has not been accounted by the assessee in the respective year i.e. 2007-08, the addition can be made as per law in that year but not in the present year. Hence I delete this addition. Ground no. 1 is allowed.

6.

The remaining grounds are in respect of addition of Rs. 13,76,116/- in respect of balance in Vijaya Bank. As per page no. 29 of the paper book being bank statement of Vijaya Bank, deposit of Rs. 12.50 Lakhs was made in Financial Year 2006-07 relevant to Assessment Year 2007-08 and interest of Rs. 25,706/- was also credited by bank in that year and the closing balance as on 31.03.2007 is Rs. 12,75,706/-. To this extent, no addition can be made in the present year by alleging that it is unexplained investment of the present year. To this extent, I delete the addition in the present year although the AO can make this addition in Assessment Year 2007-08 as per law if the assessee is not able to establish that this money is belonging to HUF and not to the assessee individual and the assessee is not able to explain the source of deposit. Regarding the interest credited in the present year of Rs. 1,00,410/- as on 23.03.2008, there is no dispute that this amount is income of the present year but as per the assessee, gross interest received from bank is of Rs. 1,11,940/- before because TDS was deducted of Rs. 11,530/- and the net is Rs. 1,00,410/- credited in the bank account of the assessee. This is also the contention of the assessee that this income was declared by the assessee in the return of income filed for the assessee’s HUF on 22.09.2008 copy of which is available on page no. 27 of the paper book. As per the same, it is seen that the gross total income declared is Rs. 1,11,940/- and the TDS is also claimed

at Rs. 11,530/- and on page no. 28 of the paper book is the intimation as per which the department has granted refund of Rs. 11,330/- against TDS of Rs. 11,530/-. But this aspect was not examined by the AO and CIT (A) and hence, I feel it proper to restore this matter back to the file of AO for fresh decision after examining this contention of the assessee that this account belongs to assessee’s HUF and the interest income of Rs. 1,11,940/- was declared and assessed in the hands of the HUF. If the contention of the assessee is found correct, no addition can be made in the present case being assessee individual. The AO should pass necessary order as per law after providing adequate opportunity of being heard to assessee.

7.

In the result, the appeal filed by the assessee stands allowed in the terms indicated above.

Order pronounced in the open court on the date mentioned on the caption page.

More judgments on Section 234B

All 10,214 judgments and leading authorities on Section 234B →

Recent GST High Court judgments

Search GST case law →