SK. ASRAF ALI,PASCHIM MEDINIPUR vs. JCIT, RANGE - 1, MIDNAPORE, PASCHIM MEDINIPUR

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ITA 1558/KOL/2018Status: DisposedITAT Kolkata16 January 2019AY 2011-123 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal deleted the addition of Rs. 1,65,000 by holding that the benefit of telescoping should be given. The excess cash flow from the business was to be considered against the investment, rendering the investment as explained.

What were the facts?

The assessee, a wholesale dealer in poultry feeds and vehicle hirer, declared an income of Rs. 1,78,950. The Assessing Officer made additions, including estimating poultry feed income at 8% of gross receipts and adding Rs. 1,65,000 for undisclosed investment. The CIT(A) upheld the AO's order.

What were the issues?

Whether the addition for undisclosed investment is valid when the income from business has been enhanced, and if the benefit of telescoping should be applied.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy

Appearances by: Shri P. K. Sanghi, CA, appeared on behalf of the Appellant. Shri Robin Choudhury, Addl. CIT, appeared on behalf of the Respondent. Date of concluding the hearing : January 9, 2019 Date of pronouncing the order : January 16 , 2019

ORDER Per J. Sudhakar Reddy :-

This appeal by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-11, (hereinafter the ‘ld. CIT(A)’), dated 27.04.2018 passed u/s 143(3) of the Income Tax Act, 1961 (the ‘Act’) for the assessment year 2011-12.

2.

The assessee is an individual and wholesale dealer in poultry feeds and earned income from hiring of vehicles. He filed return of income declaring Rs.1,78,950/-. The Assessing Officer assessed the total income at Rs.6,18,440/- whereby making an addition inter alia by assessing income from poultry feeds @8% of gross receipts and further making an addition of Rs.1,65,000/- on the ground that investment made was out of undisclosed sources.

2 SK ASRAF ALI Assessment Year: 2011-12 3. On appeal, the First Appellate Authority upheld the order of the Assessing Officer. 4. Aggrieved the assessee is before us. The first ground raised by the ld. Counsel for the assessee is that the Assessing Officer has not signed the assessment order and hence it is not valid. Secondly, he submitted that estimation of income @8% of the gross receipts from business of poultry feeds is excessive. The ld. DR submitted that the signed assessment order is in the records and the same can be produced before the Bench. The ld. Counsel for the assessee at this stage submitted that he does not press both these grounds.

5. The second ground of appeal reads as follows: After hearing rival contentions, we delete the addition by holding that telescoping benefit has to be given to the assessee. The income from business of poultry feeds has been computed at Rs.4,19,201/- as against Rs.1,78,950/- declared by the assessee. The excess cash flow is to be telescoped and the investment in question is to be held as unexplained. Hence, we delete the addition of Rs.1,65,000/-.

6. In the result, the Ground No.2 of the assessee is allowed.

7. In the result, the appeal of the assessee is allowed in part.

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