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Facts
The Revenue appealed against a CIT(A) order for AY 2010-11, where the AO had made additions under Section 144/145(3) of the Income Tax Act. The assessee claimed inability to furnish books due to a 'Bharat Band' but later provided them to the AO during remand proceedings. The CIT(A) noted the assessee's consistent income from export sales and other sources, accepted in prior and subsequent years, and that the AO found no material discrepancies in the books during remand.
Held
The Tribunal upheld the CIT(A)'s findings, observing that a subsequent year's assessment was completed on returned income and that the AO's remand report showed only minor discrepancies without material issues in the assessee's voucher-supported books. Specifically, a Rs. 30 lakh addition was proven by the assessee as land sale proceeds with un-rebutted sale deeds. Consequently, the Tribunal found no grounds to interfere with the CIT(A)'s order.
Key Issues
The Revenue challenged the CIT(A)'s deletion of additions made by the AO under Section 144/145(3) concerning 10% of gross export sales, 100% of income from other sources, 100% of interest income (26AS), 100% of cash receipts treated as income, and unexplained investment in fixed assets, alleging that the assessee avoided substantiating claims.
Sections Cited
Section 144 of the Income Tax Act, 1961, Section 145(3) of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH ‘F’ : NEW DELHI
Before: SH. G.S.PANNU, HON’BLE & SH. ANUBHAV SHARMA
The appeal has been preferred by the Revenue against order dated 31.01.2018 in appeal no. 14/17-18/240/14-15 for assessment year 2010-11 passed by Commissioner of Income Tax (Appeals)-31, New Delhi (hereinafter referred to as the First Appellate Authority in short ‘Ld. F.A.A.’) in appeal against assessment order dated 01.03.2013 u/s 144 of the Income Tax Act, 1961 passed by ITO, Ward-15(3), New Delhi (hereinafter referred to as the Assessing Officer ‘AO’).
Rashi Wears Pvt. Ltd. 2 2. The Revenue is in appeal raising following grounds ; “ Revised Grounds of Appeal On the facts and circumstances of the case, Ld. CIT(A) 1. has erred in law in deleting the addition made u/s 144 of the Income Tax Act, 1961 on account of 10% of the gross export sales amounting to Rs. 7,99,20,517/- ignoring that the assessee company deliberately avoided the opportunities provided by the AO to substantiate its claims and the additions were made after recording proper satisfaction and rejecting the books of accounts u/s 145(3) of the Act by the AO. On the facts and circumstances of the case, Ld. CIT(A) 2. has erred in law in deleting the addition made u/s 144 of the Income Tax Act, 1961 on account of 100% of income from other sources amounting to Rs. 1,79,88,432/- ignoring that the assessee company deliberately avoided the opportunities provided by the AO to substantiate its claims and the additions were made after recording proper satisfaction and rejecting the books of accounts u/s 145(3) of the Act by the AO. On the facts and circumstances of the case, Ld.CIT(A) 3. has erred in law in deleting the addition made u/s 144 of the Income Tax Act, 1961 on account of 100% of interest income as per form 26AS amounting to Rs. 3,59,946/- ignoring that the assessee company deliberately avoided the opportunities provided by the AO to substantiate its claims and the additions were made after recording proper satisfaction and rejecting the books of accounts u/s 145(3) of the Act by the AO. On the facts and circumstances of the case, Ld. CIT(A) 4. has erred in law in deleting the addition made u/s 144 of the Income Tax Act, 1961 on account of 100% of cash receipts treated as income of other sources amounting to Rs. 30,00,000/- ignoring that the assessee company deliberately avoided the opportunities provided by the AO to substantiate its claims and the additions were made after recording proper satisfaction and rejecting the books of accounts u/s 145(3) of the Act by the AO.
Rashi Wears Pvt. Ltd. 3 On the facts and circumstances of the case, Ld.
5. CIT (A) has erred in law in deleting the addition made u/s 144 of the Income Tax Act, 1961 on account of unexplained investment in-fixed assets amounting to Rs. 22,500/- ignoring that the assessee company deliberately avoided the opportunities provided by the AO to substantiate its claims and the additions were made after recording proper satisfaction and rejecting the books of accounts u/s 145(3) of the Act by the AO. The appellant craves to be allowed to add and alter any 6. fresh ground(s) of appeal and/or delete or amend any of the ground(s) of appeal.”
Heard and perused the record. Ld. DR has substantiated the grounds by asserting the facts therein while Ld. AR relied the order of ld. CIT(A).
After giving thoughtful consideration to the matter on record, we are of the considered view that it is appropriate case to give a composite finding on the grounds as raised.
The facts in brief are that the case of assessee was selected for scrutiny and the AO determined the income of assessee u/s 144 of the Act. The assessee contended before Ld. CIT(A) that on various occasions, the assessee had appeared before AO and provided necessary details however, the books of accounts could not be furnished on 20.02.2013 due to Bharat Band. The Ld. CIT(A) had called for remand report which was submitted by the AO, after examining the books of accounts. Considering the same the Ld. CIT(A) observed that the assessee has been historically and successfully showing income from export sales and income from other sources such as duty draw backs etc. These sources of income were duly accepted in the earlier years and in the subsequent years also.
Rashi Wears Pvt. Ltd. 4 6. Then Ld. CIT(A) took into consideration the fact that the assessment for A.Y. 2011-12 was completed on the returned income. Ld. CIT(A) has taken into consideration the remand report and observed that apart from citing minor discrepancies the ld. AO could not point out anything material in the books of accounts, which were supported by vouchers and duly examined by ld. AO in the remand proceedings.
As with regard to Rs. 30 lakhs addition on the basis of 100% cash receipts treated as income from other sources the assessee had established in the remand proceedings that the same was by way of sale proceeds of the land and the copies of the sale deeds were filed before AO in remand proceedings and AO did not point anything in remand report for rebuttal.