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Facts
The assessee, engaged in the business of petrol and lubricants, filed a return of income for AY 2012-13. The Assessing Officer made additions regarding capital gains, commission income, disallowance of expenses, and unexplained cash deposits. The CIT(A) upheld these additions. The assessee appealed to the ITAT.
Held
The Tribunal restored the issue of cost of improvement for capital gains to the Assessing Officer for fresh adjudication after considering evidence. The issue of cash deposits was also restored to the Assessing Officer for verification. The ground regarding an addition for commission income was dismissed as not pressed. The ground regarding disallowance of business expenses was restored to the Assessing Officer for verification.
Key Issues
Whether the CIT(A) erred in upholding the additions/disallowances made by the AO, including those related to capital gains, cash deposits, and business expenses.
Sections Cited
69A
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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
This appeal by the assessee is directed against order dated 23.06.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2012-13, raising following grounds:
1. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing Officer in not allowing the interest cost, brokerage cost and civil construction work cost incurred by the appellant as 'Cost of Acquisition' while computing Capital Gains.
2. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing Officer in making addition of Rs. 4,04,000/- to total income u/s. 69A by Shri Amit Nagesh Shinde 2 ITA No. 2959/M/2023 wrongly considering the deposit of business cash receipts as unexplained wrongly considering the deposit of business cash receipts as wrongly considering the deposit of business cash receipts as investments.
3. In the facts and circumstances of the case and in law, the Ld. Commissioner 3. In the facts and circumstances of the case and in law, the Ld. Commissioner 3. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing Officer in making addition of Rs. 2,09,009/ Officer in making addition of Rs. 2,09,009/-, by wrongly considering the , by wrongly considering the same as undisclosed profit from cellular recharge commission business. as undisclosed profit from cellular recharge commission business. as undisclosed profit from cellular recharge commission business.
4. In the facts and circumstances of the case and in law, the Ld. Commissioner 4. In the facts and circumstances of the case and in law, the Ld. Commissioner 4. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing Officer in making addition Officer in making addition in respect of business expenses of Rs. 51,510/ in respect of business expenses of Rs. 51,510/- merely on surmises and conjectures on ad merely on surmises and conjectures on ad-hoc basis.
2. Briefly stated, facts of the case are that during relevant period Briefly stated, facts of the case are that during relevant period Briefly stated, facts of the case are that during relevant period the assessee was engaged in the business of dealer of petrol, the assessee was engaged in the business of dealer of petrol, the assessee was engaged in the business of dealer of petrol, lubricant and oil etc. through his proprietary concern M/s Om lubricant and oil etc. through his proprietary concern M/s Om lubricant and oil etc. through his proprietary concern M/s Om Shree Balaji Petroleum. For the year under consideration, the Shree Balaji Petroleum. For the year under consideration, the Shree Balaji Petroleum. For the year under consideration, the assessee filed return of income on 30.09.2012 declaring total ssee filed return of income on 30.09.2012 declaring total ssee filed return of income on 30.09.2012 declaring total income of Rs.15,06,250/ income of Rs.15,06,250/-. The return of income filed by the . The return of income filed by the assessee was selected for scrutiny and statutory notices under the assessee was selected for scrutiny and statutory notices under the assessee was selected for scrutiny and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued and complied tax Act, 1961 (in short ‘the Act’) were issued and complied tax Act, 1961 (in short ‘the Act’) were issued and complied with. In the assessment completed u/s 143 the assessment completed u/s 143(3) of the Act, the (3) of the Act, the Assessing Officer made addition/disallowance in respect of (i) Assessing Officer made addition/disallowance in respect of (i) Assessing Officer made addition/disallowance in respect of (i) addition on account of short term capital gain on sale of flats, (ii) addition on account of short term capital gain on sale of flats, (ii) addition on account of short term capital gain on sale of flats, (ii) addition on account of income from commission received from Idea addition on account of income from commission received from Idea addition on account of income from commission received from Idea Cellular Ltd., (iii) disallowance of Rs.51,510/ ellular Ltd., (iii) disallowance of Rs.51,510/- out of salary housekeeping and convenience housekeeping and convenience expenses etc. (iv) addition on etc. (iv) addition on account of cash deposit at Rs.4,04,000/ account of cash deposit at Rs.4,04,000/- in Janseva Sahakari Bank Janseva Sahakari Bank Ltd.
3. On further appeal before the Ld. CIT(A), the assessee could On further appeal before the Ld. CIT(A), the assessee could On further appeal before the Ld. CIT(A), the assessee could not succeed and hence being aggrieved, being aggrieved, is in appeal before the Income is in appeal before the Income-
Shri Amit Nagesh Shinde 3 ITA No. 2959/M/2023 tax Appellate Tribunal (in short ‘the Tribunal’) by way of raising tax Appellate Tribunal (in short ‘the Tribunal’) by way of raising tax Appellate Tribunal (in short ‘the Tribunal’) by way of raising grounds as reproduced above. grounds as reproduced above.
In ground No. 1, the assessee is aggrieved In ground No. 1, the assessee is aggrieved with with the deduction for cost of improvement of the f improvement of the flats and interest and brokerage lats and interest and brokerage, which has not been considered while computing the short term has not been considered while computing the short term has not been considered while computing the short term capital gain by the Assessing Officer. Before us, the Ld. counsel for capital gain by the Assessing Officer. Before us, the Ld. counsel capital gain by the Assessing Officer. Before us, the Ld. counsel the assessee submitted that all the details were filed before the Ld. the assessee submitted that all the details were filed before the Ld. the assessee submitted that all the details were filed before the Ld. CIT(A) in physical proceedings however, in faceless proceedings, the T(A) in physical proceedings however, in faceless proceedings, the T(A) in physical proceedings however, in faceless proceedings, the Ld. CIT(A) has not adjudicated the said claim of the assessee for Ld. CIT(A) has not adjudicated the said claim of the assessee for Ld. CIT(A) has not adjudicated the said claim of the assessee for considering the cost of improvement. considering the cost of improvement.
4.1 We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused dispute and perused the relevant material on record. We find that the relevant material on record. We find that before the Assessing Officer no details of cost of improvement the Assessing Officer no details of cost of improvement the Assessing Officer no details of cost of improvement ,interest and brokerage etc. were filed. Since, the Ld. CIT(A) has not interest and brokerage etc. were filed. Since, the Ld. CIT(A) has not interest and brokerage etc. were filed. Since, the Ld. CIT(A) has not adjudicated on such claim of the assessee adjudicated on such claim of the assessee ,therefore, we feel it therefore, we feel it appropriate to set aside the finding of the Ld. CIT(A) on the issue of e to set aside the finding of the Ld. CIT(A) on the issue of e to set aside the finding of the Ld. CIT(A) on the issue of short term capital gain and restore t term capital gain and restore the matter back to the file of the the matter back to the file of the Assessing Officer for deciding afresh after taking into consideration Assessing Officer for deciding afresh after taking into consideration Assessing Officer for deciding afresh after taking into consideration documentary evidence of the assessee for its claim for cost of documentary evidence of the assessee for its claim for documentary evidence of the assessee for its claim for improvement interest, brokerage etc. The ground No. 1 of the appeal improvement interest, brokerage etc. The ground No. 1 of the appeal improvement interest, brokerage etc. The ground No. 1 of the appeal of the assessee is accordingly allowed for statistical purposes. of the assessee is accordingly allowed for statistical purposes. of the assessee is accordingly allowed for statistical purposes.
In ground No. 2, the assessee is In ground No. 2, the assessee is aggrieved with the addition of with the addition of Rs.4,04,000/- towards cash deposits in bank acc towards cash deposits in bank account. Before the ount. Before the Shri Amit Nagesh Shinde 4 ITA No. 2959/M/2023 Assessing Officer, the assessee claimed that this amount was Assessing Officer, the assessee claimed that this amount was Assessing Officer, the assessee claimed that this amount was withdrawn from his capital capital account and deposited into account and deposited into saving bank account maintained with account maintained with the Janseva Sahakari Bank Ltd. on the Janseva Sahakari Bank Ltd. on 02.02.2011. However, the Assessing Officer rejected this contention 02.02.2011. However, the Assessing Officer rejected th 02.02.2011. However, the Assessing Officer rejected th of the assessee on the ground that in the capital account the of the assessee on the ground that in the capital account the of the assessee on the ground that in the capital account the assessee has already introduced Rs.7,47,957/ assessee has already introduced Rs.7,47,957/-. Before the Ld. . Before the Ld. CIT(A) in physical proceedings, the assessee given another CIT(A) in physical proceedings, the assessee given another CIT(A) in physical proceedings, the assessee given another explanation that said cash was out of receipt of the business of sale explanation that said cash was out of receipt of the busine explanation that said cash was out of receipt of the busine of petroleum product which were supposed to be deposited in of petroleum product which were supposed to be deposited in of petroleum product which were supposed to be deposited in current account of the assessee current account of the assessee but by mistake mistake , same was deposited into saving bank account of the assessee. This saving bank account of the assessee. This saving bank account of the assessee. This explanation of the assessee has not been considered in the faceless explanation of the assessee has not been considered in the faceless explanation of the assessee has not been considered in the faceless appellate proceedings. We are of the opinion that this claim has pellate proceedings. We are of the opinion that this claim has pellate proceedings. We are of the opinion that this claim has been made for the first time before the Ld. CIT(A) and it needs been made for the first time before the Ld. CIT(A) and it needs been made for the first time before the Ld. CIT(A) and it needs verification from the books of account including the cash book of verification from the books of account including the cash book of verification from the books of account including the cash book of the assessee whether corresponding sales are appearing in the the assessee whether corresponding sales are appearing in the the assessee whether corresponding sales are appearing in the books of account of the assessee and not deposited in current ooks of account of the assessee and not deposited in current ooks of account of the assessee and not deposited in current account. Therefore, we feel it appropriate to account. Therefore, we feel it appropriate to set-aside the finding of aside the finding of the ld CIT(A) and restore this issue also to file of the Assessing restore this issue also to file of the Assessing restore this issue also to file of the Assessing Officer for necessary verification Officer for necessary verification and deciding in accord in accordance with law.
The ground No. 3 of the appeal The ground No. 3 of the appeal, regarding addition of regarding addition of Rs.2,09,009/-, was not pressed before us on behalf of the assessee was not pressed before us on behalf of the assessee was not pressed before us on behalf of the assessee and therefore, same is dismissed as infructuous. and therefore, same is dismissed as infructuous.
Shri Amit Nagesh Shinde 5 ITA No. 2959/M/2023
In ground No. 4 of the appeal, the assessee is aggrieved with In ground No. 4 of the appeal, the assessee is aggrieved with In ground No. 4 of the appeal, the assessee is aggrieved with the disallowance of Rs.51,510/ he disallowance of Rs.51,510/- out of business expenses out of business expenses. Since the Ld. CIT(A) has also not adjudicated on this issue and the Ld. CIT(A) has also not adjudicated on this issue and the Ld. CIT(A) has also not adjudicated on this issue and the disallowance has been made by the Assessing Officer on ad-hoc disallowance has been made by the Assessing Officer on ad disallowance has been made by the Assessing Officer on ad basis. Therefore, we feel it appropriate to restore this issue back to basis. Therefore, we feel it appropriate to restore this issue back t basis. Therefore, we feel it appropriate to restore this issue back t the file of the Ld. Assessing Officer for disallowance after verification the file of the Ld. Assessing Officer for disallowance after verification the file of the Ld. Assessing Officer for disallowance after verification of the expenses. The ground No. 4 of the appeal of the assessee is of the expenses. The ground No. 4 of the appeal of the assessee is of the expenses. The ground No. 4 of the appeal of the assessee is also allowed for statistical purposes. also allowed for statistical purposes.
In the result the appeal of the assessee is In the result the appeal of the assessee is allowed partly for allowed partly for statistical purposes.