A.SHANKAR,COIMBATORE vs. ITO, COIMBATORE

PDF · subscribers
ITA 2207/CHNY/2014Status: DisposedITAT Chennai27 April 2017AY 2008-095 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that since M/s. Alagar Roadways had filed its return of income, the assessee should be given credit for at least his share of income from the AOP. The lower authorities failed to verify the AOP's return.

What were the facts?

The assessee claimed drawings of Rs. 55,10,000 from an AOP, M/s. Alagar Roadways, to explain investments. The Assessing Officer disallowed the claim and added Rs. 40,24,620 to the assessee's income, disbelieving the source. The CIT(A) upheld the addition.

What were the issues?

Whether the addition made by the AO on account of unexplained investments, based on disbelieving the source of drawings from an AOP, was justified without verifying the AOP's return. Whether the penalty levied under Section 271(1)(c) was sustainable.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ (SMC

Before: SHRI ABRAHAM P. GEORGE]

For Respondent: Shri. M. Murali Mohan, JCIT

आदेश / O R D E R

1.

These are appeals filed by the assessee directed against orders dated 24.01.2012 and 27.06.2014 of ld. Commissioner of Income Tax (Appeals)-I, Coimbatore.

ITA Nos.482/12 & 2207/14 :- 2 -:

2.

First appeal is against an addition of �40,24,620/- made by the ld. Assessing Officer disbelieving the claim of drawing from M/s.

Alagar Roadways whereas the second appeal is on levy of penalty on the above addition u/s. 271(1) (c) of the Income Tax Act, 1961 (in short ‘’the Act’’). Appeal against the levy of penalty has been filed with a delay of three days. Condonation petition has been filed. Reasons have been shown for the delay. Delay is condoned and the appeal is admitted.

3.

Quantum appeal is first taken up for disposal. Facts apropos are that assessee engaged in the business of lorry operations had made investments in mutual funds to the tune of �1,61,12,870/.

During the course of relevant previous year increase in investments was to the tune of �40,24,620/-. For explaining the sources of investments, assessee claimed drawings of �55,10,000/- from an AOP named M/s. Alagar Roadways. However, it seems assessee could not furnish his account copy in the books of the AOP. As per the assessee the AOP was not maintaining any books. Ld. Assessing Officer disbelieved the claim and made an addition of �40,24,620/-

ITA Nos.482/12 & 2207/14 :- 3 -:

4.

Aggrieved, assessee moved in appeal before ld. Commissioner of Income Tax (Appeals). Contention of the assessee was that M/s. Alagar Roadways had filed return of income and had also filed a statement of total income before the ld. Assessing Officer, and these were not considered. However, ld. Commissioner of Income Tax (Appeals) rejected the contentions of the assessee observing that assessee was unable to produce the bank account of M/s. Alagar Roadways and also his own bank account, which could prove the drawings of the assessee from M/s. Alagar Roadways. He thus upheld the addition.

5.

Now before me, ld. Authorised Representative strongly assailing the orders of the lower authorities submitted that when M/s.

Alagar Roadways has filed its return of income and when assessee was found to be a partner in such AOP, atleast his share of income from the AOP should have been given credit. As per ld. Authorised Representative none of the lower authorities verified the return of the M/s. Alagar Roadways before disbelieving the claim of the assessee.

Per contra, ld. Departmental Representative strongly 6.

supported the orders of the authorities below.

ITA Nos.482/12 & 2207/14 :- 4 -:

7.

I have heard the rival submissions and perused the material on record. It is not been disputed by the Revenue that M/s. Alagar Roadways, AOP from which assessee claimed drawings of �55,10,000/- had filed its return for the impugned assessment year.

In the grounds before ld. Commissioner of Income Tax (Appeals) assessee specifically stated that AOP had filed its return and had also furnished its total income statement. In the circumstances, I am of the opinion that assessee could claim credit atleast for his share, if any, in the profits of the AOP M/s. Alagar Roadways. Lower authorities failed to verify the return of income filed by M/s. Alagar Roadways. In my opinion, the matter requires a fresh look by the lower authorities. Ld. Assessing Officer has to verify the return and the total income shown by the M/s. Alagar Roadways for the impugned assessment year and give credit to the assessee to the extent of his share in such AOP. I therefore, set aside the orders of the lower authorities and remit the issue back to the file of the ld. Assessing Officer for consideration afresh.

8.

Since the quantum appeal has been set aside, the penalty levied on the assessee on such addition stands cancelled. However, ld. Assessing Officer will be free to initiate fresh penal proceedings, if he finds it necessary, after redoing the assessment.

ITA Nos.482/12 & 2207/14 :- 5 -:

9.

In the result, appeals of the assessee are allowed for statistical purposes.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →