Loading judgment…
Facts
The assessee is in appeal against the order confirming additions made by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act. The additions include cash deposits, rental advance, amount payable to certain persons, and share of profit from a firm.
Held
The Tribunal found that for cash deposits, the assessee had provided some evidence but failed to establish the nature of furniture sold. For rental advance and amount payable, there was no change in the figures from the previous year, making the additions unsustainable. The share of profit addition was also found to be unsubstantiated.
Key Issues
Whether the additions made by the AO and confirmed by the CIT(A) on account of cash deposits, rental advance, amount payable, and share of profit from a firm are sustainable.
Sections Cited
143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: HON’BLE SHRI ABY T. VARKEY, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा*रण वष* / Assessment Year: 2008-09) Shri Prem Watwani DCIT बनाम/ #19, Race Course Road, Guindy Non-Corporate Circle-19(1) Vs. Chennai-600 032. Chennai-600 034. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAAPW-6052-C (अपीलाथ�/Appellant) : (� थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri M. Karunakaran (Advocate) – Ld.AR � थ�कीओरसे/Respondent by : Ms. R. Anita ( Addl.CIT) -Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 23-09-2024 घोषणाकीतारीख /Date of Pronouncement : 25-09-2024 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
Aforesaid appeal by assessee for Assessment Year (AY) 2008-09 arises out of an order passed by learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] on 13-02-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) of the Act on 30-12-2010. The assessee is aggrieved by confirmation of addition of cash deposits for Rs.13.75 Lacs, addition of rental advance for Rs.4.27 Lacs, Amount Payable to certain persons for Rs.6.39 Lacs and Share of Profit from firm for Rs.5.86 Lacs.
The grounds relating to addition under the head income from house property has not been pressed by Ld. AR. The Ld. AO framed an assessment on 30-12-2010 making certain additions in the hands of the assesseee. During first appellate proceedings, the assessee’s submissions were subjected to remand proceedings. Based on the same, the Ld. CIT(A) confirmed impugned additions against which the assessee is in further appeal before us. Having heard rival submissions, the issues are adjudicated as under.
Cash Deposits in Bank Account 2.1 The assessee deposited cash of Rs.13.75 Lacs in bank account and accordingly, required to explain the source thereof. The amount of Rs.12 Lacs was stated to be received out of sale proceeds of furniture as sold to seven persons as tabulated on Page No.5 of the assessment order. The assessee furnished PAN of purchasers along with confirmation letters. The balance amount of Rs.1.50 Lacs was stated to be sourced out of opening cash balance and out of internal accruals. The Ld. AO rejected the submissions and added the same to the income of the assessee. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 2.2 We find that though the assessee has filed confirmation of purchasers and their PAN etc., however, it has failed to establish the nature / particulars of furniture being sold by the assessee. The assessee’s statement of affairs as on 31-03-2007 and 31-03-2008 has been placed on Page Nos.17 & 18 of the paper book. Upon perusal of the same, the furniture & fixtures as on 31-03-2007 has been shown for Rs.9.50 Lacs whereas as on 31-03-2008, the same stand at a figure of Rs.1.50 Lacs. Apparently, the sale of furniture, to some extent, could not be ruled out. The assessee has also reflected opening cash balance of Rs.7.63 Lacs. Considering the same, we accept the claim to the extent of Rs.8.50 Lacs. The remaining additions of Rs.5 Lacs stand confirmed.
Rental Advance 3.1 As per statement of affairs, the assessee reflected rental advance of Rs.4.21 Lacs from SRF Ltd. and Rs.3.09 Lacs from other parties. The assessee could file confirmation to the extent of Rs.7.30 Lacs and accordingly, the balance Rs.4.27 Lacs was added to the income of the assessee. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 3.2 Upon comparison of statement of affairs as on 31-03-2007 and 31- 03-2008, we find that there is no change in the figure of rental advances during this year. In such a case, the impugned addition could not be sustained. We order so.
Amount Payable to Mukesh, Sandeep and Nisha 4.1 As per Balance Sheet, amount of Rs.6.39 Lacs was payable to captioned persons. However, this amount was not confirmed by Sandeep and Nisha and therefore, added to the income of the assessee. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 4.2 Upon comparison of statement of affairs as on 31-03-2007 and 31- 03-2008, we find that there is no change in the figures of amount payable to aforesaid parties during this year. In such a case, the impugned addition could not be sustained. We order so.
Share of Profit from firm 5.1 In the capital account, share of profit as received from a partnership firm M/s Vijay Enterprises was shown as Rs.29.02 Lacs whereas in the statement of total income, the share was shown as Rs.23.18 Lacs. The differential of Rs.6.39 Lacs was added to the income of the assessee. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 5.2 As per capital account of the assessee in M/s Vijay Enterprises, it could be seen that assessee’s share of profit for this year is Rs.29.02 Lacs. The same amount has been credited by the assessee in his statement of affairs. Quite clearly, there is no discrepancy as alleged by Ld. AO. This addition could not be sustained. We order so. Conclusion 6. The appeal stand partly allowed in terms of our above order. Order pronounced on 25th September, 2024 Sd/- Sd/- (ABY T. VARKEY) (MANOJ KUMAR AGGARWAL) �ाियक सद" /JUDICIAL MEMBER लेखा सद" / ACCOUNTANT MEMBER चे4ई Chennai; िदनांक Dated :25-09-2024 DS आदेशकीIितिलिपअ'ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. � थ�/Respondent 3. आयकरआयु=/CIT Chennai. 4. िवभागीय�ितिनिध/DR 5. गाडBफाईल/GF