RENY JOSEPH,THANE vs. ITO WD 3(2), THANE

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ITA 3967/MUM/2014Status: DisposedITAT Mumbai10 January 2017AY 2009-103 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the tax authorities did not properly consider the assessee's explanations regarding past savings and gifts from parents. The issue was therefore set aside for fresh examination by the Assessing Officer.

What were the facts?

The assessee contributed capital of Rs. 13.15 lakhs to her proprietary concerns, claiming it as past savings. The Assessing Officer and CIT(A) added this amount to her income under Section 68. The assessee also claimed the funds were gifts from her agriculturist parents.

What were the issues?

Whether the assessee's explanation for the source of capital contribution was adequately considered by the lower authorities.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” Bench, Mumbai

Before: Shri B.R. Baskaran (AM) & Shri Ravish Sood(JM)

For Respondent: Shri Purushottam Kumar
Hearing: 10.1.2017Pronounced: 10.1.2017

O R D E R Per B.R. Baskaran (AM) :-

The appeal filed by the assessee is directed against the order dated 12.2.2014 passed by the learned CIT(A)-I, Thane and it relates to A.Y. 2009-10.

2.

None appeared on behalf of the assessee even though the notice of hearing was sent to the assessee by registered post on more than one occasion. Hence, we proceed to dispose of the appeal ex-parte, without presence of the assessee.

3.

We noticed that the assessee is contesting the addition of ` 13.15 lakhs made by the Assessing Officer u/s. 68 of the Act.

4.

The assessee filed her return of income for the year under consideration declaring total income of ` 5,49,650/-. The return of income was taken up for scrutiny. The Assessing Officer noticed that the assessee is engaged in the business of trading in mechanical instruments and servicing of instruments under two proprietary concerns namely M/s. Tech Overseas and M/s. Hitech Services. The Assessing Officer further noticed that the assessee has introduced a sum of ` 10.15 lakhs in M/s. Techno Overseas and ` 2.40 lakhs in M/s. Hitech Services as her capital contribution. The Assessing Officer asked the assessee to explain the sources there of aggregating to ` 13.15 lakhs. The assessee explained the same to be her past savings, but the Assessing Officer did not accept the same. Accordingly, he assessed the capital contribution of ` 13.15 lakhs as income of the assessee u/s. 68 of the Act.

5.

The learned CIT(A) also confirmed the same and hence the assessee has filed the appeal before us.

6. We have heard learned Departmental Representative and perused the record. We noticed that the assessee has explained that she and her husband were in service for the past fifteen years and they were also filing return of income regularly. Accordingly the assessee has submitted that the past savings were used to make capital contribution. We noticed that the tax authorities have not taken cognizance of the claim of filing of income tax returns, which would have helped to appreciate the explanations furnished by the assessee. Further, the assessee has submitted one more explanation before the learned CIT(A) i.e. she has claimed to have received gifts from her parents who were agriculturists having rubber estates in Kerala. This explanation of the assessee has also not been considered by the learned CIT(A). Under these set of facts, we are of the view that this issue requires fresh examination at the end of the Assessing Officer. Accordingly, we set aside the order passed by the learned CIT(A) and restore this issue to the file of the Assessing Officer with the direction to examine the same afresh by duly considering the explanations of the assessee.

6.

In the result, appeal filed by the assessee is treated as allowed for statistical purposes.

Order has been pronounced in the Court on 10.1.2017.

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