The Income Tax Appellate Tribunal (ITAT), Kolkata Bench held that CIT(A) was justified in deleting the addition of Rs.10 lacs incurred on account of undisclosed expenses, not reflected in the books of account.
The Search under Section 132 of the Income Tax Act, 1961 was conducted against the assessee, Mani Group, thereby triggering section 153A of the Act. Prior to the date of search, the income-tax scrutiny assessment under section 143(3) of the Act stood already completed i.e two months before the search.
Accordingly, the assessment did not abate consequent to the search. The original return of income for Assessment Year 2014-15 was filed and the time limit for issuance of notice under Section 143(2) of the Act had not expired as on the date of search.
Accordingly, Assessment Year 2014-15 was an abated assessment year. With regards to Assessment Year 2015-16, 2016-17 and 2017-18, it was pointed out that the returns of income for all these years were filed only after the date of search. Therefore, except Assessment Year 2013-14, all the other Assessment Year 2014-15, 2015-16, 2016-17 and 2017-18 were abated assessments.
The revenue is aggrieved by the action of the Ld. CIT(A) in deleting the addition of Rs.10 lacs which was incurred on account of undisclosed expenses and which facts was not reflected in the books of account on the grounds that Rs.10 lacs emanating from is on account of undisclosed expenses.
The tribunal headed by the Vice President P.M. Jagtap noted that CIT(A) after perusal has taken into account that it is a hand-written loose paper which does not reveal that the assessee had received Rs. 10 lacs as sale consideration or the sale consideration was to the tune of Rs. 10 lacs and so he deleted it.
Therefore, the tribunal held that the conclusion of the CIT(A) cannot be termed perverse and is a plausible view for the reason that the AO has assumed facts that the assessee has received sale consideration Rs. 10 lacs from Manoj Rathi in respect of Swarnamani project.
“We note that the AO has not made any attempt to summon Shri Manoj Rathi and confront him with MSL-8 page 15 and recorded his statement as to whether he has given Rs. 10 lacs to assessee on 21.06.2016 for the servant quarter in the said Swarnamani project. In the absence of any enquiry whatsoever, the hand written ‘parchi/loose sheet’ cannot be the basis for the assumption of adverse facts against the assessee and, therefore, the Ld. CIT(A) rightly deleted the addition and, therefore, we confirm the action of the Ld. CIT(A),” the tribunal said.Subscribe Taxscan AdFree to view the Judgment