The Ahmedabad Bench of Income tax Appellate Tribunal (ITAT) held that all income relating to entries noted in the diary stood disclosed by the partnership to and accepted by the settlement commission, thus upheld the decision of Commissioner of Income Tax (Appeal) [CIT(A)] in deleting the income Tax Addition.
The assessee Shyamsunder R. Agrawal is partner in a partnership firm, M/s.Laxmi Constructions, search operation under Section 132 of the Income Tax Act, 1961 was conducted at the residential premises of the assessee, and simultaneous survey operation under Section 133A of the Income Tax Act was carried out at the business premise of M/s.Laxmi Construction.
The partnership firm had filed a petition before the Settlement Commission and offered income on account of noting in this diary for settlement.
During assessment proceedings, the assessee had not disclosed any income on account of noting in the impugned diary on the ground that this stood disclosed and accepted in the settlement petition of the partnership firm.
But the Assessing Officer (AO) did not agree with the same for the reason that the Principal Commissioner of Income Tax (PCIT) in his report under Rule 9 had categorically stated that the impact of diary would be considered during the course of assessment of the assessee, and also for the reason that the assessee had admitted to the transactions pertaining to his unaccounted income and expenditure. Accordingly, he made an addition of Rs.2,54,73,420/- under Section 69 C of Income Tax Act.
The partnership firm had surrendered the higher of the payments and receipts, being Rs.1.66 crores, to the Settlement Commission, while the AO had made addition to the income of the assessee of the total entries found in the diary amounting to Rs.2,54,73,720/-.
Aggrieved by the deletion of addition made under Section 69C of the Income Tax Act the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] , which deleted the entire addition made in the hands of the assessee.
Aggrieved by the order of CIT(A), the revenue filed an appeal before the Tribunal.
The Bench comprising of Annapurna Gupta, Accountant Member and T.R. Senthil Kumar, Judicial Member observed that CIT(A) has found that all income relating to entries noted in the diary stood disclosed by the partnership to and accepted by the settlement commission.
It was further observed that the assessee had stated the notings in the diary as relating to his business and which stood disclosed by its partnership firm to the settlement commission, who in turn accepted the same also, thus the Tribunal found no reason to interfere in the order of the CIT(A) deleting the addition made in the hands of the assessee finding the said income to be doubly assessed to taxed.
Hence the appeal of the Revenue was dismissed.
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