Investment on Gold Proved with Bills and Vouchers: ITAT deletes Income Tax Addition [Read Order]

While deleting the Income Tax Addition, the Income Tax Appellate Tribunal (ITAT), Ahmadabad bench has held that investment on gold would not come under Total income of assesse when it is proved with bills and vouchers.

Shri M.J. Shah & Shri Rushin Patel appeared for the appellant and Shri R.R. Makwana appeared for the department.

 In the instant case, theassesseShri Vishal Dilip Palani, was aggrieved by the order of CIT Ahmadabad. Assesse who ran transportation business filedan income return of Rs.4,54,720/- The case of the assesse was selected for scrutiny and assessing officer determined the income as Rs.3,49,14,986/- after disallowing freight charges under Section 40(a)(ia) of Income Tax Act 1961,unexplained cash deposits, unexplained unsecured loans andunexplained investment in gold. the CIT(A) confirmed the disallowance made by the assessing officer on account of freight charges under Section 40(a)(ia) of Income Tax Act 1961as well as the addition made on account of unexplained investment in gold. Additions made on account of unexplained cash deposits and loans were partially disallowed. The assesse filed an appeal on the aggrieved order.

AR on behalf of the assesse contented that the freight charge disallowed under section 40(a)(ia) of Income Tax Act 1961, should be completely allowed and full relief on unsecured debt and unexplained cash credit must be granted. And the addition of investment on gold must be completely deleted. DR on the other hand opposed all the contentions of assesse saying that disallowance on the freight charge is sustainable and cash credits and unsecured debts were not explained satisfactorily because full information of credit and loans were not disclosed by the assesse. And the addition of investment on gold sustains because assesse didn’t maintained any books of accounts for that.

The Tribunal bench comprising of   ShriI P.M. Jagtap (Vice president) and Ms. Madumita Roy (Judicial member) partly allowed the appeal filed by the assesse, finding that no addition can be made on account of gold ornaments because it was entered on books of accounts ,  even if the details and documents such as bills/vouchers are not produced by the assesse no addition can be made because no deduction was claimed on it. The tribunal upheld the other decisions based on section40(a)(ia) of Income Tax Act 1961 ,, unexplained cash credit and unsecured loan as the assesse didn’t furnish satisfying proof.

To Read the full text of the Order CLICK HERE

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