The Income Tax Appellate Tribunal (ITAT), Jaipur bench has deleted an addition treating LIC premium as unexplained cash deposit by accepting the rough notings by the assessee as actual transactions.
The appeal has been filed by the assessees, Anita Jain, Usha Jain and Sunita Jain against the orders of Commissioner of Income Tax (CIT), dated 28-01-2022. The Income Tax Appellate Tribunal (ITAT), Jaipur recognised the rough noting by the assessees as actual transactions and deletes additions on LIC Premium.
The Counsels for the assessees, Mahesh Kumar, Hasneena Matta,Anand Chaudhuri and Amit Kumar, submitted that, the LIC Premium has been paid from drawings from Cash Funds and that the Assessing Officer (AO) has relied solely upon unsigned hand written notings which have neither been corroborated nor found from the possession or control of the assessee. Further, the various notings indicate that it’s a summary of LIC and other instruments of the various members of the joint family. The basis of how the AO has derived the alleged number for premia for a given Assessment Year has not been stated by the AO and in case the veracity of the said hand-written loose sheets of papers is suspect.
The Counsels further Contended that the AO/CIT has not brought any substantive material on record to establish that the appellants actually contributed any amount more than the number of drawings as submitted by the assessees and that the Orders of the AO and CIT are bad in law per se. The Counsels also submitted that the alleged “incriminating material” relied upon by the AO/CIT does not belong to the assessees and there is no corroborative evidence to establish that the assessees had any undisclosed incomes for the years under consideration. Thus, the impugned assessment orders are void ab initio having regard to settled law as the same are not emanating from any “incriminating” material. It is settled law that assessments u/s.153A of the Act should be confined to incriminating material only for years where the assessments have concluded and/or time limit for issue of notice u/s.143(2) of the Act has lapsed.
The Bench consisting of Sandeep Gosain, Judicial Member and Dr Meetha Lal Meena Accountant Member held that “Accordingly, having regard to accepted facts for AY 2009-10 concerning cash balances available with the appellants and the absence of any substantive evidence brought on record by the AO/ CIT(A) that the rough notings relied upon were actual transactions carried out by theappellants, we delete the additions on account of LIC Premia treated as unexplained investment.”
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