Cash Deposit Of Firm Can’t Be Added To Personal Income Of Partner Without Investigation: ITAT
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The Amritsar Bench of the Cash flow Tax Appellate Tribunal (ITAT), consisting of Anikesh Banerjee (Judicial Member) and Dr. M. L. Meena (Accountant Member), has held that the cash deposit of a company can not be additional to the personal income of the husband or wife with out investigation.
The see underneath area 148 of Revenue Tax Act was issued in opposition to the assessee on 15.03.2013. The assessee submitted his return of revenue declaring the NIL profits as there was no revenue and the assessee only bought a assets. The reasons were recorded by the AO.
The assessee explained the supply of investment decision for the duration of the evaluation proceedings. The assessee discussed that the total of Rs. 5,00,000 was obtained from his father, Sahib Dayal, from the sale of the brickkiln as for each the settlement to promote. The duplicate of the agreement to promote was filed in advance of the decrease authorities. The overall thing to consider of the brickkiln was said at Rs. 14,18,000, out of which Rs. 5,00,000 was claimed to have been received as an advance. The relaxation of the quantity, Rs. 1,53,750, was paid from the price savings of the family. Hence, the assessee has fully spelled out the share of the assessee in the invest in of assets and this was the only share in M/s. True Estate.
The AO asked for specifics of the existence of the organization M/s. True Estate, as the assessee was co-proprietor of the business. The firm had deposited cash amounting to Rs. 25,67,950. Thinking about the income as an undisclosed supply, the assessee’s share in the company was 30%, i.e., an sum of Rs.7,70,000 relevant to the deposit in dollars in the firm’s account was added back again to the complete revenue of the assessee. However, the AO did not increase any amounts from his recorded observations.
The grievance of the assessee is that the AO included again the deposit of income of the business, M/s. Actual Estate, to the assessee’s total revenue.
The assessee contended that the deposit of hard cash by the business must not be additional to the full revenue of the assessee, who is a partner in the business. The different assessment need to be built in the organization account and, accordingly, the addition really should be named for.
The ITAT held that AO fully commited a gross violation of purely natural justice. Without having the assessment of the business, how was the amount of money deposited in the account of the firm additional back again to the partner’s hand. The AO has fully deviated from the recorded cause and the assessment addition.
Situation Title: Srijal Gupta Compared to Cash flow Tax Officer of Money Tax Ward 6(3)
Quotation: I.T.A. No. 420/ASR/2019
Dated: 14.07.2022
Counsel For Appellant: None
Counsel For Respondent: Sr. DR S.M. Surendranath
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