Addition of Undisclosed Income will sustain unless Transaction details of Refund made by Customer

The Income Tax Appellate Tribunal (ITAT), Pune bench has held that the addition of undisclosed income will sustain unless transaction details of refund made by customer were furnished.

The assessee engaged in the business of trading in the land on a very small scale and also conducts agricultural activity on land taken on rent. The AO treated an amount of Rs.47,20,000/- found in the bank account of the assessee as undisclosed income. It was contended by the appellant that the amount deposited out of earlier withdrawals from bank accounts, agricultural income and represents the turnover of the business.

The CIT(A) held that the deposits to an extent of Rs.21,40,000/- were explained in respect of deposits out of earlier withdrawals and advance received which were refunded later. The net agricultural income of Rs.28 lakhs is not possible giventhe possession of agricultural land in 52R which was not sufficient. The assessee claimed that the advances received from customers were refunded before year-end.

It was observed that the sale bills of agricultural produce were furnished before the AO and was held that the bills were obtained from the non-existent merchant.

Shri Inturi Rama Rao, AMand Shri Viswanethra Ravi, JMobserved that the appellant failed to prove record anything to show that the advances from customers werefunded before year-endand upheld therestriction on the addition to an extent of Rs.12,90,000/- being 50% of Rs.25,80,000/- on account of non-furnishing of requisite details regarding the refund made to customers on account of advances received on land transactions. The appeal of the assessee was partly allowed. Shri M.K. Kulkarni represented the assessee and Shri S.P. Walimbe represented the revenue.

Income Tax Return: CBDT releases Excel Offline Utility for filing ITR-5Read More: https://www.taxs

The Central Board of Direct Taxes (CBDT) has released Excel Offline Utility dated June 14, 2022 for the preparation and filing of ITR-5.

The ITR Form 5 is a form suitable for bodies such as firms, Body of Individuals (BOIs), Limited Liability Partnerships (LLPs), Artificial Juridical Person (AJP), Association of Persons (AOPs), the estate of insolvent, the estate of deceased, investment fund, business trust, local authority, and co-operative society for filing the ITR. Any individual or entity belonging to the aforementioned categories is eligible for ITR 5 filing.

Disallowance u/s 40(a)(ia) cannot be made when established that payee has offered Income on Interest

The Income Tax Appellate Tribunal (ITAT), Ahmedabad held that disallowance under Section 40(a)(ia) cannot be made when established that payee has offered income on interest payment made by appellant.

The assessee, Shri Yagnesh Dayabhai Vyas had made interest payment to Citi Finance for Rs. 7,96,995/- and Rs. 27,54,253/- to Gruh Finance, on which no TDS was deducted by the appellant as the case made out by the Revenue. So far as the disallowance under Section 40(a)(ia) with respect to Gruh Finance, the appellant had submitted a chart in order to explain that TDS has been deducted and paid during the relevant assessment year. Further that the appellant submitted Form 16A which contains quarter-wise TDS deducted by the appellant along with the copy of challans of TDS payment which reconciles with Form 16A submitted by the appellant. Both were on record before the Commissioner of Income Tax (CIT) and even before the Assessing Officer (AO).

Waseem Ahmed, Accountant Member and Madhumita Roy, Judicial Member observed that” TDS has been duly deducted and same has been paid to Government account before due date of filing of return which is apparent from TDS challans as well as Form 16A, disallowance under Section 40(a)(ia) of the Act is not sustainable. Finding of the AO that no TDS has been deducted on interest payment to Gruh Finance is wrong and deletion of such disallowance made by the CIT is found to be justified.

The finding of the CIT that disallowance under Section 40(a)(ia) in this regard cannot be made when it has been established that the payee has offered income on interest payment made by the appellant is found to be justified. No infirmity is found in the order passed by the Ld. CIT(A) in deleting the impugned addition so as to warrant interference.”