Assessee co-operative society was eligible to claim deduction u/s 80P(1) (of Income Tax Act, 1961)

1. The assessee's assessment was reopened u/s 147 (of Income Tax Act, 1961)/148 of the Act. The Assessee had not filed return of income u/s 139 (of Income Tax Act, 1961), however, in view of notice u/s 147 (of Income Tax Act, 1961), the assessee filed return of income declaring an income of Rs.90,000/- from other sources and Agricultural income of Rs.3,25,000/-. The Inv. (Wing) of the Department had the information that assessee had acquired certain properties and the explanation regarding source from purchase of such properties provided by the assessee to ADIT/DDIT(Inv.), was not satisfactory and therefore, the assessee was show caused for explaining the sources of investment of properties to the tune of Rs.30.57 lacs. Assessee pleaded that during the financial year 2005-06, he had made total investment of Rs.9,87,525/- for purchase of land vide two purchase deeds dated 29.08.2005, but as per letter of ADIT(Inv.), Jalandhar (copies of 4 purchase deeds were placed on record), assessee made total investment of Rs.33,74,250/- during the financial year 2005-06.

2 .CIT(A) restricted the addition to Rs.17,17,080.

3. On appeal, the ITAT held as under:

“We find that the Assessing Officer in this case had made an addition of Rs.25,12,475/- which the learned CIT(A) has restricted to Rs.17,17,080/-. The breakup of the additions confirmed by learned CIT(A) is Rs.4,92,500/- on account of deposits in bank and Rs.12,24,580 on account of unexplained investment in properties. The learned CIT(A) while examining the issue of investment in property also observed that there were certain deposits in the bank account which was not examined by Assessing Officer and therefore, he suo motu examined the same and made addition thereof besides confirming part addition on account of unexplained investments. The grievance of the assessee is that the unexplained investment was made out of bank deposits only and therefore, the addition made on account of undisclosed deposits as well as unexplained investment amounted to double addition which was not permissible. The other grievance of the assessee is regarding the rejection of the voucher for sale of gold which the assessee had claimed to have used for purchase of agricultural land. We further find that on further enquiry made by Assessing Officer from the IT system had revealed that Sh. Ashok Bhalla, S/o Sh. Ram Lubhaya was holding PAN-ABLPB1386Q in his individual capacity and his office address was Jewelers Bhalla Sons, House No. 622, Phaze-I, Mohali. It was further observed from enquiry from ITO, Ward No.5(4), Chandigardh that the income for Asst. Year 2005-06 was filed by Ashok Bhalla at Rs.91,470 and no return for Asst. Year 2006-07 Asst. year 2006-07 and onwards was available on system. The Assessing Officer had rejected the purchase bill of Jeweler, Bhalla Sons, Phagwara on the basis of that no VAT/Sales Tax No. was not printed on the bill and further he held that M/s Jeweler Bhola Sons had furnished return of income for Asst.Year 2005-06 only. From the arguments of learned AR, we are of the opinion that the matter requires further verifications regarding the genuineness of bill produced by assessee for sale of gold and further it is required to examine as to whether any double additions has been made by learned CIT(A) on account of deposits in bank and investment in purchase of land. As in our opinion the addition can be made only on account of one reason that if the additions are made on account of undisclosed deposits then again if assessee had utilized these unexplained deposits for purchase of land then again the addition cannot be made. In view of the above we remit back the case to the office of Assessing Officer for further examination of these facts. Needless to say that assessee will be provided sufficient opportunity of being heard.

4. In view of the above, the appeal filed by assessee is allowed for statistical purposes.”

Case Reference-Before S/Shri Rajpal Yadav, JM, & Manish Borad, AM. ITA No.2445/Ahd/2012 Asst. Year: 2008-09 Prabhat Credit & Thrift Co-op. Society, Vs. DCIT, Mehsana Circle

IN THE INCOME TAX APPELLATE TRIBUNAL

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