Income tax appeal

This query is : Resolved 

Online (Querist)
22 April 2012

For A.Y 2005-06, In respect of a salaried person, declared income of Rs.1,96,000/- taxable Rs.1,20,000/- In scrutiny, ITO, made additions of Rs.1,30,274/- (shown cash expenses) + Rs.36,000/- (presumptive rental income), as undisclosed income under section 69C, raised demand of Rs.56,305/- including interest, also initiated penalty proceedings u/s. 271 of I.T.Act,1961, we made deposit of Rs.5000/- in protest and moved an appeal, meanwhile ITO also withdrew Rs.63000/- from Bank Account of Assesse, around 3 years ago. The ITO has made blunders, like he added Rs.36,000/- as rent but didn’t gave benefit of such addition in cash availability, against declared cash availability of Rs.2,80000/- (last 7 years balance sheets filed), accepted cash in hand as Rs.10,000/- and here too didn’t gave benefit of this cash availability for expenses.
Now, the Appellate Authority, has reduced addition to Rs.68,000/- + Rs.36,000/- i.e. allowed benefit of Rs.10000/- + Rs.36,000/- + Postal cash receipt in cash availability. But refused to accept that am was having cash as declared, and also that I have received cash in lieu of payments made on behalf of brother in law, mother from my bank, on the ground that though confirmation is filed, passbooks showing matching entries is filed, but said brother in law and mother didn’t filed their cash availability evidence to prove that they have returned cash.
It has taken years in above, am being advised, that moving ITAT shall result in fresh initiation of cycle from ITO, fresh expenses in litigation, no surety to succeed, etc., etc., as such, to end woes, accept this order in appeal, and get the proceeding under section 271 cleared.
Please advise, what to do?

C. P. CHUGH (Expert)
22 April 2012

Dear PRadeep,
Based on the information provided, it appears CIT (A) has not given you substantial relief, which you deserved. If the ITAT is not far off from your place, it would be worth trying not only for the tax benefits but also for penalty u/s 271 which could be quite heavy.

Suhail A.Siddiqui (Expert)
22 April 2012

Mr. Pardeep
Although without Assessment order and appeal order nothing could be advised at your narration of fact. In case there is limitation available u must knock ITAT door for appeal order. If ITO passed fresh order for assessment and penalty, you must move for first appeal etc

Shonee KapoorOnline (Expert)
22 April 2012



Shonee Kapoor

Raj Kumar MakkadOnline (Expert)
22 April 2012

I endorse the views of Chugh.

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