Additions made solely on the basis of AIR information are not sustainable in law. The AO has to prove that assessee has received income from a particular source. The assessee cannot be expected to prove the negative It has been held time and again by this Tribunal that the additions made solely on the basis of AIR information are not sustainable in the eyes of the law. If the assessee denies that he is in receipt of income from a particular source, it is for the AO to prove that the assessee has received income as the assessee cannot prove the negative Read more of this post Santosh Kumar Agarwal | January 9, 2015 at 11:01 AM | Tags: Additions made solely on the basis of AIR information are not sustainable in law. The AO has to prove that assessee has received income from a particular source. The assessee cannot be expected to pro, M/s. ANS Law Associates vs. ACIT (ITAT Mumbai) | Categories: Case Law | URL: http://wp.me/p2e8mQ-1bs
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S. 50C/ 271(1)(c): Even if s. 50C is applicable, computing capital gain de hors it does not amount to furnishing inaccurate particulars of income or concealment of income for levy of penalty u/s 271(1)(c) The Assessing Officer has not given any finding that the sale consideration disclosed by the assessee is not actual amount received as per the agreement of sale. The addition was made by invoking the deeming provisions of section 50C whereby the full value of consideration was adopted as per the valuation of the stamp duty authority for levy of stamp duty. The assessee has disclosed all relevant details as well as documents in support of its computation of Short term Capital Gain by taking into consideration the actual sale consideration received by the assessee. Consequently penalty u/s 271(1)(c) cannot be levied Read more of this post Santosh Kumar Agarwal | January 9, 2015 at 11:02 AM | Tags: ACIT vs. Sunland Metal Recycling (ITAT Mumbai), computing capital gain de hors it does not amount to furnishing inaccurate particulars of income or concealment of income for levy of penalty u/s 271(1)(c), S. 50C/ 271(1)(c): Even if s. 50C is applicable | Categories: Case Law | URL: http://wp.me/p2e8mQ-1bv
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Section 56 of the Act deals with income from other sources. Sub-clause (vi) to section 56 (2) was inserted by taxation laws (amendment) Act, 2006, with effect from 01/04/2007. The plain reading of the aforementioned statutory provisions reveals that it is intended to tax a receipt of money without consideration. The impugned amount was received by the assessee for making the investment on behalf of Ustad Zakir Hussain, on the basis of Power of Attorney. If the provisions of the Act and the content of the Power of Attorney are kept in juxtaposition and analyzed then it can be concluded that the mutual funds, purchase and sold by the assessee were made on behalf of Shri Zakir Hussain
S. 56(2)(vi): Amounts received under a Power of Attorney for making investments cannot be treated as income in the hands of the recipient
Section 56 of the Act deals with income from other sources. Sub-clause (vi) to section 56 (2) was inserted by taxation laws (amendment) Act, 2006, with effect from 01/04/2007. The plain reading of the aforementioned statutory provisions reveals that it is intended to tax a receipt of money without consideration. The impugned amount was received by the assessee for making the investment on behalf of Ustad Zakir Hussain, on the basis of Power of Attorney. If the provisions of the Act and the content of the Power of Attorney are kept in juxtaposition and analyzed then it can be concluded that the mutual funds, purchase and sold by the assessee were made on behalf of Shri Zakir Hussain and there is no evidence to establish that the investment made by the assessee is from the funds of Shri Zakir Hussain as is evident from return of income, balance sheet filed in the case of Ustad Zakir Hussain and the explanation of the assessee there is no doubt about the genuineness of the transaction. The assessee never became the beneficiary of the impugned amount i.e. Rs.25 lakh, thus there is no question of making the addition u/s 56(2)(vi) of the Act. Even otherwise, the amount after liquidating the mutual fund was returned back meaning thereby, the amount was returned back along with profit, consequently, the provision of section 56(2)(vi) is not applicable (CIT vs Saran Pal Singh (HUF) 237 CTR (P & H) 50 followed)
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