Section 69
This query is : Resolved
arora chandrakant
(Querist)
18 December 2010
Dear All
My friend has invested some money in shares from joint account which he had with his wife. Wife is also tax payer. Whatever income received in joint account part of that is invested in shares. However the assessee forgot to disclose the investments in shares in his books though the source of investment is clear. During assessment proceedings the ITO wants to add the investments as undisclosed investment and tax accordingly. Pl justify the ITO. Could any one suggest and case law in the matter.
His wife files return under section 44AE and not maintain books of account. He himself is in the business of insurance commission and maitains books of accounts. However he has neither recorded the invesments nor loan from wife. Wife has admitted vide her letter to ITO that she has lent the amount to his spouse for shares.
My friend has invested some money in shares from joint account which he had with his wife. Wife is also tax payer. Whatever income received in joint account part of that is invested in shares. However the assessee forgot to disclose the investments in shares in his books though the source of investment is clear. During assessment proceedings the ITO wants to add the investments as undisclosed investment and tax accordingly. Pl justify the ITO. Could any one suggest and case law in the matter.
His wife files return under section 44AE and not maintain books of account. He himself is in the business of insurance commission and maitains books of accounts. However he has neither recorded the invesments nor loan from wife. Wife has admitted vide her letter to ITO that she has lent the amount to his spouse for shares.
HUZAIFA HUSSAIN
(Expert)
18 December 2010
Dear Arora
Since as per ur query it is assumed that the investment is made out of taxable profit the ITO can only add income from such investments which is not disclosed. but if u are maintaining books of accounts and investments are not shown in the books than how the bank accounts got tallied.In such case ITO is correct in assuming such income has not been shown and invested.
if book of accounts are not maintained, than assessing officer is not correct in adding complete investments if it is from tax paid income. ITO can add only dividend s received from such shares.
Since as per ur query it is assumed that the investment is made out of taxable profit the ITO can only add income from such investments which is not disclosed. but if u are maintaining books of accounts and investments are not shown in the books than how the bank accounts got tallied.In such case ITO is correct in assuming such income has not been shown and invested.
if book of accounts are not maintained, than assessing officer is not correct in adding complete investments if it is from tax paid income. ITO can add only dividend s received from such shares.
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