2012 (8) TMI 1083 - AT - Income Tax

Summary

Issues Involved:
1. Addition of Rs. 14,77,000/- as unexplained investment.
2. Addition of Rs. 7,20,000/- as income from resort business.
3. Addition of Rs. 8,98,528/- on account of unsecured loans.

Summary:

Issue 1: Addition of Rs. 14,77,000/- as unexplained investment

The appellant contended that the CIT(A) erred in upholding the addition of Rs. 14,77,000/-. The AO found that the assessee had not declared any agricultural income and claimed receipt of Rs. 14.70 lacs from his father, which was not reflected in the balance-sheet. The AO treated the investment in the purchase of land as unexplained investment. The CIT(A) upheld this addition, stating that the assessee failed to prove the source of funds and the explanation appeared to be an afterthought. The Tribunal upheld the findings of the CIT(A), emphasizing the necessity of cogent and corroborative evidence to support the explanation.

Issue 2: Addition of Rs. 7,20,000/- as income from resort business

The appellant argued that the CIT(A) erred in confirming the addition of Rs. 7,20,000/-, which related to agricultural income belonging to Jagdev Singh Grewal HUF. The AO observed that the assessee did not show any agricultural income in his return and treated the credit entries as income from the resort business. The CIT(A) upheld the AO's findings, noting that the agricultural income should have been received in the HUF's account, not the assessee's. The Tribunal found no infirmity in the lower authorities' findings and upheld the addition.

Issue 3: Addition of Rs. 8,98,528/- on account of unsecured loans

The appellant contended that the CIT(A) erred in confirming the addition of Rs. 8,98,528/- received from close friends and relatives. The AO noted that the entries came from Western Union money transfers, which were personal in nature and not for commercial transactions or property purchase. The CIT(A) upheld the addition, stating that the remittance was for family maintenance and not a loan. The Tribunal agreed with the lower authorities, noting the failure to explain the nature and source of the amount, and upheld the addition.

General Grounds:

Ground Nos. 6 & 7 were general in nature and dismissed without separate adjudication.

Conclusion:

The appeal of the assessee was dismissed.

Order pronounced in the Open Court on 24th Aug., 2012.