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2016 (1) TMI 1339 - AT - Income TaxAddition on account of Istridhan under section 68 - Held that - The assessee explained that this amount was received from his wife and filed affidavit of Smt. Mukhtiar Kaur, wife of Shri Basant Singh (assessee) (PB-117) in which she has merely stated that ₹ 10,000/- have been saved annually out of the money given by her husband i.e. by the assessee, but the counsel for assessee pleaded before the ld. CIT(Appeals) that such amount was accumulated by wife of the assessee on different occasions by way of gift etc. from their parent and in- laws side at different regular occasions. The affidavit of wife of the assessee is thus, contradictory as against submissions made by the assessee before ld. CIT(Appeals). Further, the affidavit of wife of the assessee is not supported by any evidence or material on record. Thus, assessee failed to prove credit worthiness of his wife and the genuineness of the transaction in the matter. - Decided against assessee Unexplained credit under section 68 - Held that - Even if there are certain contradictions in the statement of Shri Jeet Singh and Shri Hari Singh, the same would not be significant as is required under the Criminal Law, therefore, the judgements relied upon by ld. counsel for the assessee clearly apply to the facts of the case in support of the assessee. We, therefore, do not find any justification to sustain the orders of authorities below. The initial onus upon assessee has thus, been discharged to prove genuine credits in the matter. The Assessing Officer has not brought any evidence against the assessee to contradict or rebut the material on record. We, therefore, set aside the orders of authorities below and delete the addition As regards the credit in the name of Shri Gurdiwan Singh, assessee, however, submitted that subsequent to the statement recorded on 06.11.2008, Shri Gurdiwan Singh filed his affidavit before ld. CIT(Appeals) on 16.05.2009 confirming giving of loan to the assessee. Such an affidavit filed at the subsequent stage without making retraction to the earlier statement given to Assessing Officer would not serve any purpose. Further affidavit of Shri Gurdiwan Singh has not been supported by any evidence or material on record, therefore, authorities below were justified in making and confirming the addition of ₹ 10 lacs. Thus, assessee failed to explain genuineness of the credits in respect of ₹ 10 lacs. Addition shown to have been given by Shri Iqbal Singh, assessee has not produced any evidence before authorities below to explain even his identity, what to say of credit worthiness and genuineness of the transaction in the matter. He was also not produced before Assessing Officer for examination. Therefore, in the absence of any evidence or material on record, authorities below were justified in making and confirming addition. This ground of appeal of the assessee is accordingly dismissed. Unexplained cash credit - Held that - CIT(Appeals) on one of the issue has already noted that the Enforcement Directorate have intimated that the matter is under investigation and in progress, therefore, this issue could be decided by the Enforcement Directorate. Since issue before authorities below was addition under section 68 of the Act, therefore, the issue shall have to be decided on the basis of the parameters prescribed for genuineness of the transaction under section 68 of the Act which, in our opinion, assessee has been able to prove that he has received the money in question from Shri Pritam Singh through genuine transaction. We, therefore, do not find any justification for the authorities below to make and sustain the addition of ₹ 20 lacs. Disallowance on account of use of telephone and motor vehicle for personal purposes - Held that - No merit in this ground of appeal of the assessee. The assessee has not produced any evidence before us to contradict the finding of fact recorded by the authorities below. Since the expenses were not subjected to verification and no log-book or details have been maintained and the assessee submitted before ld. CIT(Appeals) that non-business use of vehicles cannot be ruled out, would clearly support the findings of authorities below that these expenses were not subject to verification and were not supported by the vouchers. The disallowance was, therefore, justified. Addition on account of household withdrawals - Held that - No merit in this ground of appeal of the assessee. The assessee has failed to produce details of household expenses as per requirement of the family. Therefore, authorities below were left with no alternate except to estimate the household expenditure. Before us, no sufficient evidence or material is produced to justify the withdrawal Levy of penalty under section 271(1)(c) - Held that - As assessee did not produce any evidence before the authorities below to explain the addition to the capital account and on part of unexplained credit penalty imposed is confirmed.
Issues Involved:
1. Addition of Rs. 3,30,000 on account of 'Istridhan' under section 68 of the Income Tax Act. 2. Addition of Rs. 36,04,000 on account of unexplained credit under section 68 of the Income Tax Act. 3. Addition of Rs. 20,00,000 on account of unexplained cash credit. 4. Disallowance of Rs. 19,322 on account of use of telephone and motor vehicle for personal purposes. 5. Addition of Rs. 20,000 on account of household withdrawals. 6. Levy of penalty under section 271(1)(c) of the Income Tax Act. Detailed Analysis: 1. Addition of Rs. 3,30,000 on account of 'Istridhan': The assessee claimed that the addition of Rs. 3,30,000 to his capital account was from his wife's savings (Istridhan). The Assessing Officer (AO) found the explanation unconvincing and unsupported by documentary evidence, treating it as unexplained under section 68. The CIT(A) upheld the AO's decision, noting the lack of evidence supporting the source of the amount. The Tribunal dismissed the assessee's appeal, emphasizing the contradictory statements and lack of evidence to prove the creditworthiness and genuineness of the transaction. 2. Addition of Rs. 36,04,000 on account of unexplained credit: The AO found fresh unsecured loans in the names of Jeet Singh, Hari Singh, Balbir Singh (Rs. 25,75,000), Gurdiwan Singh (Rs. 10,00,000), and Iqbal Singh (Rs. 29,000). The AO recorded statements from the creditors, finding contradictions and inconsistencies, particularly noting that the assessee did not deal in property, making the large cash transactions suspicious. The AO concluded that the credits were ingenuine and added the amounts under section 68. The CIT(A) confirmed the AO's findings due to the contradictions and lack of credible evidence. The Tribunal, however, found that the assessee had proved the identity, creditworthiness, and genuineness of the transaction regarding the amount from Jeet Singh and others, deleting the addition of Rs. 25,75,000. For the amounts from Gurdiwan Singh and Iqbal Singh, the Tribunal upheld the additions due to lack of evidence and contradictory statements. 3. Addition of Rs. 20,00,000 on account of unexplained cash credit: The assessee claimed that Rs. 20,00,000 was received from Pritam Singh against the mortgage of a house. The AO and CIT(A) disbelieved the explanation, noting that the cash was kept at home for over a year and the property was in the name of Manjit Kaur, not the assessee. The Tribunal found that the assessee had adequately proved the identity, creditworthiness, and genuineness of the transaction with Pritam Singh, supported by documentary evidence, and deleted the addition. 4. Disallowance of Rs. 19,322 on account of use of telephone and motor vehicle for personal purposes: The AO disallowed these expenses due to the lack of log-books and verification, and the possibility of personal use. The CIT(A) upheld the disallowance, and the Tribunal found no merit in the assessee's appeal, supporting the findings of the authorities below. 5. Addition of Rs. 20,000 on account of household withdrawals: The AO estimated household expenditure at Rs. 1,00,000, finding the assessee's claimed withdrawals of Rs. 80,000 insufficient. The CIT(A) confirmed the addition, and the Tribunal found no merit in the assessee's appeal, noting the lack of evidence to justify the claimed withdrawals. 6. Levy of penalty under section 271(1)(c): The AO imposed a penalty for furnishing inaccurate particulars of income, which was upheld by the CIT(A). The Tribunal, in light of its decisions on the quantum appeal, deleted the penalty on the amounts of Rs. 25,75,000 and Rs. 20,00,000 but upheld the penalty on the remaining additions of Rs. 3,30,000, Rs. 10,00,000, and Rs. 29,000, directing the AO to re-compute the penalty accordingly. Conclusion: The Tribunal partly allowed the assessee's appeals, deleting some additions and penalties while upholding others, based on the evidence and explanations provided.
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