2012 (11) TMI 102 - AT - Income Tax

Unexplained Cash Credits - Held that - Source of cash deposits as same should have been withdrawn from another account generally during the period of one year before the date of deposit is accepted - CIT(A) has shown all the patience and it seems that the assessee was not fully cooperating by adducing any evidence for the source against the deposits as the ld. CIT(A) has given opportunity on various dates and case dragged before him for two years - In the facts and circumstances of the case CIT(A) has correctly adjudicated the issue and Order of CIT(A) is confirmed - In the result, cross-appeals filed by the revenue and the assessee are dismissed.

Summary

Issues Involved:
1. Unexplained cash credits worth Rs. 30,07,000/-
2. Addition of Rs. 1,39,93,000/- made by the Assessing Officer

Issue-Wise Detailed Analysis:

1. Unexplained Cash Credits Worth Rs. 30,07,000/-
The Revenue contested the relief granted by the CIT(A) concerning unexplained cash credits amounting to Rs. 30,07,000/-. The CIT(A) accepted the source of these deposits as being out of earlier withdrawals without any documentary evidence. The Tribunal reviewed the details and found that the CIT(A) had correctly accepted the source of cash deposits. The deposits were generally withdrawn from another account within a year before the date of deposit. The Tribunal noted that the CIT(A) had shown patience and provided ample opportunities for the assessee to present evidence, which the assessee failed to do. Therefore, the Tribunal confirmed the CIT(A)'s decision to grant relief for the unexplained cash credits.

2. Addition of Rs. 1,39,93,000/- Made by the Assessing Officer
The assessee challenged the addition of Rs. 1,39,93,000/- made by the Assessing Officer. The Assessing Officer had noticed significant deposits in two bank accounts and asked the assessee to explain the source. The assessee claimed the sources included a gift from her sister, proceeds from the sale of a house, and rental income from properties in the U.K. However, the Assessing Officer found insufficient evidence to support these claims and added Rs. 1,70,00,000/- to the income of the assessee.

Upon appeal, the CIT(A) reviewed the evidence, including an affidavit from the sister, bank statements, and tax returns. The CIT(A) concluded that the sister did not have the capacity to gift such large amounts, as her income and the financial status of her husband's restaurant did not support the claim. Consequently, the CIT(A) upheld the addition of Rs. 1,39,93,000/-.

The Tribunal agreed with the CIT(A)'s findings, noting that the assessee failed to link specific withdrawals to the deposits and did not provide sufficient evidence to prove the genuineness of the transactions. The Tribunal cited relevant case laws, including CIT v. P. Mohanakala and Sumati Dayal v. CIT, to support the decision. The Tribunal confirmed the CIT(A)'s order, finding no merit in the assessee's appeal.

Conclusion:
The Tribunal dismissed the cross-appeals filed by the Revenue and the assessee. The CIT(A)'s decisions were upheld, confirming the relief for unexplained cash credits and the addition of Rs. 1,39,93,000/- to the assessee's income.