2013 (8) TMI 106 - AT - Income Tax

Unaccounted receipts of hiring charges - CIT(A) deleted part additions - Held that - As decided in CIT Vs Krishnaveni Ammal (1983 (1) TMI 3 - MADRAS High Court) law of evidence mandates that if the best evidence is not placed before the court, an adverse inference can be drawn as against the person who ought to have produced it. Similar is the circumstances in the case under consideration that the assessee simply contended that the receipt belonged to his elder brother but failed to furnish the necessary evidence before the Revenue authorities and before us also. As regards merit of the case, we noticed that the A.O. made addition on the ground of amount of freight whereas the CIT(A) was of the view that only profit is to be added which is correct therefore no infirmity in the order of the CIT(A) in sustaining the addition of Rs.16,78,774/- on account of hiring charges. Unexplained cash deposits in bank - Zero house hold expenses as appearing in bank statement - CIT(A) deleted additions of Rs.11,55,000/- on the ground that he has allowed set off against the addition of Rs.16,78,774/- confirmed on account of truck hiring receipt and the amount of Rs.11,55,100/- and Rs.1,44,000/- were not separately added - Held that - The CIT(A) in principle upheld the addition but relief was allowed by allowing benefit of its telescoping as above. No infirmity in the order of CIT(A) as against the order of Rs. 11,55,100/- and Rs.1,44,000/- as the addition of Rs.16,78,774/- has been sustained which is sufficient for set off of these two addition of Rs.11,55,100/- and Rs.1,44,000/-.

Summary

Issues Involved:
1. Addition on account of unaccounted receipts of hiring charges.
2. Deletion of addition on account of unexplained cash deposits in the bank.
3. Telescoping the addition on account of zero household expenses.

Detailed Analysis:

1. Addition on Account of Unaccounted Receipts of Hiring Charges:
The core issue was whether the assessee had unaccounted receipts of Rs. 83,93,869/- from truck plying business. The A.O. noted that the assessee's PAN was associated with these receipts and corresponding TDS deductions. The assessee denied these receipts, claiming they belonged to his elder brother's transport business. However, the assessee failed to provide sufficient evidence to support this claim. The CIT(A) found it likely that the assessee was running trucks in an unaccounted manner and thus held the assessee liable for these receipts. The CIT(A) estimated that 20% of the receipts should be taxed, resulting in an addition of Rs. 16,78,774/-. This decision was upheld by the Tribunal, confirming the addition of Rs. 16,78,774/- on account of hiring charges.

2. Deletion of Addition on Account of Unexplained Cash Deposits in Bank:
The A.O. added Rs. 11,55,100/- to the assessee's income, citing unexplained cash deposits in the Aryavrat Gramin Bank. The assessee argued that these deposits were made in various installments over the year and were part of the income from unaccounted truck plying. The CIT(A) accepted this explanation, noting that the peak deposit could be considered as explained by the unaccounted income of Rs. 16,78,774/-. Thus, the addition of Rs. 11,55,100/- was deleted by the CIT(A) and this decision was upheld by the Tribunal.

3. Telescoping the Addition on Account of Zero Household Expenses:
The A.O. added Rs. 1,44,000/- for household expenses, stating that the assessee's claimed withdrawals were inadequate. The CIT(A) upheld this addition in principle but allowed it to be set off against the unaccounted income of Rs. 16,78,774/-. The Tribunal agreed with this approach, confirming that the addition of Rs. 1,44,000/- would be telescoped into the unaccounted income, thus not requiring a separate addition.

Conclusion:
The Tribunal upheld the CIT(A)'s decision to restrict the addition for unaccounted receipts to Rs. 16,78,774/-, delete the addition of Rs. 11,55,100/- for unexplained cash deposits, and allow the household expenses addition of Rs. 1,44,000/- to be set off against the unaccounted income. Hence, both the appeals of the Revenue and the assessee were dismissed.