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2013 (8) TMI 406 - AT - Income TaxAssessment u/s 153A - Addition under section 68 of Income Tax Act, as unexplained expenditure - There are entries of deposits of cash and cheques in the denominations of Rs.49,000/- and Rs.54,000/- in ICICI and IDBI Banks - The details of deposit of Rs.70,14,083/- was not pointed out by the assessee nor such details are available on record Held that - Unless contrary materials are put on record, the fact recorded by the A.O. is to be taken as correct which is that the assessee has deposited cash and cheques in the denomination of Rs.49,000/- and Rs.54,000/- totaling to Rs.70,14,083/- in both the Bank accounts. The CIT(A) without appreciating the facts recorded by the A.O. and without verifying the Bank accounts, deleted the addition - The CIT(A) is not correct in observing that during the course of search, no incriminating documents were found, therefore, addition cannot be made because the order of the A.O. is in consonance with provisions of section 153A of the Act. The CIT(A) has wrongly accepted alternate contention of the assessee and allowed telescoping benefit against the profit from M/s Deepak Security of Rs.81,94,000/- - The assessee has to establish by pointing out the relevant entries that the amount of Rs.70,14,083/- is on account of profit from M/s. Deepak Security of Rs.81,94,000. The assessee has failed to furnish such reconciliation before the CIT(A) as well as before us - Onus is on the assessee as it was contention of the assessee that the amount of Rs.70,14,083/- was out of the transaction of Rs.81,94,000/- but the assessee has failed to discharge the onus by not furnishing relevant records and relevant reconciliation. As per the judgment by Hon ble Madras High Court in the case of CIT vs. Krishnaveni Ammal, 1983 (1) TMI 3 - MADRAS High Court wherein it was held that the law of evidence mandates that if the best evidence is not placed before the Court, an adverse inference can be drawn against the person who ought to have produced it - In the case under consideration, assessee were asked to furnish copies of Bank accounts but the same were not produced. In the light of the facts of the case and failure on the part of the assessee, the addition made by the A.O. while making assessment under section 153A is correct and in accordance with law Revenue appeal allowed Decided in favor of Revenue. Allowability of household expenses - A.O. made addition of Rs.88,000/- on account of house hold expenses. The CIT(A) has deleted the said addition following his orders for earlier years Held that - In the absence of any material on record in favour of the revenue, we do not find any justification to interfere with the order of the ld. CIT(A). - Decided against the revenue.
Issues Involved:
1. Addition of Rs.70,14,083/- due to unexplained cash credit under section 68 of the Income Tax Act, 1961. 2. Addition of Rs.88,000/- on account of household expenses. Detailed Analysis: 1. Addition of Rs.70,14,083/- Due to Unexplained Cash Credit Under Section 68 of the Income Tax Act, 1961: - Facts of the Case: A search operation was conducted on 28.03.2008, and during the assessment proceedings, it was noticed that there were entries of deposits totaling Rs.70,14,083/- in the assessee's bank accounts. The assessee claimed these were payments from M/s. Deepak Securities but failed to provide sufficient documentary evidence regarding the source of these payments. - AO's Findings: The Assessing Officer (A.O.) made an addition of Rs.70,14,083/- as unexplained cash credit under section 68 of the Act, citing the assessee's failure to discharge the primary onus of proving the creditworthiness of the creditor. - CIT(A)'s Decision: The Commissioner of Income Tax (Appeals) [CIT(A)] deleted the addition, stating that no incriminating documents were found during the search and that the A.O. had not provided cogent grounds based on evidence to reject the explanation. The CIT(A) emphasized that the onus of proving the source of the creditor's funds does not lie with the assessee once the identity and creditworthiness of the creditor are established. - Tribunal's Analysis: The tribunal found that the CIT(A) had not adequately verified the bank accounts or the detailed reconciliation required to substantiate the assessee's claim that the amount was part of the business transactions. It was noted that the assessee failed to provide the necessary bank statements and reconciliation to support the claim. Therefore, the tribunal held that the addition made by the A.O. was correct and restored the addition of Rs.70,14,083/-. 2. Addition of Rs.88,000/- on Account of Household Expenses: - Facts of the Case: The A.O. made an addition of Rs.88,000/- on account of household expenses. - CIT(A)'s Decision: The CIT(A) deleted the addition, following his orders for earlier years. - Tribunal's Analysis: The tribunal observed that similar additions had been deleted in previous years by the CIT(A), and these deletions had been upheld by the ITAT, Agra Bench in other cases. The tribunal followed the principle of consistency and confirmed the deletion of the addition of Rs.88,000/- by the CIT(A). Conclusion: - Ground 1: The tribunal allowed the Revenue's appeal regarding the addition of Rs.70,14,083/-, confirming the A.O.'s addition under section 68 of the Act. - Ground 2: The tribunal dismissed the Revenue's appeal regarding the addition of Rs.88,000/- on account of household expenses, confirming the CIT(A)'s deletion of this addition. - Result: The appeal of the Revenue was partly allowed.
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