2013 (12) TMI 644 - AT - Income Tax

Unexplained cash deposits - Held that - The assessee has reflected the bank statement in his balance sheet as well as return of income - Every cash deposit made in the disputed savings bank account of the assessee was immediately withdrawn for the purpose of purchasing the demand drafts in the name of Indian Oil Corporation Limited - All the demand drafts were purchased in favour of Indian Oil Corporation Limited and they were all purchased for the purpose of running the fuel station - The assessee has explained the nature of these cash deposits found in the savings bank account maintained by the assessee Decided against Revenue. Unexplained investment in jewellery Held that - The CIT(A) has granted sufficient relief to the assessee by accepting all the plausible explanations offered by the assessee - The assessee is again bringing some grounds against the confirmation of some quantity of gold jewellery as unaccounted, not on the basis of any evidence, but by way of pleadings Decided against assessee.

Summary

Issues:
1. Unexplained cash deposits in the savings bank account for the assessment year 2004-05.
2. Addition of unexplained gold jewellery in the assessment year 2007-08 for both the assessee and his wife.

Issue 1: Unexplained cash deposits in the savings bank account for the assessment year 2004-05:
The case involved the addition of Rs. 12,99,304 as unexplained cash deposits in the assessee's savings bank account. The Assessing Officer rejected the explanation provided by the assessee that the deposits were used to purchase demand drafts for Indian Oil Corporation. The Commissioner of Income-tax(Appeals) examined the issue and found the explanations valid, supported by Mr. Senthilnayagam's affidavit. It was noted that no bank branch was available near the fuel station managed by Mr. Senthilnayagam, justifying the deposits. The Commissioner deleted the addition, emphasizing that all cash deposits were used to purchase demand drafts for the corporation. The ITAT upheld the Commissioner's decision, stating that the assessee had disclosed the account details and explained the purpose of the deposits, supported by bank statements and other evidence.

Issue 2: Addition of unexplained gold jewellery in the assessment year 2007-08 for both the assessee and his wife:
In the assessment year 2007-08, the assessee and his wife faced an addition of unexplained gold jewellery. The ITAT detailed the calculations of the jewellery allocation, deductions made, and the final unexplained quantities. Despite deductions granted by the lower authorities, the Commissioner of Income-tax(Appeals) confirmed additions for both the assessee and his wife. The ITAT reviewed the records and found no evidence to support the plea against the unexplained jewellery. The ITAT upheld the Commissioner's decision, stating that there was no basis for interference. Both appeals by the assessee and his wife were dismissed.

In conclusion, the ITAT dismissed all appeals filed by the assessees and the Revenue, upholding the decisions made by the Commissioner of Income-tax(Appeals) regarding the unexplained cash deposits and gold jewellery additions.