2014 (5) TMI 519 - AT - Income Tax

Addition u/s 68 of the Act Unexplained cash credits Admission of additional evidence - Held that - All the details and evidences has to be admitted as per Rule 46A considering the fact that appellant was prevented by sufficient cause for non-submission of such details and evidences before AO assessee has been prevented by sufficient cause for not producing these details before the AO and the same being crucial and material evidences against such addition, the same be admitted as additional evidences as per Rule 46A. The assessee has produced the details / explanation with supporting evidences in respect of each & every entry in the bank account for which the addition was made - The same were not furnished before AO during assessment proceedings therefore the same should not be admitted - The bifurcation under various heads were examined by AO in the remand report with details / explanations and supporting evidences in the form of contra account, confirmation, PAN of various parties from whom assessee received the sum in cash as well as cheque - All the evidences were found satisfactory to AO and no adverse finding or comment is offered by him in his remand report - It is after admission of additional evidence, there remains no ground for any such addition either u/s 68 or 69 of the Act - The AO is directed to delete the addition there was no reason to interfere in the order of the CIT(A) Decided against Revenue.

Issues Involved:
1. Deletion of addition of Rs. 60,04,995/- made on account of unexplained cash credit under Section 68 of the Income Tax Act.
2. Non-disclosure of a bank account in the Assessee's books of accounts.
3. Acceptance of additional evidence by the CIT(A).

Issue-Wise Detailed Analysis:

1. Deletion of Addition of Rs. 60,04,995/- Under Section 68:
The primary issue in this appeal is the deletion of an addition amounting to Rs. 60,04,995/- made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, which pertains to unexplained cash credits. The AO had initially made this addition because the assessee failed to disclose a bank account with AXIS Bank and could not reconcile the sources of deposits made in that account. The deposits included various amounts such as cash deposits, unsecured loans, advances received back, ticket charges, visa fees, cheques returned, sale of shares, FD maturity proceeds, consulting income, and miscellaneous income.

2. Non-Disclosure of Bank Account:
The AO discovered that the assessee had not shown a bank account with AXIS Bank in his books of accounts, which was revealed through AIR information. The AO made the addition after the assessee failed to provide books of accounts or reconcile the sources of deposits during the assessment proceedings.

3. Acceptance of Additional Evidence by CIT(A):
The CIT(A) admitted additional evidence under Rule 46A, considering that the assessee was prevented by sufficient cause from submitting these details during the assessment proceedings. The CIT(A) called for a remand report from the AO, who reiterated that the assessee had not furnished the details during the assessment proceedings and hence, they should not be accepted at this stage. However, the CIT(A) found the explanations and supporting evidence satisfactory and directed the deletion of the addition.

Detailed Analysis:

Cash Deposited into Bank:
The assessee explained that he was engaged in the travel booking and visa consulting business, collecting cash from customers and depositing it into the bank. The cash book and relevant vouchers were produced, which the AO found in order but objected to their late submission.

Unsecured Loans Received:
The assessee received unsecured loans from friends and relatives amounting to Rs. 12,66,000/-. Complete details, including confirmations, PAN, bank statements, and copies of returns of income, were provided. The AO did not find any discrepancies but objected to the late submission.

Advances Received Back:
The assessee provided confirmations, addresses, PAN, and bank statements for advances received back amounting to Rs. 9,17,000/-. The AO found the evidence satisfactory but objected to the late submission.

Ticket Charges & Visa Fees:
The assessee received Rs. 6,53,500/- from clients towards ticket charges and visa fees. Ledger accounts and addresses were provided, which the AO found in order but objected to the late submission.

Cheques Returned:
The assessee explained that cheques amounting to Rs. 7,31,500/- were dishonored by the bank. An affidavit and a certificate from AXIS Bank were provided. The AO did not dispute the evidence but objected to the late submission.

Sale of Shares:
The assessee received Rs. 6,27,657/- from the sale of shares through India Infoline Ltd. Contra accounts and contract notes were provided, which the AO found satisfactory but objected to the late submission.

FD Maturity:
The assessee received Rs. 1,41,319/- from the maturity of a fixed deposit with AXIS Bank. A certificate from the bank was provided, which the AO did not dispute but objected to the late submission.

Consulting Income:
The assessee received Rs. 1,72,595/- as consulting fees. Ledger accounts and bank statements were provided, which the AO found in order but objected to the late submission.

Miscellaneous Income:
A sum of Rs. 7,575/- was credited by the bank, including interest and charges reversal. The AO did not find any discrepancies.

CIT(A)'s Findings:
The CIT(A) found that the assessee was prevented by sufficient cause from submitting the details during the assessment proceedings due to negligence by the previous advocate. The CIT(A) admitted the additional evidence and found the explanations and supporting evidence satisfactory. The AO did not provide any adverse findings on the evidence submitted during the remand proceedings. Consequently, the CIT(A) directed the deletion of the addition.

Conclusion:
The Tribunal confirmed the order of the CIT(A), dismissing the Revenue's appeal. The Tribunal found no specific mistake in the CIT(A)'s order, which was passed after considering the remand report submitted by the AO. The appeal of the Revenue was dismissed, and the addition of Rs. 60,04,945/- under Section 68 was deleted.

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