2015 (6) TMI 30 - AT - Income Tax

Addition on cash deposited in bank - Held that - In the present case, observations made in the assessment order as well as in the order of ld. CIT(A) clearly demonstrate that assessee has not been able to establish the fact that deposits of ₹ 60 lakhs were either offered as income by Smt. Baddam Kalavathy or was assessed in her hands. Even before this forum also, apart from a copy of letter dated 14/12/2011 claimed to be of Smt. Kalavathy, assessee has not been able to prove the fact that cash deposits of ₹ 60 lakhs were either offered by Smt. Baddam Kalavathy as her income or were assessed at her hands by furnishing any conclusive and cogent evidence. Thus assessee s explanation that entire amount was paid back to Smt. Baddam Kalavathy through self withdrawals is also not correct. In these circumstances, when assessee has failed to establish the fact that the cash deposits of ₹ 60 lakhs actually belonged to Smt. Baddam Kalavathy and assessed at her hand, addition, in our view, is justified - Decided against assesse.

Summary

Issues:
Addition of &8377; 60 lakhs at the hands of the assessee.

Analysis:
The appeal was against the order passed by the ld. CIT(A)-II, Hyderabad for the AY 2009-10 concerning the addition of &8377; 60 lakhs at the hands of the assessee. The assessee, a director in a company, filed her return declaring income of &8377; 4,41,636. The Assessing Officer (AO) found three bank accounts in the name of the assessee and questioned the source of cash deposits. The assessee claimed the transactions were related to another individual, Smt. Baddam Kalavathy, who confirmed this during her assessment. However, the AO added the &8377; 60 lakhs deposited in one account as unexplained income of the assessee. The ld. CIT(A) upheld this addition, stating that Smt. Baddam Kalavathy did not admit to the deposits in that specific account. The assessee argued that Smt. Baddam Kalavathy had accepted responsibility for all deposits, including the disputed amount, and should be taxed accordingly.

The Tribunal noted that while Smt. Baddam Kalavathy accepted transactions in two accounts, there was no confirmation for the third account. The burden of proof rested on the assessee to show the source of the deposits. The Tribunal found the assessee failed to provide conclusive evidence that the disputed amount belonged to Smt. Baddam Kalavathy and was assessed in her hands. The Tribunal rejected the argument that the amount was returned to Smt. Baddam Kalavathy, citing discrepancies in the bank account transactions. Relying on case law, the Tribunal upheld the addition of &8377; 60 lakhs as unexplained income of the assessee. The Tribunal found the decisions cited by the assessee factually distinguishable and upheld the order of the ld. CIT(A), dismissing the assessee's appeal.