2015 (6) TMI 892 - AT - Income Tax

Income from undisclosed sources - CIT(A) deleted the addition - source of cash of ₹ 13.01 lac deposited by the assessee in his bank account, which was claimd to have been received from the estate of Smt. Saroj Gupta, his mother, who passed away on 14.8.2006 as per assessee - Held that - All the circumstances in the case prove it beyond any shadow of doubt that there was no cash in hand available as Istridhan on the death of Smt. Saroj Gupta that was bequeathed by the assessee to the tune of ₹ 13.01 lac. Except for a bald claim of finding cash of ₹ 15.06 lac on the sudden opening of the almirah on the death of Smt. Saroj Gupta, there is no evidence about the source of the availability of cash to such a huge extent in her hands. In our considered opinion, the assessee just concocted a story of inheriting cash from his mother after her death. We are reminded of the judgment of the Hon ble Supreme Court in the case of CIT vs. Durga Prasad More (1971 (8) TMI 17 - SUPREME Court). In this case, it has been held that self serving recitals cannot be accepted as true unless the assessee proves it. In this case, the assessee tendered an explanation that she got the amounts from horse races, which was not accepted by the ITO who came to hold that the winning tickets were purchased by the assessee after the event. Upholding the view taken by the AO, the Hon ble Supreme Court held that for considering whether the apparent is real, the matter should be considered by applying the test of human probabilities. Viewed from that angle, the Hon ble Summit court upheld the view canvassed by the AO that the explanation of the assessee was not genuine. In our considered opinion, the entirety of facts and circumstances prevailing in the instant case do lead to an irresistible conclusion that there was no cash available with Smt. Saroj Gupta at the time of her death and the assessee was not justified in claiming that a sum of ₹ 13.01 lac was bequeathed from his mother. We, therefore, overturn the impugned order on this score and restore the opinion of the AO. - Decided in favour of revenue.

Summary

Issues:
Deletion of addition of Rs. 13,01,000 made by the Assessing Officer.

Analysis:
The appeal pertains to the deletion of an addition of Rs. 13,01,000 by the Assessing Officer (AO) concerning a cash deposit in a bank account. The assessee claimed to have inherited this amount from his deceased mother. The AO observed discrepancies in the evidence provided by the assessee regarding the source of the cash deposit. The AO made the addition as 'Income from undisclosed sources,' which was later deleted by the CIT(A). The main issue revolves around the genuineness of the claimed inheritance and the availability of cash with the deceased. The AO questioned the existence of such a substantial amount of cash, considering the deceased's financial activities and investments.

The Tribunal analyzed the facts and circumstances, emphasizing the lack of direct evidence supporting the availability of cash with the deceased. The Tribunal questioned the plausibility of a wise investor like the deceased keeping a significant amount of cash idle. The assessee's attempt to prove the cash's availability through the executor of the will was deemed questionable, especially given the familial relationship and timing of the discovery. The Tribunal found discrepancies in the explanation provided by the assessee regarding the timing of the cash receipt and attempted to evade wealth tax obligations.

Referring to relevant case law, the Tribunal highlighted the importance of proving claims and assessing the reality of situations based on surrounding circumstances. Citing precedents, the Tribunal emphasized the need to apply the test of human probabilities to determine the genuineness of explanations. In this case, the Tribunal concluded that the evidence and circumstances pointed towards the concoction of an inheritance story by the assessee. Consequently, the Tribunal overturned the CIT(A)'s decision and reinstated the AO's opinion, allowing the appeal and upholding the addition of Rs. 13,01,000.

In conclusion, the Tribunal's decision focused on the lack of concrete evidence supporting the claimed inheritance and highlighted inconsistencies in the assessee's explanations. The judgment underscored the importance of substantiating claims with tangible proof and assessing the credibility of explanations based on the surrounding context.