2016 (1) TMI 612 - AT - Income Tax

Addition u/s. 69A - Held that - The issue in the present case is with respect to addition of cash deposits made in the bank account. We find that ld. CIT(A) has not accepted the submission of the Assessee of cash deposits to be out of the advance money on sale of land because he has noted that the land was not sold till the time of appellate proceedings and there was nothing on record to demonstrate the registration of land or of money having returned back. With respect to the addition based on the peak theory, we find that ld. CIT(A) has upheld the addition in A.Y. 06-07 but has given the credit of the addition of peak credit in A.Y. 07-08 & 08-09. Before us, ld. A.R. has not pointed out any fallacy or error in the order of ld. CIT(A). We therefore find no reason to interfere with the order of ld. CIT(A) - Decided in favour of revenue

Summary

Issues:
Appeal against CIT(A) order for A.Y. 2006-07 regarding addition of unexplained investment u/s. 69A.

Analysis:
1. The Assessee appealed against the CIT(A) order upholding the addition of Rs. 15,69,300 as unexplained investment u/s. 69A for A.Y. 2006-07. The Assessee argued that the order was illegal and against natural justice, and the CIT(A) did not consider the evidence and explanations properly.
2. The CIT(A) confirmed the addition of Rs. 15,69,300 as unexplained investment u/s. 69A, rejecting the Assessee's explanations for cash deposits. The Assessee's claim of part payment for land sale was deemed unreliable as no supporting documents were provided. The CIT(A) found the Assessee's explanations regarding cash deposits unconvincing and upheld the AO's decision.
3. The AO determined the unexplained cash deposits based on peak credit theory, concluding that the sources were not explained adequately by the Assessee. The CIT(A) upheld the addition for A.Y. 2006-07 but provided relief for subsequent years based on peak credit analysis.
4. The Assessee contended that there was an error in the peak working, but the Tribunal found no fault in the CIT(A)'s decision. The Tribunal upheld the CIT(A)'s order, dismissing the Assessee's appeal against the addition of unexplained cash deposits.
5. The Tribunal concluded that the CIT(A) correctly assessed the situation, rejecting the Assessee's explanations for cash deposits and upholding the addition under u/s. 69A. The Tribunal found no grounds to interfere with the CIT(A)'s order, leading to the dismissal of the Assessee's appeal.

This detailed analysis covers the issues raised in the appeal against the CIT(A) order for A.Y. 2006-07 regarding the addition of unexplained investment under section 69A.