2017 (10) TMI 1358 - AT - Income Tax

Additions u/s 68 - source of cash deposit in the bank account - CIT(A) found that the bank account in which cash have been deposited is owned by three persons including the assessee. Therefore, the whole amount of should not be taxed in the hands of the assessee. - Held that - There is a cash deposit in the joint bank account maintained by assessee and others, the source of which is not explained. Therefore, provisions of Section 69/69A are clearly attracted in this case. The Ld. CIT(A) has already taken care of this issue and applied Section 69A of the I. T. Act while confirming the addition on merit. The totality of the facts and circumstances clearly prove that assessee failed to explain deposit of huge cash in the joint bank account to the satisfaction of the authorities below. The authorities below therefore, rightly rejected the contention of the assessee that amount is redeposited after making withdrawal from the same bank account. The Ld. CIT(A) on proper appreciation of the facts and material on record, correctly sustained the addition of 1/3rd amount in question under section 69A of the I. T. Act. - Decided against the assessee.

Summary

Issues:
1. Addition of ?82 lakhs under section 68/69A of the I. T. Act
2. Addition of ?60,000/- under the head "Income from other sources"

Analysis:
1. Addition of ?82 lakhs under section 68/69A of the I. T. Act:
- The assessee made cash deposits of ?82,14,000/- in a joint bank account. The explanation provided by the assessee was that the cash deposits were from a housing loan disbursed through the same account for construction purposes.
- The Assessing Officer (A. O.) found the explanation unsatisfactory as no evidence was provided to support the source of the cash deposits. The A. O. treated the cash deposits as unexplained income.
- The CIT(A) confirmed the addition but directed the A. O. to tax only 1/3rd of the amount deposited in the hands of the assessee.
- The Tribunal upheld the addition, stating that the cash deposits were unexplained and the provisions of Section 69/69A were applicable. The Tribunal rejected the contention that no addition could be made on account of the cash deposits.

2. Addition of ?60,000/- under the head "Income from other sources":
- The assessee declared an amount of ?1,50,000/- under "Income from other sources" instead of ?1,20,000/- as per the return filed.
- The A. O. added ?60,000/- based on the filed return. The CIT(A) directed the A. O. to verify the discrepancy and take necessary action.
- The Tribunal dismissed the appeal as the CIT(A) had already granted relief and directed further verification by the A. O.

In conclusion, the Tribunal upheld the additions made under section 68/69A of the I. T. Act regarding unexplained cash deposits and the discrepancy in income declaration. The Tribunal found the explanations provided unsatisfactory and supported the decisions of the lower authorities in making the additions. The appeal of the assessee was dismissed.