2012 (5) TMI 801 - AT - Income Tax

Summary

Issues involved: Addition of agricultural income, addition of estimated household expenses, addition of cash deposit in bank account, addition of unaccounted bank interest.

Addition of Agricultural Income: The assessee credited &8377; 34,000 to his capital account as "Agricultural income," but only declared &8377; 15,000 as net agricultural income. The Assessing Officer added the remaining &8377; 19,000 as the source was unexplained. The CIT(A) upheld the addition of &8377; 34,000. The Tribunal found that no enhancement notice was issued for the added &8377; 15,000, thus it cannot be sustained. The addition of &8377; 19,000 was upheld. This ground was partly allowed.

Addition of Estimated Household Expenses: The Assessing Officer added &8377; 2,00,000 as estimated household expenses due to insufficient withdrawals for personal and household expenses. The CIT(A) upheld this addition based on the family composition and lack of justification for the low amount available for household expenses. The Tribunal found the addition justified based on the total withdrawals and family expenses. This ground was not allowed.

Addition of Cash Deposit in Bank Account: The assessee deposited &8377; 5 lakh in his bank account claiming it was a loan from the bank. The Assessing Officer treated it as unexplained cash credit. The CIT(A) upheld the addition. The Tribunal noted that the amount withdrawn and deposited matched, and the assessing authority failed to prove misuse of the funds. The addition was not justified, and this ground was allowed.

Addition of Unaccounted Bank Interest: The assessee paid &8377; 56,606 as bank interest, which was unaccounted for and not utilized for business. The Assessing Officer made an addition for this amount, which was upheld by the CIT(A). The Tribunal found no evidence to support why the interest was not recorded, thus upholding the addition. This ground was not allowed.

Conclusion: The appeal was partly allowed, with the addition of agricultural income partially sustained, estimated household expenses upheld, cash deposit addition reversed, unaccounted bank interest addition upheld, and another addition not pressed and dismissed.