2017 (7) TMI 1322 - AT - Income Tax

Unexplained income of assessee u/s.69 - Addition of cash deposited into savings bank account and amount deposited into current account of the assessee - HELD THAT - Section-69 makes it clear that onus is on the assessee as regards furnishing of explanation relating to deposits, which is not recorded in the books of accounts, if any, maintained by the assessee. Where the assessee offers no explanation or where the explanation offered by the assessee is not satisfactory in the AO s opinion, the value of the unexplained investments, the value of the unexplained investments would be treated as income of the financial year in question. Whenever explanation offered by the assessee were not fully relied upon by the Department, it cannot be said that the Department had any further burden to prove that this was an income of assessee. Where the assessee had failed to prove the source of investments to the satisfaction of the AO, the AO should be justified in treating the same as unexplained investment u/s.69 of the Act. In the present case, the plea of assessee is that it is the part of the undisclosed turnover and being so, only GP of such to be estimated as income of assessee. The assessee, before us, was not able to show the details of the sales made by the assessee with reference to any purchase. As rightly pointed out by the ld.D.R, all the purchases and expenditure already recorded by the assessee in its books of accounts and once the purchases and expenses were already recorded by the assessee in his books of accounts, there is no question of estimating any income. On such deposits made into bank account, the entire unaccounted deposits to be considered as unexplained income of assessee u/s.69of the Account. Another argument that Sec.285A provides only information with regard to cash deposit into SB A/c and it does not authorize the AO to collect information with reference to current account. In my opinion, addition made by the AO u/s.69 of the Act as explained earlier. Section 69 authorizes the AO to consider unexplained deposits into bank account, whenever assessee failed to explain the source of such deposits. Being so, no infirmity in the order of lower authorities and the same is confirmed. - Decided against assessee.

Summary

Issues:
Assessment of unexplained cash deposits in savings and current accounts for assessment year 2009-10.

Analysis:
The appellant, an individual earning income from a Snack Bar Business, challenged the addition of cash deposits into savings and current accounts totaling &8377; 6,01,489 and &8377; 9,40,000 respectively. The Assessing Officer (AO) noted cash deposits of &8377; 41,80,050 in the savings account and additional deposits in the current account. The AO treated the difference between the bank credits and turnover as cash credits, adding the amounts to the total income. The appellant failed to provide satisfactory explanations for the source of these deposits, leading to the additions. The Commissioner of Income Tax (Appeals) upheld the AO's decision, considering the deposits unexplained. The appellant contended that the deposits were part of disclosed turnover, arguing for estimation of only the Gross Profit (GP) on these amounts. However, the appellant could not substantiate this claim with sales details or purchases. The Tribunal noted that once purchases and expenses were recorded in the books, estimating additional income was unwarranted. The appellant also argued that the AO's action exceeded the scope of Sec.285A by considering current account deposits. The Tribunal disagreed, upholding the AO's authority under Sec.69 to treat unexplained deposits as income when the source remains unproven.

Therefore, the Tribunal dismissed the appeal, confirming the additions as unexplained income under Sec.69 of the Income Tax Act. The appellant's arguments regarding disclosed turnover and the scope of Sec.285A were deemed insufficient to overturn the lower authorities' decisions.