2017 (6) TMI 1351 - AT - Income Tax

Unexplained cash deposits - assessee explained that amount was contributed by his brother for marriage of two daughter and out of sale proceedings of popular plants etc. - HELD THAT - The assessee has been making deposits in the bank account during the entire year. Therefore, explanation of assessee that amount was contributed by his brother for marriage of two daughter and out of sale proceedings of popular plants etc. has no relevance to the matter because assessee has been continuing in making deposit in his bank account. The source of the bank deposit has not been explained. At one stage assessee explained that withdrawals have been made out of the bank account for the purpose of incurring marriage expenses. When amounts were withdrawn for the purpose of marriage, there is no question of redeposit of the same amount in the bank account of the assessee as is contended by assessee - assessee failed to explain source of the cash deposit in the bank account to the satisfaction of the authorities below. AO has already extended sufficient benefit to the assessee for the purpose of making the addition on this issue - Assessee submitted that it being an old case, it is difficult for assessee to produce evidence or material on record to explain entire deposits in the bank account, therefore, on the face of the same submission it is clear that assessee is not in a position to explain the source of the cash deposit in the bank account. The appeal of assessee itself has no merit same is therefore dismissed.

Summary

Issues:
1. Consideration of sale of property jointly with brother for marriage expenses.
2. Non-consideration of bank withdrawals and focus on deposit entries leading to addition.

Analysis:
1. The appeal pertains to the assessment year 2009-10, where the assessee challenged the addition of ?7,28,400 made by the Assessing Officer (AO) and confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)]. The primary contention was that the sale of property jointly with the brother for ?11,51,700 was done to deposit in the bank for marriage expenses, which the AO failed to consider. The assessee argued that the addition lacked basis and the CIT(A) overlooked this aspect.

2. Upon reviewing the facts, it was found that the revenue department received information regarding cash deposits totaling ?17,75,600 in the assessee's bank account during the relevant assessment year. The AO initiated reassessment proceedings under section 147 due to unsatisfactory explanations provided by the assessee regarding the source of these cash deposits. The AO directed the assessee to explain the source of cash deposits, provide details of land holdings, agricultural income, and business operations. The assessee, along with his brothers, explained that the cash deposits were made for marriage expenses and were mainly from agricultural income. The AO, however, found a discrepancy of ?7,28,400 in the total deposits, which was considered unexplained income under section 69A of the Income Tax Act.

3. The assessee's submissions, including affidavits from brothers and explanations on agricultural income and business dealings, failed to convince the authorities. The CIT(A) upheld the addition after considering the lack of concrete evidence supporting the source of cash deposits. The Tribunal noted that the assessee's continuous bank deposits throughout the year contradicted the explanation provided, indicating a failure to substantiate the source of funds adequately. Despite the assessee's plea of difficulty in producing evidence due to the case's age, the Tribunal dismissed the appeal, emphasizing the lack of merit in the assessee's contentions.

4. The Tribunal found no grounds to interfere with the lower authorities' decisions, as the assessee's explanations lacked substantiation and failed to address the discrepancy in the cash deposits. The reliance on a previous ITAT judgment was deemed irrelevant, given the absence of material evidence supporting the assessee's claims. Ultimately, the appeal was dismissed, highlighting the assessee's inability to explain the source of cash deposits satisfactorily, leading to the addition under section 69A of the IT Act.