2016 (7) TMI 1655 - AT - Income Tax

Addition treating the entire tax credit as undisclosed income - HELD THAT - There is no dispute that the assessee has not proved to have actually conducted any retail business in the relevant previous year. His stand throughout except to the extent of revised statement not accepted has been that his source of income is only salary. Learned counsel strongly argues that the assessee has been carrying out retail saree business so as to be eligible for peak credit addition amount only. We put a specific query as to whether any evidence is available in support of this retail business plea. Learned counsel fails to place reliance any documentary evidence forming part of the case file in this regard. We agree with the CIT(A) in this peculiar backdrop of facts that the assessee s revised statement is liable to be rejected. It is made clear that there is no argument on assessee s part qua his latter substantive ground. Nor is there any evidence or legal plea raised to controvert the CIT(A) s findings on enhancement issue. We find no reason to interfere with the order of the CIT(A). Assessee appeal dismissed.

Summary

Issues involved:
1. Enhancement of addition made by the Assessing Officer.
2. Directions issued by the CIT(A) under sections 150(1) and 148 of the Income Tax Act.

Issue 1: Enhancement of addition made by the Assessing Officer:
The assessee appealed against the CIT(A)'s decision to treat the entire tax credit of Rs. 1,613,588 as undisclosed income instead of granting relief for specific amounts related to peak credit and cash deposits in the bank account. The Assessing Officer had added a peak amount of Rs. 143,601 along with 20% of the gross cash deposit, totaling Rs. 466,318, to the assessee's income. The CIT(A) issued an enhancement notice under section 251(1)(aa) stating that the Assessing Officer did not adopt the correct peak addition figure. The CIT(A) examined the validity of the assessee's revised return and found discrepancies, leading to the reversal of the Assessing Officer's decision. The CIT(A) directed the Assessing Officer to initiate section 148 proceedings for the relevant assessment years to examine the source of cash deposits in the bank account.

Issue 2: Directions issued by the CIT(A) under sections 150(1) and 148 of the Income Tax Act:
The CIT(A) observed that the appellant had made significant cash deposits in the bank account over the years without any other apparent source of income besides salary and interest income. The CIT(A) found the appellant's submissions unsupported by evidence, treating the entire cash deposit of Rs. 1,613,588 as undisclosed income and enhancing the addition made by the Assessing Officer. The CIT(A) directed the Assessing Officer to issue a demand notice accordingly and take action under section 148 for the specified assessment years. The CIT(A) dismissed the appeal, confirming the enhancement of the addition and the directions issued under sections 150(1) and 148 of the Income Tax Act.

In conclusion, the Appellate Tribunal upheld the CIT(A)'s decision to enhance the addition made by the Assessing Officer and issue directions under sections 150(1) and 148 of the Income Tax Act. The assessee's appeal was dismissed, affirming the treatment of the entire cash deposit as undisclosed income and the initiation of proceedings for the specified assessment years.