2016 (3) TMI 635 - AT - Income Tax

Addition u/s 68 - undisclosed cash deposited in bank account - Held that - In the instant case though the assessee has furnished list of persons from whom he has collected advances given by the company on behalf of the company, but no confirmation letter of these persons were filed. The assessee has filed copy of the company s account to corroborate his contentions but to explain the source of deposit, the assessee is required to place evidence or confirmation of the persons who has made payment to the assessee, but no evidence was filed in this regard. Therefore, we are of the view that the assessee has not discharged his onus which primarily lay upon him to explain the source of deposit. We accordingly find ourselves in agreement with the order of the ld. CIT(A) and we confirm the same. So far as another deposit of ₹ 13.20 lakhs is concerned, we find that when the Assessing Officer has asked the assessee to explain the source of these deposits, the assessee has taken a plea that he has received this much of amount as gift from various guests at the time of his marriage. This aspect was examined by the lower authorities in the light of the human probability and came to the conclusion that the assessee does not belong to that family with such a status in which huge amount of ₹ 13.20 lakhs can be received as gift. Moreover, the assessee could not furnish any evidence with regard to the marriage performed at the relevant point of time. During the course of hearing, our attention was invited to the crucial dates on which this amount was received. The amount of ₹ 20 lakhs was deposited in the bank account of the assessee on 29.3.2010, another amount of ₹ 20,000/- was deposited on 29.3.2010 and an amount of ₹ 13 lakhs was deposited on 31.3.2010. The entire amount of ₹ 33.20 lakhs was deposited within a span of three days. During the course of hearing of the appeal the ld. counsel for the assessee was asked to furnish any evidence either in the form of photograph or invitation card with regard to the marriage of the assessee at the relevant point of time, but he could not file any evidence except oral submission. In the absence of any evidence, the story of marriage of the assessee at the relevant point of time cannot be accepted. Therefore, this addition of ₹ 13.20 lakhs can also be made under section 69 of the Act if not under section 68 of the Act relying upon the legal proposition discussed in the foregoing paragraphs. - Decided against assessee

Issues Involved:
1. Scrutiny selection by the Assessing Officer (A.O.).
2. Issuance of Notice under Section 143(2) of the Income Tax Act.
3. Additions of Rs. 20,00,000 and Rs. 13,20,000 under Section 68 of the Income Tax Act.
4. Opportunity to submit evidence.
5. Arbitrary assessment invoking Section 68.
6. Conduct of the appellant regarding cash deposits.
7. Addition of Rs. 13.20 lakhs received at the time of marriage.
8. General challenge against the facts, law, and circumstances of the case.

Issue-wise Detailed Analysis:

1. Scrutiny Selection by A.O.:
The appellant argued that the case was wrongly selected for scrutiny against CBDT guidelines. However, no specific arguments were advanced, and the Tribunal rejected this ground.

2. Issuance of Notice under Section 143(2):
The appellant contended that the notice under Section 143(2) was not issued as per legal provisions. Again, no specific arguments were made, leading to the rejection of this ground by the Tribunal.

3. Additions under Section 68 of the Income Tax Act:
The primary issues on merit involved the addition of Rs. 20 lakhs and Rs. 13.20 lakhs under Section 68 of the Income Tax Act. The A.O. observed cash deposits of Rs. 20 lakhs, Rs. 20,000, and Rs. 13 lakhs on different dates in the assessee's bank account. The assessee claimed the Rs. 20 lakhs were collected from various parties on behalf of M/s Sewa Developers (P) Ltd. but failed to provide confirmations or supporting documents. Consequently, the A.O. treated the amount as unexplained and added it to the total income.

4. Opportunity to Submit Evidence:
The appellant argued that the additions were made without providing an opportunity to submit evidence. The Tribunal noted that the assessee failed to substantiate the claims with adequate evidence, leading to the confirmation of the addition by the lower authorities.

5. Arbitrary Assessment Invoking Section 68:
The appellant claimed the A.O. arbitrarily invoked Section 68. The Tribunal found that the assessee did not maintain books of account, and the cash deposits were noted from the bank passbook. Therefore, Section 68 could not be invoked, but the addition could be made under Section 69 for unexplained deposits.

6. Conduct of the Appellant Regarding Cash Deposits:
The CIT(A) noted that the appellant's conduct was against human probabilities and deemed the story concocted. The Tribunal agreed, highlighting the lack of proper explanation and supporting evidence from the assessee.

7. Addition of Rs. 13.20 Lakhs Received at the Time of Marriage:
The appellant claimed Rs. 13.20 lakhs were received as gifts during marriage. The lower authorities and the Tribunal found this explanation implausible, noting the absence of any evidence of marriage and the improbability of receiving such a large amount in gifts. The Tribunal supported the addition under Section 69, given the lack of satisfactory explanation.

8. General Challenge Against Facts, Law, and Circumstances:
The appellant's general challenge against the facts, law, and circumstances was dismissed, as the Tribunal found no infirmity in the CIT(A)'s order.

Conclusion:
The Tribunal dismissed the appeal, confirming the additions made by the lower authorities. The appellant failed to provide sufficient evidence to explain the cash deposits, and the Tribunal upheld the application of Section 69 for unexplained income. The order was pronounced in the open court.

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