2017 (3) TMI 431 - AT - Income Tax

Unexplained credit in bank deposit - Held that - As based on the AIR information, the AO found cash deposits to the tune of ₹ 27,04,907/- with Axis Bank for acquiring bonds/debentures in the Financial Year relevant to Assessment Year 2008-09. We find that the CIT(A) has examined the issue in perspective and has granted partial relief thereon. The order of the CIT(A) appears reasoned and plausible. In the absence of any rebuttal from the assessee, we are not inclined to interfere with the findings of the CIT(A). - Decided against assessee

Summary

Issues:
Confirmation of addition of unexplained credit in bank deposit.

Analysis:
The appeal was against the Commissioner of Income Tax(Appeals)'s order confirming the addition of unexplained credit in bank deposit. The appellant did not attend the hearing, leading to the proceeding being ex-parte. The Assessing Officer (AO) and the CIT(A) both discussed the issue of unexplained cash deposits in detail. The AO added the entire deposit in the bank account as undisclosed income, while the appellant claimed to be working as an agent for financial investors, offering commission for taxation. However, the AO found discrepancies in the appellant's explanations and rejected his claims. The CIT(A) partially allowed the appeal, considering the cash and cheque deposits, ultimately holding a specific amount as unexplained credit from undisclosed sources.

The CIT(A) analyzed the appellant's submissions and the bank statements, noting the lack of evidence supporting the appellant's claims regarding the cash deposits and commission income. The appellant failed to provide details of investors or documentary evidence, leading to the rejection of his plea to estimate commission income. The CIT(A) also addressed the appellant's alternative plea regarding the peak credit in the bank account, emphasizing the need for proper documentation and proof of transactions for any benefit to be allowed. The CIT(A) concluded that only the cash deposits could be considered for rotation, while the cheque deposits were treated as unexplained cash credits.

Based on the CIT(A)'s detailed examination and reasoning, the ITAT upheld the partial relief granted by the CIT(A) and dismissed the appeal ex-parte due to the appellant's non-appearance. The decision was based on the evidence presented, including the bank statements and explanations provided by the appellant and the authorities. The ITAT found the CIT(A)'s order to be well-founded and declined to interfere in the absence of any counterarguments from the appellant. The judgment highlighted the importance of substantiating claims with proper documentation and addressing discrepancies to avoid adverse conclusions in tax matters.