2017 (5) TMI 1156 - AT - Income Tax

Unexplained cash credit - Held that - As rightly held by the Ld. CIT(A) that the assessee has discharged her onus in respect of amounts received from her husband and Mr. Rajesh Gautam. However, in respect of Ms. Sonia Bassi no confirmation has been filed. Therefore it cannot be said that the assessee has discharged her preliminary onus on this entry. Considering all the factors, we are of the considered view that Ld. CIT(A) s action in confirming the addition of ₹ 18 lacs was relating to Ms. Sonia Bassi as unexplained since no confirmation has been filed either at the assessment stage or at the appeal stage. The balance addition made under this head was rightly deleted, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the addition in dispute and dismiss the ground no. 1 raised by the Revenue. Unexplained investment in jewellery - Held that - Even in the absence of documentary evidences it cannot be completely denied that there could be increase in the value of the jewellery held by the assessee due to appreciation in the price of gold. The standard gold rate was ₹ 12,280/- for 10 gms of 24 carat gold as on 31.03.2008 which, had increased to ₹ 15,105/- for 10 gms of24 carat gold. Thus there is increase in the price of gold during the financial year 2009-10 by about ₹ 2,825/- which comes to 23% on the price prevailing as on 01.04.2008. However, the assessee has shown increase in the total value of jewellery by almost 42% (Rs.3,70,121 ₹ 89,40,67 x 100) which definitely is on the higher side. Further, the assessee has failed to submit any documents in this regard. The AO also does not seems to have taken up assessment of Wealth Tax of the appellant. In this background, Ld. CIT(A) has rightly held that the addition is restricted to ₹ 1,50,000/- and the balance is deleted and directly the AO to restrict the addition on this issue to ₹ 1,50,000/- only, which which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the addition in dispute and accordingly, the dismiss the ground no. 2 raised by the Revenue Unaccounted income - Held that - The confirmations bear PAN of the lenders. The transactions have been routed through banking channels. In this background Ld. CIT(A) has rightly observed that the AO is required to proceed against the lenders if they were found to be without adequate source justifying the loans. During the assessment proceedings very little has been done by the AO to transfer the onus back to the assessee if he was not satisfied with any matter. There are no evidences to show that he wanted to assessee to lead further evidences to satisfy any of his doubts. In this background the Ld. CIT(A) has rightly deleted the addition of ₹ 1,28,89,000/- made as unaccounted income of the assessee, which does not need any interference on our part - Decided against revenue

Issues Involved:
1. Deletion of addition on account of unexplained cash credit.
2. Deletion of addition on account of unexplained investment in jewelry.
3. Confirmation of addition on account of unexplained credit.
4. Confirmation of ad-hoc addition on account of unexplained investment in jewelry.

Issue-wise Detailed Analysis:

1. Deletion of Addition on Account of Unexplained Cash Credit (AY 2009-10):
The Revenue challenged the deletion of ?58,79,021/- on account of unexplained cash credit. The Tribunal noted that the Assessing Officer (AO) had added ?76,79,021/- as unexplained cash credits under section 68 of the Income Tax Act, 1961, which included ?58,79,021/- from the assessee's bank account. The CIT(A) found that most of the entries were transactions with the assessee's husband, duly reflected in both their accounts. The CIT(A) confirmed the addition of ?18,00,000/- related to Ms. Sonia Bassi due to lack of confirmation. The Tribunal upheld the CIT(A)'s decision, noting that the assessee had discharged the onus for most transactions, except for the one involving Ms. Sonia Bassi.

2. Deletion of Addition on Account of Unexplained Investment in Jewelry (AY 2009-10):
The AO added ?3,70,121/- as unexplained investment in jewelry, noting a rise in the value of jewelry in the Wealth Tax return. The assessee argued that the increase was due to the appreciation of gold prices. The CIT(A) found no documentary evidence to support this claim but acknowledged a possible increase due to gold price appreciation. The CIT(A) restricted the addition to ?1,50,000/- and deleted the balance. The Tribunal upheld this decision, agreeing with the CIT(A)'s rationale.

3. Confirmation of Addition on Account of Unexplained Credit (AY 2010-11):
The Revenue challenged the deletion of ?1,28,89,000/- added as unexplained cash credits. The AO had noted the absence of details to explain the credits. The CIT(A) found that the assessee had provided confirmations, ITR copies, and bank statements of the lenders, which the AO did not consider. The Tribunal agreed that the AO should have pursued the lenders if their sources were inadequate, and upheld the CIT(A)'s deletion of the addition.

4. Confirmation of Ad-hoc Addition on Account of Unexplained Investment in Jewelry (AY 2010-11):
The AO added ?43,34,185/- as unexplained investment in jewelry. The CIT(A) found that the assessee had provided details of the jewelry owners and their wealth tax returns. The Tribunal noted that the AO did not take further steps to verify these claims and upheld the CIT(A)'s decision to delete the addition.

Conclusion:
The Tribunal dismissed both the Revenue's and the Assessee's appeals, upholding the CIT(A)'s decisions. The Tribunal found that the assessee had largely discharged the onus of proof regarding the unexplained cash credits and investments in jewelry, except for specific instances where confirmations were lacking. The Tribunal emphasized the need for the AO to pursue further verification where initial evidence was provided. The judgments were delivered in a consolidated manner for convenience, addressing the common issues across the assessment years 2009-10 and 2010-11.

← Previous Next →