2017 (9) TMI 814 - AT - Income Tax

Unexplained cash deposits in the bank account - increased gross receipts - Held that - It is an admitted fact that assessee maintained bank account with Bank of Rajasthan Limited, Kalkaji, Delhi in which unexplained cash deposits were found and for three months assessee could not offer any explanation before the authorities below. The assessee very cleverly tried to revise the gross receipts to ₹ 25,01,020 against gross receipts of ₹ 9,25,570 declared in the return. No basis or evidence was furnished as to how the receipts have been increased without any justification. No revised return was also filed. It, therefore, appears assessee increased gross receipts just to explain the cash deposited in the bank account which assessee has failed to explain before the authorities below. There is thus, no justification to interfere with the orders of the authorities below. Income accumulation with the son of the assessee - Held that - The annual income of son of assessee was found very low and it was also not supported by any evidence. His son started filing return of income when he just passed Senior Secondary Examination. The story propounded by assessee is also not acceptable because for the last 07 years if the son of assessee was having cash amount with him, why he was not deposited same in the bank account and why the cash of ₹ 8 lakhs have been given to the assessee in assessment year under appeal for depositing in cash in the joint account maintained by assessee and his son. It is also not believable that a person who was earning would not make any drawings and withdrawal for personal purpose. The Ld. CIT(A) was, therefore, justified in enhancing the income by ₹ 8 lakhs particularly when the second bank account maintained by assessee with Andhra Bank was not disclosed to the A.O. at the assessment stage. If assessee was having any lawful source to make deposit in Andhra Bank, there were no reason for him to conceal this bank account from the A.O. at the assessment stage. Therefore, assessee has created an afterthought story to explain the cash deposited in the Andhra Bank account. No evidence has been filed on record to explain the source of the cash deposited in the bank account maintained by assessee. Further, assessee has not raised any of the grounds of appeal to challenge both the additions. Therefore no evidence to explain the source of the cash deposits in the bank accounts of the assessee, no interference is called for in the matter. - Decided against assessee.

Summary

Issues Involved:
1. Unexplained cash deposits in the bank account.
2. Enhancement of income by the CIT(A).
3. Deduction under section 80C of the I.T. Act.

Issue-wise Detailed Analysis:

1. Unexplained Cash Deposits in the Bank Account:
The assessee filed a return of income declaring ?1,09,610 but had made cash deposits of ?11,04,100 in the S.B. account with Bank of Rajasthan Ltd. The A.O. asked for the source of these deposits. The assessee provided details of the capital account and other financial transactions but did not maintain books of account. The A.O. noted discrepancies and treated ?3,59,900 as unexplained income under section 69A of the I.T. Act, leading to an addition and computation of total income at ?4,69,510. The CIT(A) confirmed this addition, and the Tribunal upheld the decision, noting that the assessee failed to justify the increased gross receipts and did not file a revised return. The Tribunal found no basis or evidence for the revised gross receipts and dismissed the appeal.

2. Enhancement of Income by the CIT(A):
The CIT(A) enhanced the income by ?8 lakhs, noting another undisclosed bank account with Andhra Bank where cash deposits of ?5.50 lakhs and ?2.50 lakhs were made. The assessee claimed these were from his son's savings, but the CIT(A) found the explanation implausible due to the son's low annual income and lack of evidence. The Tribunal agreed, emphasizing that the son’s income was insufficient to accumulate ?8 lakhs and the story was an afterthought to explain the deposits. The Tribunal noted the concealment of the Andhra Bank account and upheld the enhancement, dismissing the appeal.

3. Deduction under Section 80C of the I.T. Act:
The assessee claimed a deduction under section 80C, but this issue was not raised before the authorities below, and no grounds were presented. The Tribunal dismissed this ground, noting the absence of any finding in the impugned orders.

Conclusion:
The Tribunal dismissed the appeal, confirming the additions of ?3,59,900 and ?8 lakhs due to unexplained cash deposits and the failure to provide credible evidence. The claim for deduction under section 80C was also dismissed due to procedural lapses. The Tribunal found no justification to interfere with the orders of the authorities below.