2017 (11) TMI 1201 - AT - Income Tax

Unexplained cash deposits in the bank account - Held that - Where any sum is found credited in the books maintained by the assessee, the primary requirements, which should be satisfied cumulatively by the assessee in such cases is identification of the person, creditworthiness of that person and the genuineness of the transaction which has not been satisfied in the instant case. The explanation offered and material submitted by the assessee in support of its explanation is not wholesome, credible and verifiable. These requirements have been examined in the instant case having regard to the human probabilities and normal course of human conduct and we find that the explanation offered by the assessee at this stage does not passes this muster and the initial onus cast on the assessee has not been satisfied. In the instant case, the Assessing Officer has also carried out necessary verification and has rightly brought to tax the unexplained cash deposits found deposited in the bank account. We have also gone through the various decisions cited by the learned authorised representative and we find that the same have been rendered in the peculiar facts and are thus distinguishable and does not support the case of the assessee. - Decided against assessee. Unexplained cheques issued - Held that - The learned Commissioner of Income-tax (Appeals) has given a finding that Shravan Kumar s bank account itself was opened on April 6, 2012 and therefore he could not have given cheques to the appellant in 2008. In response, the assessee has submitted that these cheques were made available and not issued by Shri Shravan Kumar. It was further contended that since Shravan Kumar was onward selling the land to other persons, he obtained two cheques of the above sums from those parties directly in the name of the appellant, so that his obligation of getting the cheques cleared in favour of sellers of land could be fulfilled. In our view, these are merely contentions and not supported by any credible evidence that cheques were issued by ultimate buyers directly in favour of the assessee. Further, in view of the detailed reasoning given in respect of ground No. 1 above, we affirm the order of the learned Commissioner of Income-tax (Appeals) to the extent of ₹ 15 lakhs. Regarding ₹ 1,10,491 which is claimed to be brokerage income and already offered in the return of income, the matter is set aside to the file of the Assessing Officer to examine the same and where it is found to be correct, allow the necessary relief to the assessee as the amount already offered cannot be brought to tax again. The ground of appeal of the assessee is accordingly disposed of. Capital gain computation - purchase through power of attorney - Held that - Instead of entire sale consideration, only gain on sale of land should be brought to tax in the hands of the assessee as purchase through power of attorney has been claimed to have been executed on May 19, 2007 falling in the assessment year 2008-09. The matter is accordingly set aside to the file of the Assessing Officer for determination of quantum of capital gains which can be brought to tax as per law. The ground of the assessee is disposed of accordingly. Addition of gift received - Held that - As per section 56(vii)(a), a gift of money without consideration from the wife s brother cannot be brought to tax as income in the hands of the assessee and an affidavit in this regard has been filed during the course of assessment proceedings. However, the contents of the confirmation/affidavit are not on record which can help determine the creditworthiness and genuineness of the transaction by way of gift as claimed. We accordingly confirm the order of the learned Commissioner of Income-tax (Appeals). At the same time, on a perusal of the assessment order, we find that there is no separate addition made by the Assessing Officer and the amount of ₹ 2 lakhs is part of unexplained cash deposit of ₹ 63,38,820 which has already been confirmed as discussed in ground No. 1 supra. In the light of the same, there would not be any separate addition on this account.

Issues Involved:
1. Addition of ?63,38,820 on account of unexplained cash deposits.
2. Addition of ?16,10,491 on account of unexplained cheque deposits.
3. Addition of ?31,50,000 on account of alleged income from the sale of a plot.
4. Non-acceptance of a gift of ?2,00,000 received from the brother.

Issue-wise Detailed Analysis:

1. Addition of ?63,38,820 on account of unexplained cash deposits:

The assessee filed a return declaring an income of ?1,48,340, which was assessed at ?1,12,57,130. The Assessing Officer (AO) added ?63,38,820 as unexplained cash deposits. The assessee claimed the cash was received from Shri Shravan Kumar, who purchased land through the assessee acting as a power of attorney. The AO found the affidavit from Shravan Kumar unreliable due to lack of details and delayed payments. The AO concluded the cash deposits were undisclosed income and added ?63,38,820 to the total income.

The Commissioner of Income-tax (Appeals) upheld the AO's decision, stating the appellant failed to provide a credible source for the cash deposits. The Tribunal agreed, noting the lack of verifiable evidence and inconsistencies in Shravan Kumar's statements. The Tribunal concluded the assessee did not satisfy the requirements under section 68 regarding the identity, creditworthiness, and genuineness of the transaction.

2. Addition of ?16,10,491 on account of unexplained cheque deposits:

The AO added ?16,10,491 for unexplained cheque deposits. The assessee claimed ?1,10,491 was brokerage income already declared, and ?15,00,000 were cheques from Shravan Kumar for land transactions. The Commissioner of Income-tax (Appeals) rejected this explanation, stating Shravan Kumar's bank account was opened much later, making it impossible for him to issue the cheques in 2008.

The Tribunal upheld the addition of ?15,00,000, agreeing with the Commissioner of Income-tax (Appeals) that the explanation was unsubstantiated. However, the Tribunal remanded the issue of ?1,10,491 to the AO for verification, as it was claimed to be already declared income.

3. Addition of ?31,50,000 on account of alleged income from the sale of a plot:

The AO added ?31,50,000 as the entire sale consideration for plot No. 143, Swaroop Nagar, Jagatpura, Jaipur, sold by the assessee as a power of attorney holder for Smt. Ruby Shrivastav. The AO and the Commissioner of Income-tax (Appeals) concluded the assessee was the real owner and failed to disclose the investment or cost of purchase.

The Tribunal agreed with the lower authorities but directed the AO to tax only the capital gains, not the entire sale consideration, as the purchase through power of attorney was in the assessment year 2008-09. The matter was remanded to the AO to determine the capital gains.

4. Non-acceptance of a gift of ?2,00,000 received from the brother:

The AO did not accept the gift of ?2,00,000 from Shri Babul Lal Meena, the elder brother of the assessee's wife, due to lack of evidence and non-production of the donor. The Commissioner of Income-tax (Appeals) confirmed this, noting the assessee failed to discharge the onus of proving the gift's genuineness.

The Tribunal confirmed the Commissioner of Income-tax (Appeals)'s order but noted no separate addition was made by the AO, as the amount was part of the unexplained cash deposits already confirmed. Thus, no separate addition was warranted.

Conclusion:

The Tribunal upheld the additions made by the AO and the Commissioner of Income-tax (Appeals) for unexplained cash and cheque deposits, and the sale consideration of the plot, with directions for specific verifications and adjustments. The appeal was disposed of with the above directions.

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