2017 (12) TMI 658 - AT - Income Tax

Addition on account of unexplained cash credit and unexplained money u/s 69A - Held that - AO did not bring any cogent evidence to disprove the same. We note that AO had raised a controversy about the receipt of the money from the assessee by his father. The assessee s father has categorically stated in his affidavit that he has received the amount. In respect of non-filing of return by the assessee s father for the A.Y 2009-10, we are of the view that this cannot result in any taxation in the assessee s hand because sale was agricultural land and does not attract capital gain tax. Therefore the addition of ₹ 54,20,000/- made by the AO has been rightly deleted by CIT(A). Regarding the addition of ₹ 14,00,000/-, we are of the view that assessee during the assessment proceedings had provided to the AO a copy of the sale bill in respect of the household articles of his father. The AO did not bring on record and cogent evidence to prove that sale bills of household articles are bogus. Based on the factual position, we are of the view that order passed by the CIT(A) does not contain any infirmity. Therefore, we confirm the order passed by the ld. CIT(A). Addition under the head of unexplained expenditure and addition under the head concealed income earned from security charges - Held that - AO during the assessment proceedings made his own estimate of what the assessee would have spent but we observe that the assessee had been supported by his son and his father was getting tax free pension which was sufficient to meet the family expenses. Therefore, considering the factual position, we are of the view that the order passed by the CIT(A) does not contain any infirmity. Therefore, we confirm the order passed by the CIT(A). Regarding securities charges AO treated the sum of ₹ 71,937/- as concealed income ignoring the explanation that the amount paid to security personnel had to be increased by the like amount and consequential there would be no effect on the income. We note from the remand report that the AO has not controvert the fact that payment of ₹ 71,937/- to security personnel was debited to the security service charges received account resulting in netting off of the receipts to that extent. Therefore, the assessee s explanation that if the security charges received were to be increased by ₹ 71,937/- to ₹ 2,34,473/-, the payment made to security personnel of ₹ 65,364/- was also required to be correspondingly increased by ₹ 71,937/- with no effect on the taxable income is quite acceptable and therefore, we confirm the order passed by CIT(A). Revenue appeal dismissed.

Issues Involved:
1. Addition of ?54,20,000/- under the head of unexplained cash credit u/s 68.
2. Addition of ?14,00,000/- under the head of unexplained money u/s 69A.
3. Addition of ?93,484/- under the head of unexplained expenditure.
4. Addition of ?71,937/- under the head of concealed income earned from security charges.

Issue-wise Detailed Analysis:

1. Addition of ?54,20,000/- under the head of unexplained cash credit u/s 68:
The Assessing Officer (AO) added ?54,20,000/- under section 68 of the Income Tax Act, treating it as unexplained cash credit. The assessee explained that the amount was the sale proceeds of agricultural land and crops belonging to his father, Hardev Singh Kler. The AO doubted the genuineness of the sale deeds, the cash deposits, and the lack of evidence regarding agricultural crops and household goods transactions. The CIT(A) deleted the addition, noting the decorated military background of the assessee's father and the submission of sale deeds and affidavits. The Tribunal upheld the CIT(A)'s decision, stating that the certified copies of sale deeds from the Additional District Sub-Registrar, Khanna, were acceptable, and the AO did not bring any cogent evidence to disprove the assessee's claims.

2. Addition of ?14,00,000/- under the head of unexplained money u/s 69A:
The AO added ?14,00,000/- under section 69A, treating it as unexplained money credited in the bank account. The assessee explained that this amount was part of the sale proceeds of his father's household goods, including silver. The CIT(A) deleted the addition, accepting the sale bill and the affidavit of the assessee's father. The Tribunal upheld the CIT(A)'s decision, noting that the AO did not provide any evidence to disprove the sale bills and that the explanation provided by the assessee was reasonable.

3. Addition of ?93,484/- under the head of unexplained expenditure:
The AO added ?93,484/- under section 69C, citing low household drawings by the assessee. The CIT(A) deleted the addition, accepting the assessee's explanation that he was supported by his son and received a tax-free pension. The Tribunal upheld the CIT(A)'s decision, noting that the AO's estimate of the assessee's expenditure was unreasonable given the support from his son and the pension income.

4. Addition of ?71,937/- under the head of concealed income earned from security charges:
The AO added ?71,937/- as concealed income, noting a discrepancy in the security service charges received and the payments made to security personnel. The CIT(A) deleted the addition, accepting the assessee's explanation that the amount paid to security personnel was debited to the security service charges received account, resulting in no effect on the taxable income. The Tribunal upheld the CIT(A)'s decision, noting that the AO did not provide any evidence to disprove the assessee's explanation.

Conclusion:
The Tribunal dismissed the Revenue's appeal, confirming the CIT(A)'s order to delete the additions under sections 68, 69A, 69C, and the head of concealed income from security charges. The Tribunal found no infirmity in the CIT(A)'s order and upheld the assessee's explanations and evidence provided.

← Previous Next →