2018 (3) TMI 967 - HC - Income Tax

Addition u/s 69 - unexplained cash - benefit of re-deposit of cash - Held that - Tribunal re-appreciated the evidence and concluded that though the authorities below have given the benefit of ₹ 3 lakh of re-deposit of cash but have not considered that during the previous years, the appellant would have accumulated funds, for which a further benefit of ₹ 5 lakh was given. The Tribunal came to the conclusion that there was no specific evidence to support the opening balance of ₹ 8,86,639/- as on 01.04.2010. The evidence was not there to explain the cash deposits made to the tune of ₹ 23,39,420/- There was nothing on record to support the fact that the amounts withdrawn from the salary account were re-deposited. The FDRs of the appellant indicated that he was intelligently investing the amount with the bank. The benefit of re-deposits and of accumulated funds for the previous year has already been given. The question raised is a question of fact, as the issue is only regarding appreciation of evidence. No interference is called for in the findings recorded by the Tribunal affirming the addition Addition for cash deposited in joint bank account - Held that - The question raised is one of fact. Addition made was on appreciation of facts. The appellant kept on denying that he had any joint account with his grand-father. His claim that his name was added in the account only for helping his old maternal grand-father for operating the account is belied by the fact that the ration card produced showed that Shri Om Parkash was staying with his two sons who could have helped him for operating the account. Shri Om Parkash had his own PAN number, yet PAN number of the appellant was mentioned in the bank account. The explanation furnished by the appellant that Shri Om Parkash was partner in M/s Om Parkash Sunder Lal B.K.O was of no help, as no income tax returns of the B.K.O were placed on record. There was no evidence to show that the said capital was ever received by Shri Om Parkash. Reliance was placed on a self serving capital account prepared but the appellant failed to establish that Shri Om Parkash had any other source of income, except the rental income of ₹ 3,630/- per month. No question of law. Rejecting additional evidence having substantive effect - Held that - No such application was moved before the Tribunal for permitting production of additional evidence. Even otherwise, the capital account of Shri Om Parkash was a self serving document prepared without any basis. The said capital account showed opening balance of ₹ 8,50,528/-, for which there was no source or basis. The appellant failed to give any reason as to why these documents could not be produced earlier. - Decided against assessee

Summary

Issues:
1. Justification of addition of ?15,49,420/- by ITAT without appreciating cash-in-hand available and doubting the veracity of cash book.
2. Justification of addition of ?14,40,000/- in joint account with grandfather without appreciating various evidences.
3. Dismissal of appeal by ITAT ignoring well-settled law in Tek Ram case.
4. Perversity in ITAT order and lack of proper appreciation of facts.

Analysis:

Issue 1:
The appellant contested the addition of ?15,49,420/- by ITAT, arguing lack of appreciation for cash-in-hand and cash book veracity. The appellant explained cash deposits from salary earnings, but failed to prove cash withdrawals were deposited in the bank account. CIT (A) dismissed the appeal after considering additional evidence. The Tribunal found no specific evidence supporting the opening balance and cash deposits, concluding that the appellant failed to explain the transactions adequately. The Tribunal's decision was based on factual appreciation, and no interference was warranted.

Issue 2:
Regarding the addition of ?14,40,000/- in the joint account with the grandfather, the appellant denied the account's existence initially. Despite producing additional evidence before CIT (A), the appellant failed to substantiate the source of cash deposits. The Tribunal upheld the addition, noting discrepancies in the appellant's claims and evidence. The Tribunal's decision was deemed logical, as the appellant's explanations were found lacking, and no interference was warranted under Section 260-A.

Issue 3:
The appellant raised concerns about the dismissal of additional evidence by ITAT, without a formal application for its submission. The self-serving capital account of the grandfather lacked a proper basis and failed to establish the source of funds. Given the outcomes of Issues 1 and 2, the rejection of additional evidence was deemed reasonable, and no perversity was established. The Tribunal's conclusions were upheld as logical, and the appellant's failure to provide a valid reason for late submission of documents was noted.

Issue 4:
The overall appeal was dismissed, with the Court ruling against the appellant on all raised questions. The judgment emphasized the importance of factual appreciation by the authorities, highlighting the logical conclusions reached by CIT (A) and ITAT. The Court found no grounds for interference under Section 260-A, affirming the Tribunal's decision as legally sound and based on factual assessments.

In conclusion, the High Court upheld the ITAT's decision, emphasizing the significance of evidence and factual appreciation in tax assessment matters. The judgment underscores the need for proper substantiation of claims and sources of income to avoid additions based on suspicion or lack of evidence.