2018 (11) TMI 510 - AT - Income Tax

Unexplained investment - Held that - CIT(A) perused the bank statements filed by assessee and was in agreement with the grievance raised by assessee of there being double addition as the source of sum of the investments were out of withdrawals from the same bank which was already added as unexplained cash under section 68 of the Act. Assessee explained source of cash deposit, amounting to ₹ 68,63,000/-, which has been dealt with by Ld.CIT(A) - Decided in favour of assessee.

Summary

Issues Involved:
1. Validity of the order of the Ld. CIT(A).
2. Deletion of the addition of unexplained investment in Noida plot.
3. Acceptance of the assessee's plea regarding receipt of rent.
4. Acceptance of the assessee's plea regarding receipt from M/s Om Dairy.
5. Deletion of the addition of household expenses.

Detailed Analysis:

1. Validity of the order of the Ld. CIT(A):
The revenue contended that the order of the Ld. CIT(A) is "bad in law and not in consonance with the facts of the case." However, this ground was deemed general in nature and did not require adjudication.

2. Deletion of the addition of unexplained investment in Noida plot:
The Ld. CIT(A) had sustained the addition concerning the unexplained investment amounting to ?58,63,750/-. The Tribunal observed that this ground does not arise out of the order passed by the Ld. CIT(A) and accordingly dismissed this ground.

3. Acceptance of the assessee's plea regarding receipt of rent:
The Ld. CIT(A) accepted the assessee's explanation for part of the cash deposits as rental income amounting to ?4,32,000/-. However, the claim of receiving an advance rent of ?2,64,000/- was not supported by evidence and was therefore not accepted. The Tribunal found the approach of the Ld. CIT(A) correct and did not interfere with this finding.

4. Acceptance of the assessee's plea regarding receipt from M/s Om Dairy:
The Ld. CIT(A) accepted the assessee's explanation for the cash deposit of ?4,26,420/- from the sale of dairy products to M/s Om Dairy. However, the balance amount of ?3,23,580/- was not substantiated with evidence and thus was not accepted. The Tribunal upheld the findings of the Ld. CIT(A) on this issue.

5. Deletion of the addition of household expenses:
The Ld. CIT(A) deleted the addition of ?5,00,000/- made by the Assessing Officer for low household withdrawals, considering the evidence of rental income and dairy business income provided by the assessee. The Tribunal found no infirmity in this finding and upheld the deletion.

Conclusion:
The Tribunal upheld the order of the Ld. CIT(A) and dismissed the appeal filed by the revenue. The grounds raised by the revenue were dismissed, and the relief granted by the Ld. CIT(A) to the assessee was found to be justified based on the verification of documents and evidence provided. The appeal by the revenue was dismissed in its entirety.