2019 (2) TMI 1512 - AT - Income Tax

Addition u/s 68 - Addition towards deposits in the SB accounts of Catholic Syrian Bank and SBI - assessee is basically an agriculturist, having substantial holding of land - CIT(A) was of the view that the conduct of the assessee in submitting the details and documents requisitioned by the Assessing Officer was not satisfactory - HELD THAT - CIT(A) directed the Assessing Officer to give credit for agricultural income, sale of land and past withdrawals. The assessee had also not disclosed the professional income. The assessee tried to prove source by way of personal loan from 3 people of ₹ 1 lakh each, for which he had not furnished either the confirmation or the PAN of the parties concerned. It was observed that no prudent person would take loan, when he already has substantial money with him. Since the assessee had also not expressly stated whether these were cash loans or not to explain the source of the deposits, the CIT(A) correctly doubted the genuineness of transaction -assessee had not been able to explain the sources for ₹ 3 lakhs out of ₹ 49,22,000/- deposited in various Bank accounts. - Decided against assessee Disallowance u/s. 80C - payment of tuition fees - HELD THAT - The deduction claimed u/s. 80C is to be allowed u/s. 80C(2)(xvii) of the Act which states that tuition fee/education fee paid by a parent towards education of his/her children is entitled for deduction. The assessee is entitled for deduction to the tune of ₹ 1.5 lakhs under this provision subject to the provision of section 80C(4)(c) of the Act on furnishing the requisite details. Regarding deduction u/s. 80C, the assessee has not produced any details of payment of tuition fees for the year under consideration before AO. As such, we remit this issue to the file of the Assessing Officer with a direction to the assessee to furnish the details of payment of tuition fees before the Assessing Officer and thereupon decide the same. With regard to deduction u/s. 80TTA, the assessee has also not furnished the details of interest income earned on saving Bank account. As such, we remit this issue to the file of the Assessing Officer with a direction to the assessee to provide necessary details. These grounds of appeal of the assessee are partly allowed for statistical purposes.

Summary

Issues Involved:
1. Sustenance of addition of ?49,22,000 towards deposits in the SB accounts.
2. Disallowance of ?1,10,000 under Section 80C.

Issue-wise Detailed Analysis:

1. Sustenance of Addition of ?49,22,000 towards Deposits in the SB Accounts:

The Assessing Officer (AO) called for information under Section 133(6) from Catholic Syrian Bank (CSB) and State Bank of India (SBI) regarding the assessee's bank accounts. The AO found deposits totaling ?49,22,000 on 06/03/2014 and 07/03/2014. The AO requested an explanation for the source of these cash deposits. The assessee provided a breakdown of sources, including agricultural income, sale of plantations, motor accident claim, sale of land, and loans from various individuals. However, the AO did not accept the explanation due to the lack of supporting evidence and the non-disclosure of agricultural and professional income in the return of income. Consequently, the AO treated the cash deposit of ?49,22,000 as unexplained cash credit under Section 68 of the Income Tax Act.

Before the CIT(A), the assessee reiterated the sources of cash deposits and mentioned substantial cash withdrawals from bank accounts which were re-deposited. The CIT(A) observed that the AO had not considered deposits and withdrawals made during the rest of the financial year 2013-14 and had not investigated whether the assessee was actually earning agricultural income. The CIT(A) directed the AO to give credit for agricultural income, sale of land, and past withdrawals but confirmed the addition of ?3 lakhs claimed as personal loans due to lack of confirmation or PAN of the parties concerned.

Upon appeal, the Tribunal found that the assessee had not satisfactorily explained the sources for ?3 lakhs out of ?49,22,000 deposited in various bank accounts. The Tribunal confirmed the addition made by the AO.

2. Disallowance of ?1,10,000 under Section 80C:

The assessee claimed a deduction of ?1,10,000 under Section 80C for tuition fees paid for his sons' education. The assessee provided receipts for tuition fees but had not furnished details before the lower authorities. The Tribunal noted that under Section 80C(2)(xvii), tuition fees paid by a parent towards the education of their children are eligible for deduction, subject to the provisions of Section 80C(4)(c). The Tribunal remitted the issue to the AO with a direction for the assessee to furnish the details of payment of tuition fees.

Regarding the deduction under Section 80TTA for interest earned on a savings bank account, the assessee had not provided details of interest income. The Tribunal remitted this issue to the AO as well, directing the assessee to provide the necessary details.

Conclusion:

The appeal was partly allowed for statistical purposes, and the stay petition filed by the assessee was dismissed as infructuous. The Tribunal confirmed the addition of ?3 lakhs as unexplained cash credits and remitted the issues of deductions under Sections 80C and 80TTA to the AO for further verification.