2019 (3) TMI 1026 - AT - Income Tax

Unexplained investment - lottery coupons found in possession in search - No explanation to whom it belongs - HELD THAT - We find that 120 coupons are in possession of the assessee for which the assessee has not given any explanation. It is a fact that if anyone invests more than ₹ 5000/- in Rajasthan State small savings scheme, one coupon will be issued. Therefore, it can be safely concluded that the assessee is having with him 120 coupons and he ought to have invested ₹ 6 lakhs, otherwise the Rajasthan Government, Department of Small Savings cannot issue a single coupon without investment. We find that there is a proximity between the coupons and investment. Under these above facts and circumstances of the case, we are of the opinion that the A.O. has rightly given the conclusion that the assessee has invested ₹ 6 lakhs and received 120 coupons. - Decided against assessee Undisclosed investment - Investment in PNB & SBI mutual funds - income from undisclosed sources - Income on substantive basis in case of legal descendant of late Smt. Rozina Kumawat on protective basis - assessee relied mutual funds are purchased by mother of her husband Shri Nirmal Kumrawat in the name of Smt. Rozina Kumrawat. The same is shown in the return of income of the assessee s mother Smt. Rozina Kumrawat - HELD THAT - In so far as the investment in respect of PNB Principal Asset Management Fund is concerned, The assessee has failed to explain source of the investment of his mother. He has only simply said that his mother has invested in his name. The Ld. CIT(A) confirmed the order of the A,O. In this case, the assessee failed to discharge the burden cast upon him by producing the relevant material that his mother has made an investment - assessee appeal is dismissed. In so far as investment made in SBI Mutual funds in the name of Smt. Marry Rozina Kumrawat, wife of the assessee is concerned, it was submitted that the assessee s mother has purchased the units in the name of the assessee s wife Marry Rozina Kumrawat. Neither before the A.O. nor before the Ld. CIT(A) the assessee is able to substantiate that the his mother is having sufficient funds to purchase the units. Therefore, both the A.O. and Ld. CIT(A) disbelieved the investment made by his mother and addition is made in the hands of the assessee. Even before us, assessee failed to discharge burden cast upon him to show that investment was actually made by his mother - assessee appeal is dismissed. Cash deposits in bank account - HELD THAT - The assessee has not placed any material to substantiate that there is a sufficient source to deposit in the bank account of ₹ 1,48,000/-. Therefore, by considering the entire facts and circumstances of the case, we find no error in the order passed by the Ld. CIT(A). This ground of the assessee is dismissed - assessee appeal is dismissed.

Summary

Issues:
1. Addition of ?6 lakhs in assessment year 2004-05 due to unexplained lottery coupons.
2. Addition of ?45,000 in various assessment years related to undisclosed investments.

Analysis:

Issue 1: Addition of ?6 lakhs in assessment year 2004-05 due to unexplained lottery coupons:
- The case involved the discovery of 120 lottery coupons during a search, indicating an investment of ?6 lakhs not reflected in the income tax return.
- Assessee denied making any investment in the small savings scheme of Rajasthan but failed to explain the possession of the coupons.
- AO concluded that the assessee invested ?6 lakhs based on possession of 120 coupons and confirmed by CIT(A).
- Tribunal upheld the addition, citing the proximity between coupons and investment, stating that possession of 120 coupons implied an investment of ?6 lakhs.
- Assessee's argument of not making any investment was dismissed as the possession of coupons without explanation indicated the investment.
- Tribunal found no reason to interfere with the CIT(A)'s decision, confirming the addition of ?6 lakhs.

Issue 2: Addition of ?45,000 in various assessment years related to undisclosed investments:
- Multiple additions of ?45,000 were made for investments in mutual funds not reflected in the income tax returns.
- Assessee claimed investments were made by family members but failed to provide evidence of the source of funds.
- AO treated the investments as income from undisclosed sources and added them to the total income.
- Despite claims that investments were made by family members, no evidence was presented to substantiate the source of funds.
- Tribunal upheld the AO's decision, as the assessee failed to prove the source of funds for the investments.
- Lack of material to support the claims led to the dismissal of the appeals and confirmation of the additions totaling ?45,000 in different assessment years.

In conclusion, the Tribunal dismissed the appeals filed by the assessee, upholding the additions of ?6 lakhs and ?45,000 in different assessment years for unexplained investments and undisclosed income from various sources.