2019 (10) TMI 599 - AT - Income Tax

Validity of initiation of proceeding u/s 147/148 - DR has pointed out that the assessee did not file any return of income for the year under consideration and the AO received an AIR information regarding deposit of cash of Rs. 38, 29, 000/- in the Bank of Baroda Jaipur - HELD THAT - AO after considering the withdrawal as well as transfer from one account to another account calculated the net deposit and therefore the AO has formed the opinion that income assessable to tax has escaped assessment. We further note that before the CIT(A) the assessee has advanced arguments challenging the initiation of proceedings u/s 148 the same is without any basis and proper material on record but the assessee has not brought any material on record to show that these deposits in the bank account do not represent the income of the assessee. Therefore in the absence of any contrary fact or material available on record the information received by the AO regarding deposits made in the bank account of the assessee and specifically when the assessee has not filed any return of income constitute a tangible material to form the belief that the income assessable to tax has escaped assessment. Accordingly we do not find any substance or merit in this ground of the assessee. Addition on account of deposits made in the bank account - HELD THAT - Except the submissions of the assessee and an affidavit filed in support of the submissions the assessee has not produced any other record to establish that the cash deposited in the bank account of the assessee was actually belong to one Shri Amit Goyal. In the absence of any documentary evidence to show that the said amount actually belongs to alleged shri Amit Goyal and also offered to tax in the hand of the other person we do not find any reasons to interfere with the impugned order of the ld. CIT(A) qua this issue.

Summary

Issues:
1. Validity of initiation of proceedings under sections 147/148 of the Income Tax Act.
2. Addition made by the Assessing Officer on account of deposits in the bank account of the assessee.

Issue 1: Validity of initiation of proceedings under sections 147/148 of the Income Tax Act

The Assessing Officer (AO) initiated proceedings under sections 147/148 of the Income Tax Act based on information received regarding cash deposits in the bank account of the assessee. The assessee challenged the initiation, arguing it lacked basis and proper material. However, the AO calculated the net deposits after considering withdrawals and transfers, leading to the belief that taxable income had escaped assessment. The assessee failed to provide evidence disproving that the deposits did not represent income. As the assessee did not file a return and no contrary material was presented, the initiation of proceedings was deemed justified.

Issue 2: Addition made by the Assessing Officer on account of deposits in the bank account of the assessee

The AO noted significant cash deposits in the assessee's bank accounts, totaling Rs. 1,06,49,030. The assessee claimed the accounts were operated by another individual, but the AO rejected this explanation, stating that deposits in the assessee's accounts could not be considered another person's money without substantial proof. Despite the submissions and an affidavit, no concrete evidence was provided to establish that the cash belonged to the mentioned individual and was offered for taxation elsewhere. Consequently, the Tribunal upheld the addition made by the AO, leading to the dismissal of the assessee's appeal.

In conclusion, the Tribunal upheld the initiation of proceedings under sections 147/148 of the Income Tax Act and the addition of Rs. 1,06,49,030 on account of deposits in the assessee's bank accounts. The appeal was dismissed, emphasizing the importance of substantiating claims with concrete evidence in tax matters.