2020 (2) TMI 1227 - AT - Income Tax

Difference in total income as against the returned income - no income has been declared on account of the other receipts shown in the 26 AS - difference in the income shown by the assessee and the income reflected as per 26 AS available with the income tax department - HELD THAT - Addition on account of various amounts received by the assessee from M/s. Plug Power Energy India Private Limited through RTGS and not properly explained by the assessee before him. Apart from the above the AO also made addition u/s. 68 being the unexplained cash deposit in the bank account, made addition on account of interest on savings bank account and on IT refund and denied the claim of exemption u/s. 54 made by the assessee by filing a letter during the course of assessment proceedings. We find in appeal the Ld. CIT(A) dismissed the appeal filed by the assessee, the reasons of which have already been reproduced in the preceding paragraphs. A perusal of the AO s order shows that there was very little compliance or no compliance before the AO to explain the various discrepancies. Even before the CIT(A) the assessee could not furnish any evidence to support the discrepancies of ₹ 2,72,484/- being the receipts on account salary/ professional receipts. We find the summon issued by the AO to the company was returned back unserved with the remark company left . Similarly the assessee also could not establish the nature, source and genuineness of the cash deposits in the bank account amounting to ₹ 8,43,000/-. The mere statement that he was running an imprest account for his employer and withdrawing money from this account to meet the required expenses and re-depositing the same as and when required for the business purposes was not substantiated with supporting details. Assessee also could not substantiate the non disclosure of such interest on savings bank account and interest on income tax refund. So far as the addition on account of long term capital gain and considering submission that despite enquiry conducted by the AO and obtaining confirmation from the society that assessee has sold a flat through registered sale deed dated 04.05.2011 to Mrs. Suvida Singh for consideration of ₹ 35 lacs, the AO wrongly determined the long term capital gain in the interest of justice we deem it proper to restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to file the relevant details with supporting evidence to the satisfaction of the AO to substantiate the discrepancies in the return filed vis a viz, the amount reflected in the 26 AS statement and the nature and source of various deposits both cheque/ cash / RTGS in the bank account of the assessee. The assessee is also hereby directed to substantiate the non disclosure of interest income on IT refund and SB account and the claim of deduction u/s. 54. The AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are allowed for statistical purposes.

Summary

Issues Involved:
1. Addition on account of non-disclosure of professional receipts.
2. Discrepancy in salary/professional receipts.
3. Disallowance of exemption under Section 54.
4. Addition of interest on savings bank account and IT refund.
5. Addition of unexplained cash deposits under Section 68.

Issue-wise Detailed Analysis:

1. Addition on Account of Non-Disclosure of Professional Receipts:
The Assessing Officer (AO) noted discrepancies between the income declared by the assessee and the amounts reflected in Form 26AS. The assessee declared only salary income but did not disclose professional receipts. The AO made an addition of ?9,38,497/- to the total income of the assessee after allowing certain expenses. The CIT(A) upheld this addition, noting that the assessee failed to provide a satisfactory explanation or evidence to reconcile the discrepancies.

2. Discrepancy in Salary/Professional Receipts:
The AO observed discrepancies in the salary and professional receipts from M/s. Plug Power Energy India Private Limited. The AO found that the assessee received ?48,50,609/- through RTGS, which was not properly explained. The assessee claimed these were reimbursements, but failed to substantiate this claim with evidence. Consequently, the AO made an addition of ?22,71,484/- for unexplained receipts. The CIT(A) upheld this addition, noting the assessee's failure to provide supporting documents or evidence.

3. Disallowance of Exemption under Section 54:
The AO disallowed the exemption of ?12,88,927/- claimed under Section 54, as the assessee did not declare the capital gain in the return nor filed a revised return. The CIT(A) upheld this disallowance, emphasizing that the exemption was claimed only after the AO initiated inquiries. The CIT(A) noted that the assessee failed to claim the exemption in the appropriate form and within the stipulated time.

4. Addition of Interest on Savings Bank Account and IT Refund:
The AO added ?23,705/- as interest on the savings bank account and ?35,137/- as interest on the IT refund, which were not declared by the assessee. The CIT(A) upheld these additions, noting the assessee's failure to provide any explanation for non-disclosure of these interest incomes.

5. Addition of Unexplained Cash Deposits under Section 68:
The AO found that the assessee had deposited ?8,43,000/- in cash in his bank account, which was unexplained. The assessee claimed these were withdrawals and redeposits for business purposes, but failed to provide supporting details. The CIT(A) upheld this addition, emphasizing the assessee's failure to establish the nature, source, and genuineness of the cash deposits.

Tribunal's Decision:
The Tribunal noted the lack of compliance by the assessee in providing necessary explanations and evidence before the AO and CIT(A). The Tribunal restored the issues to the AO for a fresh examination, directing the assessee to substantiate the discrepancies with supporting evidence. The AO was instructed to provide the assessee with a final opportunity to explain the discrepancies, non-disclosure of interest income, and claim of deduction under Section 54. The Tribunal allowed the appeal for statistical purposes, emphasizing the need for a thorough re-examination by the AO.

Conclusion:
The Tribunal directed a re-examination of the issues by the AO, providing the assessee with a final opportunity to substantiate the discrepancies and claims with appropriate evidence. The appeal was allowed for statistical purposes, ensuring a fair and just resolution of the matter.