2020 (3) TMI 327 - AT - Income Tax

Unexplained cash deposits - unexplained expenditure on construction - receipt from unexplained sources - Unexplained investment in purchase of flat. - HELD THAT - When before both the authorities below the assessee explained that the amount has been received from A and B, now, the question arises as to why the AO has not invoked the provisions of section 131 of the Act available to the income tax authorities for the personal presence of the depositor. CIT(A) has gone through the confirmations of the above two persons along with other documents filed by the assessee. Merely because the assessee has not filed an application for additional evidence, the claim of the assessee cannot be rejected. If the CIT(A) found that the assessee has furnished evidence which short of only an application for admission of additional evidences, it was always open for the CIT(A) to direct the assessee to file the additional evidences along with application for admission of the same and after accepting the same, he could have called for remand report or place the issue back before the AO for passing an appropriate order. We also find that the documents filed on record claimed to have been produced before the authorities below. Even DR could not controvert the documents filed by the assessee before us by bringing any positive material on record. Accordingly, we are not inclined to support the order of the authorities below on this count also. Considering the above scenario and the factual aspect of the matter, we are of the opinion that the addition made by the AO and confirmed by the CIT(A) in this regard deserves to be deleted and accordingly, we direct the AO to delete the same. Ground No.2 of the assessee is allowed. Unexplained deposit in State Bank of India bank account - HELD THAT - We find that no material was brought on record either by the Assessing Officer or by the CIT(A) after examining the details and documents filed by the assessee before lower authorities to show that the assessee did not have the amount available with it out of earlier withdrawals made front different banks for making the same as deposit in the bank account as claimed by the assessee. In absence of any such material being brought on record, we find that the lower authorities were not justified in making the addition in the hands of the assessee as unexplained deposit in bank account. Therefore, we set aside the orders of lower authorities and delete the addition and allow this ground of appeal of the assessee. No deposit into the HDFC bank account, the assessee has sufficient amount which was his earlier withdrawals as discussed above and as per the above observations of the Tribunal in assessee's own case for A.Y.2010-2011 in Pabitra Mohan Samal (supra) addition made by the AO and confirmed by the CIT(A) is not justified. Accordingly, we direct the AO to delete the same. Ground No.5 is allowed. Unexplained investment in purchase of flat. - AR submitted that a flat was booked by Shri Anup Hans, who under mutual consent surrendered the same in favour of the assessee and taken bank his booking amount. The assessee paid to him on 02.12.2010 out of his withdrawal from time to time - HELD THAT - No credible evidence has been brought on record by the ld. AR of the assessee in respect of the contention that Shri Anup Hans has paid ₹ 1,00,000/- on behalf of the assessee as a booking amount for purchase of flat. Therefore, in absence of the same, we find no good reason to interfere with the order of CIT(A) in this regard. Accordingly, we dismiss the ground No.6 of appeal of the assessee.

Summary

Issues Involved:
1. Arbitrary, excessive, and contrary to facts order by the Income Tax Officer (ITO).
2. Addition of ?36,58,500 as unexplained deposit in Axis Bank.
3. Addition of ?13,00,000 as unexplained deposit in State Bank of India.
4. Addition of ?1,00,000 as unexplained deposit in Punjab National Bank.
5. Addition of ?7,00,000 as unexplained deposit in HDFC Bank.
6. Addition of ?1,00,000 as unexplained investment in the purchase of a flat.

Detailed Analysis:

Issue 1: Arbitrary, excessive, and contrary to facts order by the Income Tax Officer (ITO)
The assessee contested that the order passed by the ITO was arbitrary, excessive, contrary to facts, and bad in law. This issue was general in nature and did not involve specific arguments or evidence.

Issue 2: Addition of ?36,58,500 as unexplained deposit in Axis Bank
The assessee argued that ?30 lakhs were deposited by Shri Soumya Ranjan Samal for the construction of his house, which the assessee was overseeing. The remaining ?6,58,500 were claimed to be from previous withdrawals. The CIT(A) dismissed these claims due to the lack of an application for additional evidence. However, the Tribunal found that the assessee had provided sufficient documentary evidence, including confirmations from Soumya Ranjan Samal, and noted that the AO did not utilize Section 131 of the Act to verify these claims. Consequently, the Tribunal directed the AO to delete the addition of ?36,58,500.

Issue 3: Addition of ?13,00,000 as unexplained deposit in State Bank of India
The assessee provided confirmations from Soumya Ranjan Samal for ?7 lakhs and from Susanta Nayak for ?1 lakh. The remaining ?5 lakhs were claimed to be from previous withdrawals. The Tribunal found that the assessee had sufficiently explained the source of the deposits and that the department did not provide any contrary evidence. Thus, the Tribunal directed the AO to delete the addition of ?13,00,000.

Issue 4: Addition of ?1,00,000 as unexplained deposit in Punjab National Bank
The assessee explained that the ?1,00,000 deposited on 14.07.2010 was from a previous withdrawal on 28.06.2010 from the same account. The Tribunal verified this claim with the bank statements and found it to be accurate. Therefore, the Tribunal directed the AO to delete the addition of ?1,00,000.

Issue 5: Addition of ?7,00,000 as unexplained deposit in HDFC Bank
The assessee argued that the deposits were made from previous withdrawals from various bank accounts. The Tribunal verified the cash book and bank statements and found that the assessee had sufficient funds from previous withdrawals to cover the deposits. Consequently, the Tribunal directed the AO to delete the addition of ?7,00,000.

Issue 6: Addition of ?1,00,000 as unexplained investment in the purchase of a flat
The assessee claimed that the flat was initially booked by Shri Anup Hans, who later surrendered it to the assessee. However, the Tribunal found no credible evidence to support this claim and upheld the addition of ?1,00,000 by the CIT(A).

Conclusion:
The Tribunal allowed the appeal of the assessee in part, directing the deletion of additions related to unexplained deposits in various bank accounts while upholding the addition related to the unexplained investment in the purchase of a flat. The order was pronounced in the open court on 14/01/2020.