2022 (2) TMI 981 - AT - Income Tax

Addition of capital introduced by the appellant as unexplained cash credit u/s. 68 - HELD THAT - It is pertinent to note that the assessee has not filed any details regarding the agricultural income and the expenses incurred which is an admitted position as the assessee made submission before the CIT(A) while filing additional evidence that the details relating to agricultural income will be filed when asked by the AO during the remand proceedings. Besides this, the assessee made a plea that inadvertently the agricultural income was not reflected in the details of the return of income. But at no point of time, the assessee with any documents before the AO or before the CIT(A) or before us has shown that the assessee was actually having agricultural income. This shows that the assessee was not having the genuine agricultural income. Mere oral submissions or indication that evidences will be provided if revenue asked at later stage shows that the assessee was not at all dispensed the burden of proving his claim that the said income and expenses were part of agricultural income. As regards the explanation for the personal account and its maintenance, the Ld. A.R. has not set out any case as to why said practice was followed by the assessee. The assessee was not at all maintaining proper books of accounts. Thus, ground No. 1 is dismissed.

Summary

Issues:
1. Addition of capital as unexplained cash credit under Section 68 of the Act.
2. Addition of rental income.
3. Allegation of lower authorities not appreciating facts and breaching principles of Natural Justice.
4. Levying of interest under Section 234A/B/C of the Act.
5. Initiating penalty under Section 271(1)(c) of the Act.

Analysis:
1. The appellant challenged the addition of capital under Section 68 of the Act, claiming it was sourced from agricultural income. However, the Assessing Officer found discrepancies in the details provided and lack of evidence supporting agricultural income. The CIT(A) partly allowed the appeal, but the ITAT noted that no concrete evidence of agricultural income was presented, leading to the dismissal of the appeal. The burden of proof was not met, and lack of proper bookkeeping further weakened the appellant's case.

2. The addition of rental income was also contested by the appellant, but this ground was not pressed during the proceedings. As a result, this issue was dismissed by the ITAT.

3. The appellant alleged a breach of Natural Justice principles by the lower authorities for not considering submissions and explanations adequately. However, the ITAT found no evidence to support this claim and dismissed this ground.

4. The levy of interest under Section 234A/B/C and the initiation of penalty under Section 271(1)(c) were challenged by the appellant. The ITAT dismissed these grounds, stating that they were inherent to the Assessment Order and did not warrant separate consideration.

In conclusion, the ITAT upheld the Assessing Officer's decision regarding the addition of capital and rental income, dismissing the appeal on all grounds. The lack of concrete evidence and proper bookkeeping worked against the appellant, leading to the dismissal of the appeal.