2022 (4) TMI 965 - AT - Income Tax

Addition on account of unexplained expenditure, disallowance being 25% of total expenditure towards unexplained expenditure, unexplained cash deposits in Bank, unexplained unsecured loans, addition on account of unexplained debits in bank statement and addition of unexplained advances - Addition made in absence of details like bank book with narration, nature of transactions, name and address of the parties, ledger account, mode of payment, source of payments with requisite documentary support, the genuineness of the said expenditure made could not be verifiable - CIT(A) upheld the addition in ex parte order by taking a view that the assessee has not substantiated the various grounds with documentary evidences - HELD THAT - Before us neither the assessee appeared nor filed any documentary evidences, despite the fact Considering the fact that the appeal was filed in the year 2016 and despite passing of more than six years, the assessee has not filed even a single documentary evidence to substantiate various grounds of appeal. Therefore, we do not find any reason to deviate from the order of the ld. CIT(A) and we uphold the same. Appeal of the assessee stands dismissed.

Summary

Issues:
- Addition of unexplained expenditure
- Disallowance of expenditure
- Addition of unexplained cash deposits in bank
- Addition of unexplained unsecured loans
- Addition of unexplained debits in bank statement
- Addition of unexplained advances

1. Addition of Unexplained Expenditure:
The appeal was against the order of the ld. Commissioner of Income Tax (Appeals) for the Assessment year 2011-12. The Assessing Officer made various additions, including &8377; 43.50 lacs on account of unexplained expenditure. The ld. CIT(A) upheld the addition, stating that the assessee failed to substantiate the grounds with documentary evidence. Despite multiple notices and opportunities, the assessee did not appear or provide any evidence. The Tribunal upheld the addition, as the genuineness of the expenditure could not be verified without proper documentation.

2. Disallowance of Expenditure:
Additionally, a disallowance of &8377; 1,60,434 was made, being 25% of total expenditure of &8377; 6,41,735, towards unexplained expenditure. The Assessing Officer and the ld. CIT(A) treated this as unexplained expenditure due to lack of supporting details. The Tribunal, noting the absence of documentary evidence from the assessee, upheld this disallowance as well.

3. Addition of Unexplained Cash Deposits and Loans:
The Assessing Officer also added &8377; 8.00 lacs for unexplained cash deposits in the bank and &8377; 41.00 lacs for unexplained unsecured loans. These additions were based on the lack of details such as nature of transactions, source of payments, and supporting documentation. The Tribunal, in the absence of any evidence from the assessee, upheld these additions as unexplained income.

4. Addition of Unexplained Debits and Advances:
Furthermore, additions were made for unexplained debits in the bank statement amounting to &8377; 36,25,588 and unexplained advances of &8377; 29,53,553. The Assessing Officer and the ld. CIT(A) considered these amounts as unexplained due to the absence of necessary details and documentation. Despite the long duration of the case and multiple opportunities, the assessee failed to provide any supporting evidence. Consequently, the Tribunal upheld these additions as well, as the genuineness of the transactions remained unverified.

In conclusion, the Tribunal dismissed the appeal of the assessee, emphasizing the lack of documentary evidence and failure to substantiate the various grounds raised. The decision was based on the principle that without proper documentation and supporting details, the genuineness of the transactions cannot be established, leading to the additions being treated as unexplained income.