2022 (8) TMI 451 - AT - Income Tax

Unexplained money u/s.69A - CIT-A treating the net cash transactions as unexplained money u/s.69A of the Act and not treating it as business income - HELD THAT - We noted that the assessee neither before AO nor before CIT(A) filed any evidence in regard to prove the source of this cash, even the transactions of the alleged transactions of late Shri Subbarao. The assessee could not file even one evidence in regard to this except a bald statement made in the statement of facts, grounds of appeal before AO or before CIT(A). The assessee admitted the bank account maintained with ICICI bank and where this cash deposit made. Once the assessee is unable to prove the cash deposits, we have no alternative except to confirm the addition. Accordingly, in these two years, there is no reason to delete the addition and hence, we confirm the order of CIT(A) and dismiss the appeals of assessee.

Summary

Issues:
- Time-barred appeals due to delay in filing
- Addition of unexplained money under section 69A of the Income Tax Act
- Failure to provide evidence for the source of cash deposits
- Violation of principles of natural justice

Analysis:
1. Time-barred appeals due to delay in filing:
- The appeals were filed 147 days after the deadline due to the Covid-19 pandemic.
- The delay was condoned based on directions from the Hon'ble Supreme Court, allowing the appeals for adjudication.

2. Addition of unexplained money under section 69A:
- The common issue in both appeals was the addition of Rs.26,13,200/- & Rs.51,84,300/- for financial years 2010-11 & 2011-12 as unexplained money under section 69A of the Act.
- The appellant argued that the transactions in question should have been treated as business turnover, not unexplained money.
- The appellant failed to provide documentary evidence of business turnover, leading to the confirmation of the additions by the CIT(A) and the Tribunal.

3. Failure to provide evidence for the source of cash deposits:
- The assessee, a salaried individual, allowed a family friend to use his bank account for business transactions.
- Despite the explanation provided, the assessee failed to provide any evidence supporting the source of cash deposits.
- The Tribunal confirmed the addition of unexplained money as the assessee could not substantiate the transactions.

4. Violation of principles of natural justice:
- The appellant claimed that the AO and CIT(A) violated the principles of natural justice by not providing sufficient opportunity to adduce evidence.
- However, the Tribunal found that the appellant did not present any evidence to support the source of cash deposits, leading to the dismissal of the appeals.

In conclusion, the Tribunal dismissed the appeals filed by the assessee due to the failure to provide evidence for the source of cash deposits, resulting in the confirmation of the additions as unexplained money under section 69A of the Income Tax Act. The Tribunal upheld the orders of the CIT(A) based on the lack of substantiating evidence and the failure to prove the business nature of the transactions in question.