2022 (12) TMI 1355 - AT - Income Tax

Addition u/s 68 - unexplained deposits in bank account - HELD THAT - The assessee was the employee of the Indian Railway and nature of income was salary. The cash was deposited in different dates in bank account but the assessee was unable to explain the same before the ld. AO. Before the CIT(A), the explanation was filed that source of deposit is related to sale of agricultural land. But the assessee was unable to bring the evidence before the CIT(A) and not able to take any cognizance material to substantiate its source of cash deposit in bank account. In ITAT, the assessee reluctant to submit the relevant evidence before the bench, we find that the assessee was fully non cooperative from the end of completion of appeal proceeding. There is no substantial evidence for depositing cash in the bank account submitted on behalf of the assessee. Accordingly, the appeal of the assessee is dismissed.

Issues:
1. Addition of unexplained deposits in bank account u/s 68 of the Income Tax Act.
2. Lack of evidence regarding the source of cash deposits.
3. Non-cooperation of the assessee in providing evidence.
4. Confirmation of penalty u/s 271(1)(c) in a consequential manner.

Issue 1: Addition of unexplained deposits in bank account u/s 68 of the Income Tax Act:
The appeal pertained to the addition of Rs. 17,70,000 as unexplained deposits in the assessee's bank account during the financial year 2005-06. The Assessing Officer (AO) added back the amount u/s 68 of the Act as the source of the cash deposits was not satisfactorily explained by the assessee. The Commissioner of Income Tax (Appeals) upheld the AO's decision after detailed discussions on the lack of evidence provided by the assessee regarding the source of the deposits.

Issue 2: Lack of evidence regarding the source of cash deposits:
The assessee claimed that the cash deposits were related to the sale of agricultural land. However, the assessee failed to provide concrete evidence to substantiate this claim. The appellant could not furnish details of the mode and date of receipt of the sale consideration for the land. Additionally, the appellant did not provide supporting documentation for other claims related to retirement benefits and property sale receipts. Despite summons issued to a builder for clarification, no compliance was received, further weakening the assessee's case.

Issue 3: Non-cooperation of the assessee in providing evidence:
During the hearing, the assessee's representative withdrew, leading to delays in the case. Despite multiple opportunities, the assessee did not cooperate effectively in presenting evidence to support their claims. The lack of cooperation and failure to provide substantial evidence ultimately worked against the assessee's case, leading to the dismissal of the appeal.

Issue 4: Confirmation of penalty u/s 271(1)(c) in a consequential manner:
The penalty under section 271(1)(c) was confirmed as the quantum appeal was dismissed. The penalty was deemed consequential to the main issue of unexplained deposits in the bank account. Both appeals filed by the assessee were consequently dismissed by the tribunal.

In conclusion, the appellate tribunal dismissed the appeals of the assessee concerning the unexplained deposits in the bank account, citing the lack of evidence, non-cooperation, and consequential confirmation of penalties. The decision was based on the failure of the assessee to substantiate the source of the cash deposits, leading to the dismissal of the appeals and confirmation of penalties.

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