2023 (3) TMI 1152 - AT - Income Tax

Addition u/s 68 - Unexplained cash deposits - HELD THAT - AO has noted that it was the contention of the assessee that the deposits of Rs.74,40,000/- in cash in his bank account was out of the sale proceeds of the agricultural land. AO has noted that the copy of the registered sale deed that was furnished by the assessee revealed that the agricultural land was sold for only Rs.22,01,000/-. He accordingly considered the balance cash deposits of Rs.52,39,000/- as unexplained and accordingly addition was made. Before us, assessee had not placed any material on record to point out any fallacy in the findings of lower authorities. In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of assessee is dismissed.

Summary

Issues involved:
The issues involved in this case relate to the assessment of unexplained cash deposits made by the assessee, the compliance with mandatory conditions under sections 147 to 151 of the Income Tax Act, 1961, and the justification for confirming the addition of Rs. 52,39,000 under section 68 of the Act.

Assessment of Unexplained Cash Deposits:
The case involved an individual assessee who did not file the return of income for the Assessment Year 2011-12 initially. Subsequently, the assessee declared NIL income after a notice u/s 148 of the Act was served. The Assessing Officer (AO) observed that the assessee had deposited cash amounting to Rs. 74,40,000 during the relevant year in a bank account jointly maintained with his wife. The assessee claimed that the cash deposit was from the sale proceeds of agricultural land. However, the AO found that the sale deed indicated a lower sale amount of Rs. 22,01,000, leaving a balance of Rs. 52,39,000 unexplained. Consequently, the AO treated this balance as unexplained cash credit and added it to the assessee's income under section 68 of the Act. The Commissioner of Income Tax (Appeals) affirmed this addition, and the ITAT Delhi upheld the decision, noting the lack of evidence presented by the assessee to challenge the lower authorities' findings.

Compliance with Mandatory Conditions:
The assessee raised objections regarding the compliance with mandatory conditions as envisaged u/s 147 to 151 of the Income Tax Act, 1961. However, the ITAT Delhi did not find any merit in the assessee's contentions. The Tribunal emphasized that merely filing an appeal is not sufficient; the appellant must actively pursue the appeal by cooperating and appearing before the authorities. In this case, the assessee failed to appear despite multiple opportunities, leading the Tribunal to dismiss the appeal due to the lack of cooperation and seriousness on the part of the assessee.

Justification for Addition under Section 68:
The ITAT Delhi considered the grounds raised by the assessee challenging the addition of Rs. 52,39,000 under section 68 of the Income Tax Act, 1961. The assessee failed to provide any material or evidence to dispute the lower authorities' findings regarding the unexplained cash deposits. As a result, the ITAT Delhi upheld the decision of the lower authorities, dismissing the grounds raised by the assessee and affirming the addition made under section 68.