2012 (8) TMI 34 - AT - Income Tax

Addition on account of undisclosed cash credit - CIT(A) deleted addition - Held that - As per copy of the bank statement it can be concluded that all the withdrawals are on account of payment to LIC of India and all the deposits are cash deposits - the explanation of the assessee cannot be rejected without bringing on record the evidences that these payments to LIC by the assessee from bank account is not on behalf of the customers of the assessee but on assessee s own behalf as no such material has been brought on record by the A.O. - affidavit filed with the A.O. in which it was stated that the cash deposited in the bank account is assessee s own income was just one day before her delivering a premature baby was filed under duress belief that once income is admitted, there will be no further I.T. proceedings - as there are no cash withdrawals and no personal expenditure of the appellant was met out of the bank account, AO s observation that the appellant s explanation is a concocted story does not stand to reason - in favour of assessee.

Summary

Issues:
Appeal against deletion of addition made under Section 68 of the I.T. Act, 1961 for undisclosed cash credit.

Analysis:
The case involved an appeal by the Revenue challenging the deletion of an addition made by the Assessing Officer under Section 68 of the I.T. Act, 1961. The assessee, an Investment and Insurance Agent, had deposited cash in her bank account for making investments for insurance policies of investors. The Assessing Officer was not satisfied with the explanation provided by the assessee and made the addition. However, the Ld. CIT(A) deleted the addition based on the explanation provided by the assessee.

Upon reviewing the submissions and evidence, the ITAT found that all withdrawals from the bank account were for payments to LIC of India, and all deposits were in cash. The ITAT noted that the Assessing Officer did not provide any evidence to show that the payments to LIC were not on behalf of the customers but were the assessee's own. The ITAT also considered an affidavit filed by the assessee, where she admitted the cash deposited as her income, but later retracted this admission, citing pressure due to personal circumstances.

The ITAT further analyzed the judgments cited by both parties. The judgments cited by the Revenue were found to be inapplicable to the present case, as they did not align with the unique circumstances and explanations provided by the assessee. On the other hand, the judgment cited by the assessee supported her contentions and the evidence presented.

Ultimately, the ITAT upheld the decision of the Ld. CIT(A) to delete the addition, as it found no justification to interfere based on the facts and explanations provided. The ITAT concluded that the entire amount deposited in the bank was used to pay premiums for others, with no personal expenditure by the assessee, leading to the dismissal of the Revenue's appeal.