2013 (11) TMI 811 - AT - Income Tax

Addition u/s 68 - source of credits entries in the bank account - assessee borrowed these amounts from his in-laws and filed confirmation letters - When the enquiries were extended to the said in-laws, father-in-law and mother-in-law AO noted that these in- laws are not income tax assessees. When the sources were examined, it was noticed that the sources of the loans are out of sale of jewellery Held that - The appellant has not been able to provide any proof of a return of income filed by the above 2 persons wherein capital gains on the sale of jewellery has been declared to prove that there indeed was a sale. In view of these discrepancies the contention of the appellant cannot be accepted. No co-relation can be provided by the appellant vis- -vis the said sale of jewellery and the deposit of cash in his bank account. For example there is a deposit of Rs. 30,100/- in his bank account on 7/5/2005 which cannot be related to any of the so-called sales made by his father-in-law order or his mother-in law. Similarly there are other deposits which also do not co-relate with the sales made. The appellant has not been able to explain this discrepancy that was pointed out. No reconciliation statement has been submitted. It was also not explained why funds were received in a piece meal manner especially when the claim was that it was against sale of immovable property. In view of this, addition made is confirmed. Disallowance of commission expense - Commission expense of Rs. 40,262/- Held that - Appellant had not furnished the name and address of the parties to whom the said commission had been paid. In the absence of details the commission payment claimed had been disallowed

Summary

Issues involved:
1. Estimation of income from House Property
2. Addition of unexplained cash credit under section 68 of the Income Tax Act
3. Disallowance of commission expenses

Estimation of income from House Property:
The appellant raised objections regarding the estimation of house property income at Rs. 36,000 by the AO. The Tribunal found that the CIT (A) reasonably decided this issue, and no interference was necessary. The Tribunal noted that the appellant did not press this ground seriously before the CIT (A) or the Tribunal. Therefore, the Tribunal upheld the decision of the CIT (A) regarding the estimation of house property income.

Addition of unexplained cash credit under section 68 of the Income Tax Act:
The issue revolved around the addition of Rs. 17,61,900 as unexplained cash credit under section 68 of the Income Tax Act. The AO found discrepancies in the transactions related to cash credits in the appellant's bank account. Despite the appellant's submissions and evidence, the CIT (A) rejected the explanation provided, citing discrepancies in the documents furnished. The Tribunal observed that the alleged creditors were not tax-assessed individuals. The Tribunal also highlighted inconsistencies in the documents provided by the appellant and upheld the decision of the CIT (A) to confirm the addition of Rs. 17,61,900 as unexplained cash credit under section 68 of the Income Tax Act.

Disallowance of commission expenses:
The appellant contested the disallowance of commission expenses amounting to Rs. 40,262, as the details of services rendered by the recipient were not provided during the assessment proceedings. The CIT (A) upheld the disallowance, stating that the appellant failed to furnish necessary details to prove the genuineness of the commission paid. The Tribunal noted that the appellant did not provide details of the services rendered by the recipient of the commission. Consequently, the Tribunal agreed with the CIT (A) and confirmed the disallowance of commission expenses. As a result, the appeal filed by the assessee was dismissed by the Tribunal.

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