2015 (12) TMI 965 - AT - Income Tax

Unexplained investment assessed u/s 69 - Held that - As contended that assessee belongs to muslim community and according to shariat law applicable to her, she is not supposed to earn interest from any person including bank and she had kept her earnings in the form of cash which was duly deposited at the time of purchase of property. Be that as it may, assessee was not prevented from opening a current account with a bank on which assessee would not have earned any interest, but that was not done. Moreover, sudden deposits of ₹ 2,20,000/- by assessee within a period of 11 days starting from 14/09/2004 and ending with 24/09/2004 definitely proves the unexplained nature of cash deposits which was not related to any business but from some unexplained source. Moreover, these deposits were made immediately before the issue of cheques for either payment to builder or for meeting expenses/payment towards electricity, telephone, insurance payments, etc. and clearly shows that as and when assessee needed to make payments towards the cost of flat and/or towards other expenses, she decided to deposit cash in her accounts. Thus, all these submissions made by the assessee s CA are irrelevant and dismissed. Cash deposits made in the bank account of assessee s daughter Asma A. Sarang and entries in P&L Account, Capital Account and Balance Sheet for financial year relevant to A.Y. 2005-06 are held to be the property of assessee s daughter and therefore, these have been excluded while deciding assessee s appeal. It is a separate case by itself and these cash deposits require to be examined afresh by the Assessing Officer in assessee s daughter s case. Therefore, assessee has failed to provide explanation for the sources of unexplained expenditure/investments/deposits in bank account totalling ₹ 2,03,269/-(92,369 1,10,900) u/s 69, 69B and 69C of IT Act, 1961 of IT. Act, 1961 - Decided against assessee

Summary

Issues:
Delay in filing the appeal for condonation, Addition of Rs. 2,03,269 as confirmed by CIT(A).

Delay in Filing Appeal - Condonation:
The appellant's appeal was delayed by 378 days, citing health issues and personal circumstances. The appellant requested condonation of the delay due to health problems, heavy medications, and personal bereavement. The Tribunal, after hearing the arguments, condoned the delay and admitted the appeal for hearing.

Addition of Rs. 2,03,269 - CIT(A) Decision:
The main issue in the appeal was the addition of Rs. 2,03,269 confirmed by the CIT(A). The Tribunal noted that in a previous appeal for the same assessment year, an addition of Rs. 5,06,621 was considered by the Tribunal, which was related to unexplained investment assessed under section 69 of the Act. The AO confirmed the addition again in the subsequent proceedings. The CIT(A) examined the books of account and bank statements and concluded that the appellant explained sources to the extent of Rs. 3,03,352. The CIT(A) sustained the addition of Rs. 2,03,269 based on various expenditures and deposits not adequately explained by the appellant.

CIT(A) Analysis and Decision:
The CIT(A) analyzed the appellant's business transactions, cash receipts, and payments, noting discrepancies in the accounts. The CIT(A) observed unexplained expenditures and investments, including cash deposits and withdrawals, which were not adequately accounted for by the appellant. The CIT(A) concluded that the appellant failed to provide a satisfactory explanation for the unexplained expenditure, investments, and deposits totaling Rs. 2,03,269 under sections 69, 69B, and 69C of the IT Act, justifying the additions. The CIT(A) dismissed the appellant's contentions and upheld the addition after a thorough examination of the financial records.

Tribunal's Decision:
After reviewing the CIT(A)'s order, the Tribunal found no errors in the CIT(A)'s decision-making process. The Tribunal affirmed the CIT(A)'s analysis of the appellant's financial records and the justification for the addition of Rs. 2,03,269. Consequently, the Tribunal dismissed the appeal filed by the appellant, upholding the CIT(A)'s decision. The appeal was pronounced accordingly on 4th August 2015.