2016 (6) TMI 325 - AT - Income Tax

Addition under section 69 of the Act on account of deposits in the bank accounts - Held that - The assessee has failed to appear before us though several opportunities have been given. In the absence of any explanation filed by the assessee and in the absence of assessee having produced the books of account to substantiate his claim, we find no merit in the stand of assessee in this regard. The onus was upon the assessee to produce his witnesses and establish the sources of amount in two savings bank accounts with HDFC Bank and other documents, which the assessee has failed to do so. - Decided against assessee Addition under section 69 - deposit in the bank account was out of business of his spouse - Held that - We take note of the claim of assessee that his wife was running a sample collection centre at Tawade Hotel . Undoubtedly, the wife of assessee appeared during the course of assessment proceedings and confirmed that she was running the said business, but when she was asked to substantiate her claim, she failed to do so. The said witness is that of assessee and the onus was upon the assessee to prove the veracity of statement by her. The report which was submitted by the Inspector of Income Tax Department was vis- -vis fact of collection of samples near Tawade Hotel, where the employee said that it was a collection centre of M/s. Vedant Path lab. In view of the assessee having not discharged his onus, we find no merit in the claim of assessee and addition of ₹ 4,15,411/- is upheld.- Decided against assessee Undisclosed investment - Held that - The assessee first claimed that it had received ₹ 13 lakhs from his father, which was cash available with him. However, no evidence of the source of cash was produced nor the father was produced for verification. Since the claim was made by the assessee, the onus was upon the assessee to produce his father vis- -vis investment in the land totaling ₹ 5,93,610/- also. The assessee claimed that it was purchased by his father and was part of HUF. However, the assessee failed to produce and fi le the source of said investment and merely stating that it belongs to the HUF does not absolve the assessee of his duty, where the asset stands in his name. In the absence of assessee having discharged his duty, we find no merit in the claim of assessee and the same is rejected. - Decided against assessee Adhoc disallowance of expenditure - Held that - Assessing Officer noted that the assessee in his Profit & Loss Account has claimed various expenses, against which it had neither produced books of account nor any bills or vouchers to establish that the claim was for business purpose. Accordingly, a n adhoc disallowance of ₹ 50,000/- was made out of total expenditure claimed by the assessee. The assessee failed to furnish any information before the Assessing Officer or CIT(A) or even before us vis- -vis expenditure claimed under various heads and in the absence of same, we find no merit in the ground of appeal raised by assessee.

Issues Involved:

1. Addition of ?20,44,172/- under section 69 of the Income-tax Act, 1961.
2. Addition of ?4,15,411/- under section 69 of the Income-tax Act, 1961.
3. Addition of ?5,93,610/- under section 69 of the Income-tax Act, 1961.
4. Adhoc disallowance of ?50,000/-.
5. Failure to call for a Remand Report by CIT(A).
6. Levy of interest under sections 234A, 234B, 234C, and 234D of the Income-tax Act, 1961.

Detailed Analysis:

1. Addition of ?20,44,172/- under section 69 of the Income-tax Act, 1961:

The assessee, a doctor running a pathology lab, failed to produce books of account, bills, and vouchers during the assessment proceedings. The Assessing Officer (AO) noted unexplained cash deposits in various bank accounts totaling ?36,30,740/-. The assessee claimed sources for ?25,14,396/- but failed to substantiate ?21,26,635/-. The AO added ?21,26,635/- as unexplained credit under section 69. The CIT(A) upheld the addition, noting the assessee's failure to substantiate claims or produce his father for verification. The Tribunal found no merit in the assessee's appeal due to the lack of evidence and dismissed the ground.

2. Addition of ?4,15,411/- under section 69 of the Income-tax Act, 1961:

The assessee claimed that ?6,19,905/- was from his spouse's business. However, no books of account or licenses were produced. The AO, based on an Inspector's report, found no evidence of business activity by the spouse and added ?4,15,411/- after disallowing 40% of claimed expenses. The CIT(A) upheld the addition, noting the failure to produce evidence. The Tribunal agreed, emphasizing the assessee's failure to discharge the onus of proof and dismissed the ground.

3. Addition of ?5,93,610/- under section 69 of the Income-tax Act, 1961:

The assessee purchased land for ?5,93,610/-, not reflected in the Balance Sheet, claiming it was bought by his father with HUF funds. The AO added the amount as unexplained investment due to lack of evidence and failure to produce the father for verification. The CIT(A) upheld the addition, noting the onus was on the assessee to substantiate the claim. The Tribunal found no merit in the assessee's appeal, emphasizing the lack of evidence and dismissed the ground.

4. Adhoc disallowance of ?50,000/-:

The AO made an adhoc disallowance of ?50,000/- due to the assessee's failure to produce books of account or vouchers for claimed expenses. The CIT(A) upheld the disallowance. The Tribunal found no merit in the appeal due to the absence of evidence and dismissed the ground.

5. Failure to call for a Remand Report by CIT(A):

The assessee claimed the CIT(A) should have called for a remand report to verify the factual position. The Tribunal found no merit in this ground, noting the assessee's failure to establish a case for additional evidence and dismissed the ground.

6. Levy of interest under sections 234A, 234B, 234C, and 234D of the Income-tax Act, 1961:

The issue of interest levy under sections 234A, 234B, 234C, and 234D is consequential. The Tribunal dismissed the ground as it is dependent on the outcome of the other issues.

Conclusion:

The Tribunal dismissed the appeal of the assessee, upholding the additions and disallowances made by the AO and confirmed by the CIT(A). The onus was on the assessee to substantiate claims with evidence, which was not done, leading to the dismissal of all grounds of appeal.

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