2017 (3) TMI 95 - AT - Income Tax

Addition of unexplained money - Held that - Assessee reiterates his stand adopted throughout that the impugned cash deposits of ₹ 15.34lacs represent sale price of the gold and diamond jewellery items as inherited from his late father by way of a will. He stresses the point that his father had declared the very jewellery item in wealth tax return as well. We find no force in this argument as the instant plea admittedly does not raise an issue of jewellery items in question since we are concerned with assessee s source of cash deposits only. It is an admitted fact that the assessee has not filed a single detail at all qua the so called purchasers of jwellery in question. Learned Departmental Representative seeks to invite our attention to the fact that the assessee s bank account has seen various cash deposits instances not containing the relevant details even relevant to a single occasion. We thus find no reason to interfere with the learned CIT(A) s conclusion hereinabove in restricting the impugned addition of unexplained money from ₹ 24,08,001/- to ₹ 15.34 lacs. - Decided in favour of assessee Unexplained investment addition - Held that - The assessee has carried out his share transactions through M/s. Sushil Finance Securities Pvt. Ltd. And also that he has sold his investment and credited the same to his ledger account directly. The Revenue further fails to dispute the fact that the assessee has made cheque payments from his co-operative bank account whose deposits stood added forming subject matter of adjudication in his cross appeal decided hereinabove. It can thus be concluded that the assessee s cash deposits/credits added u/s.68 of the Act as well as the opening balance of the said account form source of his impugned investments. We accordingly do not see any reason to interfere in the CIT(A) s conclusion deleting the impugned addition on account of Revenue s failure to rebut the same - Decided in favour of assessee

Summary

Issues involved:
1. Challenge to Section 69A addition of unexplained money
2. Unexplained investment addition

Issue 1: Challenge to Section 69A addition of unexplained money

The assessee challenged the correctness of the Section 69A addition of unexplained money amounting to ?24,08,001 made by the Assessing Officer, which was later restricted to ?15,34,000 by the CIT(A). The assessee claimed to have deposited the cash sums from the sale of gold/diamond jewellery items inherited from his father through a will. However, the Assessing Officer rejected this explanation due to lack of details such as names and addresses of purchasers, quality and quantity-wise details, and prevailing market rates. The CIT(A) restricted the addition to ?15.34 lakhs after considering the appellant's explanation and evidence provided. The appellant's contention was that the cash deposits represented the sale price of the jewellery items inherited from his late father. The Tribunal found no merit in this argument as the appellant failed to provide any details regarding the purchasers of the jewellery items, leading to the dismissal of the appeal.

Issue 2: Unexplained investment addition

The Revenue appealed to revive the unexplained investment addition of ?37,93,213, which was initially made by the Assessing Officer but deleted by the CIT(A). The appellant claimed that the purchase and sale of shares were made through a specific finance company, and the net amount was paid to the broker. The Assessing Officer added the total purchase amount as unexplained investment, disregarding the set-off from sales. The CIT(A) found discrepancies in the assessment order regarding the treatment of purchases made in the name of the appellant's wife. The Tribunal observed that the appellant conducted share transactions through the finance company, and the sale proceeds were directly credited to his ledger account. Additionally, cheque payments were made from the co-operative bank account, which was under scrutiny in another appeal. Consequently, the Tribunal upheld the CIT(A)'s decision to delete the unexplained investment addition, as the Revenue failed to counter the explanations provided. Both the Revenue's appeal and the appellant's cross objection were dismissed.

In conclusion, the Tribunal upheld the CIT(A)'s decision to restrict the Section 69A addition and delete the unexplained investment addition, dismissing the appeals from both the assessee and the Revenue.