2017 (4) TMI 178 - AT - Income Tax

Addition on income from sand business - Held that - Keeping in view of the business carried-out by the assessee, the Commissioner of Income Tax (Appeals) was of the opinion that estimation of income of ₹ 30,000/- from the sand business is reasonable. Accordingly, confirmed the order of the Assessing Officer. Even before me, assessee was not able to substantiate any evidence that the addition made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals) is on higher side. In view of the above, find no reason to interfere in the order passed by the Commissioner of Income Tax (Appeals). Thus, this ground of appeal raised by the assessee is dismissed. Unexplained investment in purchase of TATA Safari Car - Held that - Commissioner of Income Tax (Appeals) has given many opportunities to file details about the repayments received and also details in respect of sale of car to the third party. The assessee neither appeared nor filed details before the Commissioner of Income Tax (Appeals). Under these facts and circumstances of the case, Commissioner of Income Tax (Appeals) confirmed the order passed by the Assessing Officer. Even Before us, the assessee has not filed any details in respect of payments received from Sri Tadi Tada Rao from whom assessee purchased the car nor filed any details of third party to whom car was sold. Under these facts and circumstances of the case, find no infirmity in the order of the Commissioner of Income Tax (Appeals). Credits in the bank account as representing receipts from sand business - Held that - The assessee has not furnished any information regarding bank credits. During the course of appellate proceedings also, no information was given with regard to deposits in the bank account, accordingly, he upheld the order passed by the Assessing Officer. Before me, learned counsel for the assessee submitted that the addition made by the Assessing Officer on estimate basis is without any basis, however, the assessee has not filed any material to explain the source of credits in the bank account to the tune of ₹ 50,30,160/-. Under these facts and circumstances of the case, I find that Assessing Officer has justified in estimating the income of the assessee and the same was confirmed by the Commissioner of Income Tax (Appeals). Unexplained investment in land - Held that - No material is filed to substantiate that the assessee s son is having source of income to purchase the land. As no evidence was filed to substantiate the source of investment and also return of income filed by his son Commissioner of Income Tax (Appeals) rightly confirmed the order of the Assessing Officer Addition towards contract business - Held that - The assessee has not filed any evidence to shows that the amount received from Dattatreya Company has been paid to original owners of the sand. He has also not given the details of the original owners. Before me also, the assessee has not submitted any details regarding original owners and also not able to substantiate that the amount credited in his bank account has been transferred to owners of the sand. Assessee appeal dismissed.

Issues Involved:
1. Addition of income from sand business.
2. Unexplained investment in TATA Safari Car.
3. Unexplained investment in sand reach.
4. Unexplained investment in purchase of Ex-210.
5. Unexplained investment in land.
6. Income from operation of Ex-210.
7. Income from contract business.

Detailed Analysis:

1. Addition of Income from Sand Business
The assessee, engaged in the transport and sand business, was subject to a survey on 29/08/2007. The Assessing Officer (AO) noted from impounded material that the assessee earned ?30,000 from sand business in Reach No.18. The AO added this amount to the total income. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld this addition, finding it reasonable based on the business carried out by the assessee. The assessee failed to provide evidence to contradict this addition, leading to the dismissal of this ground of appeal.

2. Unexplained Investment in TATA Safari Car
The AO found that the assessee purchased a TATA Safari Car for ?6,48,000, with payments totaling ?3,36,000 in FY 2002-03 and ?1,82,000 in FY 2003-04. The assessee claimed the payments were adjusted against a financial transaction with the seller, who had passed away. The CIT(A) confirmed the AO's addition due to the lack of evidence from the assessee. The assessee's appeal was dismissed for failing to provide details of payments or the third-party sale of the car.

3. Unexplained Investment in Sand Reach
The AO noted the assessee's 25% shareholding in Ravulapalem sand reach, with an investment of ?3,87,500 and income of ?2 lakhs. The CIT(A) restricted the addition to ?1,50,000, considering the assessee's own lorries used in the business. The assessee's inability to provide further evidence led to the dismissal of this ground of appeal.

4. Unexplained Investment in Purchase of Ex-210
The AO found that the assessee purchased an Ex-210 machine with an initial payment of ?4,55,000, financed by TATA Motors Ltd. The AO added this amount as unexplained investment due to the lack of explanation from the assessee. The CIT(A) upheld this addition, and the assessee's appeal was dismissed for failing to provide any source of the initial investment.

5. Unexplained Investment in Land
The AO noted that the assessee purchased a plot for ?3,70,000 in his son's name, adding ?4,12,665 (including stamp duty and registration charges) as unexplained investment. The assessee failed to provide evidence of his son's income. The CIT(A) confirmed the AO's addition, and the assessee's appeal was dismissed for not substantiating the source of investment.

6. Income from Operation of Ex-210
The AO noted earnings of ?15,03,600 from the Ex-210 machine, bringing to tax a net income of ?7,69,314 after depreciation and interest. The assessee offered only ?1 lakh, leading to an addition of ?6,69,314. The CIT(A) upheld this addition due to the lack of evidence from the assessee. The appeal was dismissed as the assessee failed to provide any material to contradict the addition.

7. Income from Contract Business
The AO noted transactions of ?16,22,230 in the assessee's ING Vysya Bank accounts, linked to sand works for Dattatreya Company. The AO estimated income at 8% under section 44AD, amounting to ?1,29,778. The assessee claimed the amounts were for sand supplied and paid to original owners, but failed to provide evidence. The CIT(A) confirmed the addition, and the appeal was dismissed due to the lack of substantiation.

Conclusion
All grounds of appeal raised by the assessee were dismissed due to the failure to provide substantial evidence or material to contradict the additions made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals). The judgment was pronounced on 31st March 2017.

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