2018 (8) TMI 731 - AT - Income Tax

Additions u/s 69A - Undisclosed income - failure to record transaction in bank accounts in the books of account - Additions u/s 68 towards bogus gifts received from parents - Held that - only the combined peak credit of all the 8 bank accounts can be brought to tax in this case. As already stated the assessee had submitted the statement showing the combined peak credit of all the bank accounts. As it is a matter of computation we are of the view that this has to be verified. - Decided in favor of assessee. Additions on account of gift received - Held that - The donors in this case happen to be the father and mother of the assessee. All necessary details were filed in this refund. Both the parents are income-tax assessees. Under these circumstances in our view no addition can be made in the hands of the assessee. If the donors could not prove their capacity addition should have been considered in their hands but not in the hands of the assessee. - Decided in favor of assessee.

Summary

Issues involved:
1. Addition of peak credit balance in undisclosed bank accounts
2. Addition of gifts received by the assessee from parents
3. Addition of unsecured loans received by the assessee

Analysis:

Issue 1: Addition of peak credit balance in undisclosed bank accounts
The assessee appealed against the addition of peak credit balance in 8 unaccounted bank accounts. The assessee argued to tax only the combined peak credit of all accounts instead of individual peaks. The Tribunal referred to a similar case where combined peak credit was accepted. The Tribunal held that only the combined peak credit should be taxed, directing the Assessing Officer to verify the statement provided by the assessee. The issue was set aside for fresh adjudication, allowing the appeal for statistical purposes.

Issue 2: Addition of gifts received by the assessee from parents
The assessee contested the addition of gifts received from parents, providing documentation of the gifts and financial details of the parents. The Tribunal noted that the parents were income-tax assesses and no evidence of lack of creditworthiness was presented. It was held that if donors couldn't prove capacity, any addition should be in their hands, not the assessee's. The addition on this account was deleted due to lack of evidence contradicting the assessee's claim.

Issue 3: Addition of unsecured loans received by the assessee
The addition of loans received from 8 creditors was challenged by the assessee, who later sought to submit additional evidence. The Assessing Officer rejected the evidence without further inquiry or evidence against it. As the Tribunal had already set aside another issue for fresh adjudication, this issue was also sent back to the Assessing Officer for proper consideration. The ground was allowed for statistical purposes.

The appeal was allowed in part for statistical purposes, emphasizing the need for proper verification and consideration of evidence in tax assessments.