2019 (1) TMI 652 - AT - Income Tax

Unaccounted income from undisclosed source - Held that - From perusal of the findings of Ld.CIT(A) as well as copies of bank statements and fixed deposit receipts paced before us as well as in the given facts and circumstances of the case there remains no doubt that the alleged amount is duly accounted for in the regular books of accounts of the assessee and it comprises of three fixed deposit receipt and accrued interest and therefore this amount cannot be treated as unaccounted income from undisclosed source. No interference is therefore called for in the finding of Ld.CIT(A) deleting the impugned addition - decided against revenue.

Summary

Issues:
Revenue's appeal against deletion of addition on account of unaccounted income from undisclosed source.

Analysis:
The appeal pertains to the Assessment Year 2013-14 and challenges the deletion of an addition made by the Assessing Officer (AO) amounting to ?1,70,77,904 on account of unaccounted income from an undisclosed source. The AO's order was based on documents seized during search operations at the premises of the Apollo Group of Indore, which includes the assessee. The appellant, engaged in commodity brokerage, filed its return declaring income of ?49,55,360. The AO completed the assessment under section 153A r.w.s. 143(3) after making the aforementioned addition. The Revenue contended that the deletion of the addition by the Commissioner of Income Tax (Appeals) was erroneous, arguing that the amount was not adequately explained during the assessment proceedings. The appellant, on the other hand, maintained that the amount was duly accounted for in the regular books of accounts, representing fixed deposit receipts totaling ?1,70,00,000 and accrued interest of ?77,904. The Commissioner, in deleting the addition, considered the documents provided by the appellant, including fixed deposit receipts and bank statements, which corroborated the explanation provided. The Tribunal, after examining the facts and submissions, upheld the Commissioner's decision to delete the addition, concluding that the amount in question was not unaccounted income from an undisclosed source. The appeal of the Revenue was dismissed, affirming the Commissioner's order.

This case underscores the importance of substantiating financial transactions and entries through proper documentation and evidence. The Tribunal's decision emphasizes the significance of maintaining accurate records and providing adequate explanations during assessment proceedings to support claims and refute allegations of undisclosed income. The judgment highlights the need for coherence between documentary evidence, explanations provided, and entries in financial records to establish the legitimacy of transactions and income sources. Ultimately, the Tribunal's ruling emphasizes the principle of accountability and transparency in financial dealings, reinforcing the requirement for clear and verifiable documentation to justify income sources and transactions in tax assessments.