2019 (3) TMI 573 - AT - Income Tax

Addition u/s 69A - unexplained money deposited in the bank account - HELD THAT - As per section 68, the assessee should fulfill three ingredients viz. (a) identity of the lender, (b) genuineness of the transaction, and (c) credit-worthiness of the lender. Similarly, section 69 contemplates, what is unexplained investment. Here the assessee made deposits in the bank account which is unexplained investment unless its nature and source is being explained by the assessee to the satisfaction of the AO. The question before the AO was that, what is the source of deposit in the bank account, qua that the assessee has not produced any material. The stand of the assessee is that visa agent on behalf of the assessee s son has arranged this amount is concerned, it can be a corroborative circumstances, but should be supported with evidence. He has to pin point from where money was obtained, how it was obtained, and then how it was deposited. No confirmation from the lender has been filed. Even name of lender has not been disclosed. As far as judgment in the case of Smt.P.K. Norrjahan 1997 (1) TMI 6 - SUPREME COURT) and other decision of Hon ble Gujarat High Court are concerned, they are not applicable in the present case. Smt.P.K. Norrjahan is a lady from whom it could not be assumed that she has any source of income, and in that background explanation was accepted. Here, the assessee is labour contractor, filing return showing income. It was not alleged that the assessee was not an ablebodied person who could not earn income. - Decided against assessee.

Summary

Issues:
Appeal against order confirming addition under section 69A of IT Act for unexplained money deposited in bank account.

Analysis:
The assessee, a labour contractor, appealed against an order adding ?27,11,544 under section 69A of the Income Tax Act for unexplained cash deposits in a bank account. The AO called for bank details and the assessee failed to explain the source of deposits, leading to the addition. The CIT(A) partially deleted the addition, but the Tribunal confirmed it. The CIT(A) found the appellant's case unique, requiring explanation for cash deposits and withdrawals. The Tribunal upheld the addition as the appellant failed to satisfactorily explain the source of deposits. The Tribunal cited precedents regarding cash deposit and withdrawal transactions and the presumption of availability of withdrawn amounts for redeposit. The Tribunal also discussed the time gap between cash withdrawal and redeposit, citing relevant judgments.

The assessee sought to submit additional evidence regarding visa obtained for education purposes, arguing money was arranged by a visa agent. However, the Tribunal found the evidence irrelevant and lacking merit. The Tribunal emphasized the need for the assessee to explain the source of deposits to the AO's satisfaction, highlighting the requirements of sections 68 and 69 of the IT Act. The Tribunal noted the absence of material or confirmation from the lender, and the failure to disclose the lender's identity. The Tribunal distinguished the present case from precedents involving individuals with no apparent income sources, emphasizing the labour contractor's ability to earn income. Ultimately, the Tribunal rejected the appeal, upholding the order confirming the addition.

In conclusion, the Tribunal dismissed the assessee's appeal, emphasizing the need for the assessee to explain the source of cash deposits satisfactorily. The Tribunal found the appellant's case distinct and highlighted the lack of evidence supporting the claim of money arrangement by a visa agent. The Tribunal upheld the order confirming the addition under section 69A of the IT Act, citing relevant legal provisions and precedents to support its decision.