2019 (4) TMI 1366 - AT - Income Tax

Unexplained deposits in cash - assessee has no business or source of income - assessee has claimed gift from father-in-law and cash receipt from her husband - assessee has also claimed receipt from hand loan from four persons - HELD THAT - When the assessee has no business or source of income, it is not known how the entire sale of stock and machineries were allowed to be withdrawn by one partner in the partnership firm. This Tribunal is of the considered opinion that in the absence of any evidence for sale of stock or sale of machineries, the CIT(Appeals) has rightly found that the entries in the books of account are afterthought and there was huge cash deposit on a single day, therefore, there was no merit in the claim of the assessee that a sum of ₹ 61,00,000/- was withdrawn from the partnership firm s account. Gift said to be received by the assessee from her father-in-law genuineness of transaction and creditworthiness of creditors or the donors were not established. Therefore, the CIT(Appeals) has rightly confirmed the addition made by the Assessing Officer. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Cash receipt from the assessee s husband - the source claimed by Shri Vasudevan such as receipt of cash advance earlier for machinery purchase from Shri S.K. Pandian, Shri R. Nagaraj and Shri D. Palanisamy were not established. In the case of Shri Vasudevan s assessment, the source was not accepted by the Assessing Officer that attained finality. Since the source for creditors was found to be not available for making payment of ₹ 23,00,000/- to the assessee, the assessment in the case of assessee has to be confirmed. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Land lease - assessee claims that due to pollution control problem, the partnership firm M/s Balu Process decided to close down the operation and the land and building were leased out and an advance of ₹ 20,00,000/- was received - HELD THAT - Admittedly, the land and building were of dying unit. The assessee claims that it was leased to one Shri Muruganantham who appears to be a driver by profession. Shri Muruganantham earns only ₹ 7500/- per month. It is not known the object of leasing out of dying unit to a driver. In respect of three lessees, namely, Shri Sundaram, Shri Shyam Jayakumar and Smt. Rajeswari, no material evidence appears to be brought on record by the assessee to substantiate the genuineness of transaction and creditworthiness of the lessees for making payment to the assessee. This Tribunal is of the considered opinion that the CIT(Appeals) has rightly confirmed the order of the Assessing Officer. - Assessee's appeal rejected.

Summary

Issues:
Assessment of cash deposits in bank account, rejection of explanations for cash deposits, withdrawal from partnership firm, gift from father-in-law, cash receipt from husband, land lease amount.

Assessment of Cash Deposits:
The appeal concerned a cash deposit of ?1,21,00,000 in the assessee's bank account. The Assessing Officer accepted only ?10,00,000 of the explanation provided by the assessee and rejected the rest. The assessee claimed that ?61,00,000 was drawn from a partnership firm, but the Assessing Officer disbelieved this claim. The CIT(Appeals) upheld the disallowance without reevaluating the evidence. The Tribunal agreed that without evidence of sale of stock or machineries, the books of account seemed fabricated to explain the cash deposits. Thus, the disallowance was confirmed.

Gift from Father-in-law:
The assessee claimed a gift of ?12,00,000 from her father-in-law, supported by an unregistered gift deed. However, the source of this gift was not explained. The Assessing Officer found no genuine transaction for the cash credit. The CIT(Appeals) upheld this decision as the genuineness and creditworthiness of the transaction were not proven. The Tribunal confirmed this addition as well.

Cash Receipt from Husband:
Regarding a cash receipt of ?23,00,000 from the assessee's husband, the Assessing Officer found discrepancies in the husband's accounts, where no cash withdrawal was recorded. The source of the payment to the assessee was not established, leading to the confirmation of the assessment by the lower authorities and the Tribunal.

Land Lease Amount:
The assessee claimed a land lease amount of ?20,00,000 due to pollution control issues in the partnership firm. The lease was to a driver earning a modest income, raising doubts about the transaction's genuineness. Insufficient evidence was provided to establish the creditworthiness of the lessees, resulting in the confirmation of the Assessing Officer's decision by the CIT(Appeals) and the Tribunal.

In conclusion, the appeal filed by the assessee was dismissed by the Tribunal, upholding the decisions of the lower authorities on all issues raised in the case.