2020 (12) TMI 1141 - AT - Income Tax

Unexplained cash deposits in his bank account - HELD THAT - The affidavits so filed in absence of necessary corroboration therefore don t support the creditworthiness of these persons. Further, it has been stated that the cash advance has been given towards purchase of flat, however, there is no mention about the locality, area, etc of such flat for which such amount has been given. The assessee in his return of income has also not disclosed any transaction towards sale of flats. The affidavits so filed therefore don t represent a clear picture of the actual transaction which is claimed by the assessee in absence of necessary corroboration. The assessee was asked to produce these persons for necessary verification and having failed to produce these persons, it cannot be assumed that the AO has accepted the affidavits so filed. Assessee has failed to discharge the initial onus cast on him in terms of satisfying the test of creditworthiness and genuineness of the transactions so claimed by him and unless the initial onus cast on the assessee is discharged, the burden doesn t shift on to Revenue to prove otherwise and mere non-issuance of summons doesn t support the case of the assessee - There is no infirmity in the findings of the ld CIT(A) where the cash deposit has been found not satisfactorily explained and brought to tax in the hands of the assessee as his unexplained income. Appeal of the assessee is dismissed.

Summary

Issues:
Challenge to addition of unexplained cash deposits in assessment proceedings for A.Y. 2014-15.

Analysis:
The case involved an appeal by the assessee against the order of the ld. CIT(A)-2, Jaipur confirming the addition of ?4,50,000 as unexplained cash deposits made by the Assessing Officer for the assessment year 2014-15. The Assessing Officer observed cash deposits received from three individuals and asked for supporting evidence regarding the source of these deposits. The assessee submitted indemnity bonds from these individuals claiming the cash was from agricultural receipts. However, the AO found the evidence insufficient, requested further verification, and upon non-compliance by the assessee, treated the cash deposit as unexplained income.

The ld. CIT(A) upheld the AO's decision stating the onus was on the assessee to prove the source of cash, which was not done even during the appellate proceedings. The assessee argued that the indemnity bonds were not rejected by the AO and requested independent verification, but the AO proceeded with the addition without further inquiry. The assessee contended that without additional evidence or verification, the cash deposit should not be treated as unexplained income.

The ld. DR argued that filing affidavits does not relieve the assessee from proving the initial onus of identity, creditworthiness, and genuineness of the transactions. As the necessary details were not provided, and verification was not conducted, the burden did not shift to the Revenue. The Tribunal considered the submissions and evidence, noting the lack of corroborative evidence and incomplete details in the affidavits. It concluded that the assessee failed to discharge the initial onus, and the cash deposit was rightly treated as unexplained income.

The Tribunal found no infirmity in the findings of the ld. CIT(A) and dismissed the appeal, upholding the addition of the unexplained cash deposits in the hands of the assessee for the assessment year 2014-15.