2021 (12) TMI 14 - AT - Income Tax

Best judgment assessment u/s. 144 - Non appearance by assessee - HELD THAT - On perusal of the order sheet of the appeal, we find that on various other occasions also no one appeared on behalf of the assessee before the Tribunal and the case was adjourned on that sole reason. Even today, on the date of hearing, no one appeared before me on behalf of the assessee. Only an adjournment letter is filed citing vague reasons. Assessee is not interested to pursue his appeal - having regard to the facts and circumstances of the case and on examining the orders of the Ld. Revenue Authorities it is evident that the AO as well as the Ld. CIT(A) had made the addition and sustained the same in the absence of cogent material/documentary evidence in support of the assessee's claim. Even now before the Tribunal, neither the assessee/assessee's counsel was present to argue the appeal nor filed any documentary evidence to support the claim against the additions made by the Ld. A.O. In this situation, we do not find it necessary to interfere in the order passed by the Ld. CIT(A) - Appeal filed by the assessee is dismissed.

Issues involved:
1. Assessment of short term capital gain
2. Application of section 50C in scrutiny assessment
3. Treatment of cash credit in the name of a creditor
4. Taxation of unexplained cash credits in bank accounts
5. Estimation of income from undisclosed transactions
6. Adequacy of evidence and substantiation of claims in appeal

Analysis:

1. The assessment involved the determination of short term capital gains by the Assessing Officer (AO) based on property sales, cost of acquisition, and interest paid on loans. The AO made an addition to the capital gains due to unsatisfactory explanations provided by the assessee regarding the interest paid on loans and admitted capital gains, resulting in a disputed amount.

2. In the scrutiny assessment, the AO invoked section 50C of the Income Tax Act due to discrepancies between document value and government value of certain properties, leading to an addition under this provision. The assessee's submissions were considered, but the AO proceeded with the addition based on the information provided by the assessee.

3. The AO noted a credit balance in the name of a creditor, where the genuineness and creditworthiness were not established due to lack of details. Consequently, an addition was made to the income based on this unverified credit balance, as the assessee failed to provide sufficient evidence to support the claim.

4. Unexplained cash credits in the assessee's bank accounts were brought to tax by the AO due to discrepancies between the books of account and bank statements. Despite deposits made by the assessee, the lack of proper explanations led to the inclusion of these amounts as unexplained cash credits in the assessment.

5. Income derived from undisclosed transactions, specifically from the sale of prawns, was estimated by the AO based on the turnover and profit percentage. The AO applied Section 44AD of the Act to calculate the profit earned, resulting in an addition to the assessed income.

6. The appellate process saw the CIT(A) sustaining the additions made by the AO, as the assessee failed to substantiate claims with proper documentary evidence. The lack of evidence and representation by the assessee during the appeal process led to the dismissal of the appeal by the Tribunal, as the additions were deemed justified in the absence of supporting documentation.

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