2022 (1) TMI 371 - AT - Income Tax

Taxability of the credits appearing in the bank account of the assessee with ICICI Bank - addition made as no explanation to source of cash deposits given - HELD THAT - As before the AO no details were filed as to the source of deposits of the said sums. However, before the ld. CIT(A), the assessee had attempted to explain the source of deposits as advance received towards sale of land from Mr. Dharumbre and M/s. Prayas Buildwell Pvt. Ltd. and the cash deposits are stated to be made out of opening balance and withdrawal of the cash from the bank - before the ld. CIT(A) no confirmations from the parties from whom advance was received was filed and similarly the proof as to the existence of opening cash balance as well as cash withdrawn from bank was not filed - CIT(A) was justified in rejecting the explanation offered in support of the credits appearing in the bank account of the assessee. Accordingly, we uphold the order of the ld. CIT(A). We do not find merit in the appeal filed by the assessee.- Decided against assessee.

Summary

Issues:
- Addition of income under section 69 of the Income Tax Act, 1961 for assessment year 2007-08.

Analysis:
The appellant, engaged in the sale and purchase of lands, failed to file an income tax return for the assessment year 2007-08. The Assessing Officer, upon receiving information about substantial credits in the appellant's bank account, initiated proceedings under section 148 of the Income Tax Act, 1961. Despite notices, the appellant did not respond, leading to an ex-parte assessment under section 144, resulting in the addition of the credited amount to the appellant's taxable income.

The appellant contested the addition before the ld. CIT(A), arguing that the credits represented advances for land sale and cash deposits from various sources. However, the ld. CIT(A) rejected these contentions, upholding the addition of the entire credited amount to the appellant's taxable income. The ld. CIT(A) did remit the issue of the availability of an opening balance to the Assessing Officer for further examination.

Upon appeal to the Appellate Tribunal, the appellant failed to appear, and the issue of the taxability of the credits in the bank account was considered. The appellant's explanations regarding the sources of the deposits were found insufficient, as confirmations from the parties providing advances were missing, and evidence for opening cash balance and cash withdrawals was not provided. Consequently, the Tribunal upheld the ld. CIT(A)'s order, dismissing the appeal and affirming the addition of the credited amount to the appellant's taxable income.

In conclusion, the appeal filed by the appellant was dismissed by the Appellate Tribunal, affirming the addition of the credited amount under section 69 of the Income Tax Act, 1961 for the assessment year 2007-08.