2022 (11) TMI 1239 - AT - Income Tax

Reopening of assessment u/s 147 - Unexplained bank deposits - assessee contended that the assessee is an Insurance Agent received premium from his clients and same were deposited in the bank account and later withdrawn for making of payment of premium - HELD THAT - The name appearing in the list of policy holders recorded in the diary are not matching with the names of the persons who have issued the receipts. Further, the receipts are in the nature of certain amount received by those persons and not the amount given or deposited by those persons in the bank account of the assessee. AO reproduced one of the receipts and all the receipts are identical in language except the name and amounts and dates which are separately filled up. Therefore, neither the list of the policy holders nor the receipts are supporting the claim of the assessee that the cash in the bank account of the assessee was deposited by the policy holders for payment of the policy premium. The assessee has not produced a single document showing the payment of premium on behalf of the any of the policy holders. The assessee has not filed a single receipt issued by the insurance company to show that the assessee paid the premium of the amount which was received in the bank account. Therefore, the facts analyzed by the CIT(A) in the impugned order are found to be correct and proper. Accordingly, No infirmity or error in the order of the CIT(A), the same is upheld.Appeal of the assessee is dismissed.

Summary

Issues Involved:
Appeal against order dated 09.05.2019 of CIT(A) for assessment year 2010-11 challenging initiation of proceedings under section 147, validity of assessment order, lack of notice under section 143(2), addition of Rs. 16,91,450 under section 69 based on cash deposits.

Detailed Analysis:

Issue 1: Proceedings under Section 147
The appellant challenged the initiation of proceedings under section 147 by the Assessing Officer, contending it was solely based on bank deposits without any adverse material. The Tribunal noted that the Assessing Officer had valid reasons for reopening the assessment, citing C.I.B. information about significant cash deposits. Despite notices and opportunities, the appellant failed to justify the deposits as income, leading to the conclusion that income had escaped assessment. The Tribunal upheld the proceedings under section 147 as valid.

Issue 2: Validity of Assessment Order
The appellant argued that the assessment order was erroneous due to the lack of notice under section 143(2) after filing the return in response to the notice under section 148. However, the Tribunal found that the appellant failed to provide a proper explanation for the cash deposits, leading to the addition of Rs. 16,91,450 to the total income. As a result, the Tribunal upheld the assessment order as valid and the addition as justified based on the evidence presented.

Issue 3: Addition under Section 69
The primary issue raised during the hearing was the addition of Rs. 16,91,450 under section 69 of the Act, related to cash deposits in the bank account of the appellant. The appellant, an LIC agent, claimed that the deposits were premiums from policyholders and remittances from villagers. However, the Tribunal found discrepancies between the list of policyholders and depositors, lack of evidence for premium payments, and round-figure deposits not indicative of premium payments. The Tribunal upheld the addition based on the lack of substantiated evidence and inconsistency in the appellant's claims.

Conclusion
The Tribunal dismissed the appeal, upholding the validity of the proceedings under section 147, the assessment order, and the addition of Rs. 16,91,450 under section 69. The decision was based on the lack of supporting evidence, discrepancies in the appellant's claims, and failure to demonstrate the source of funds for the cash deposits. The Tribunal's decision was pronounced on 05.08.2022 at Allahabad, U.P., in accordance with the Income Tax (Appellate Tribunal) Rules, 1963.