2023 (1) TMI 407 - AT - Income Tax

Addition u/s 68 - undisclosed income in respect of Suisse Bank Account with HSBC Bank Geneva to the returned income - possibility of introduction of unaccounted/undisclosed money in the books of account in the names of relations or third partied - HELD THAT - Revenue had information that the assessee was having a bank account in HSBC Geneva. The bank account had balance of Rs.USD 4849 and the account also contained the name of the father and mother of the assessee - claim of the assessee that he does not know anything about the said bank account is totally unbelievable. It is beyond the preponderance of human probability that some unknown person will deposit USD 4849 in the name of the assessee in HSBC Geneva bank and the name of the father and mother also be given and the assessee will not have any information about it. This fully comes under the decision in the case of Sumati Dayal 1995 (3) TMI 3 - SUPREME COURT Hence, the addition in this regard is liable to be sustained. As regards, the deposit in HSBC London, the assessee has not been able to provide any cogent evidence for the source of deposits. The submissions of the assessee have been without any reliable material. The explanation given by the assessee is only self-serving and has correctly been rejected by the lower authorities. In these circumstances, we do not find any infirmity in the orders of the authorities below and confirm the same. This appeal by the assessee stands dismissed.

Summary

Issues:
1. Addition u/s 68 of the Income Tax Act for undisclosed income in Suisse Bank Account with HSBC Bank Geneva.
2. Addition u/s 68 of the Income Tax Act for undisclosed income in HSBC Bank London for credit entries.

Analysis:

Issue 1: Addition u/s 68 for undisclosed income in Suisse Bank Account with HSBC Bank Geneva
The case involved the appellant's denial of owning a bank account with HSBC Geneva despite evidence showing otherwise. The AO added an amount as undisclosed income due to the appellant's non-cooperation and inconsistent statements. The CIT (A) upheld the AO's decision citing the provisions of section 68 of the Income Tax Act, emphasizing the onus on the assessee to prove identity, creditworthiness, and genuineness of transactions. Various case laws were referred to in support of the decision. The ITAT affirmed the CIT (A)'s decision, stating that the appellant's claim of ignorance about the bank account was implausible, referencing the Sumati Dayal case. Therefore, the addition for undisclosed income in the Suisse Bank Account was upheld.

Issue 2: Addition u/s 68 for undisclosed income in HSBC Bank London for credit entries
Regarding the undisclosed income in the HSBC Bank London account, the appellant failed to provide substantial evidence for the source of credit entries, with explanations deemed self-serving and unreliable. The lower authorities rejected the appellant's submissions, and the ITAT found no fault in their decisions. Consequently, the addition for undisclosed income in the HSBC Bank London account was confirmed. The ITAT dismissed the appeal by the assessee, upholding the decisions of the lower authorities in both instances.

In conclusion, the ITAT upheld the additions made under section 68 of the Income Tax Act for undisclosed income in both the Suisse Bank Account with HSBC Bank Geneva and the HSBC Bank London account, based on the appellant's lack of evidence and credibility in explaining the transactions.