2023 (8) TMI 919 - AT - Income Tax

Unexplained cash deposits in bank - sale proceeds of trading receipts undertaken by the Assessee and sustaining addition claim to be agriculture receipt - Agriculture receipt treated as Sham receipt of agriculture produce - HELD THAT - The assessee had produced some confirmation certificates for getting commission in cash for property bills were also furnished. When the A.O. verified the bills produced by the assessee from M/s Agra Alu Trading Company they have specifically denied making any payment to the assessee. The said information has also been confronted with the assessee. The assessee once again filed letter claimed to have been issued by M/s Agra Alu Trading Company that these transactions are genuine. The A.O. again verified the genuineness of two confirmations, but from the enquiry report of ITO, Nasik it was gathered again through an independent confirmation from the party that the bills produced by the assessee was bifurcated by misusing the letter head of M/s Agra Alu Trading Company. Thus, the A.O. treated the cash deposits in the bank account as unexplained correctly. As per Section 156(1) of UP Zameendari Abolition Reforms Act, no Bhoomadar' or Asami shall let for any period whatsoever any land comprising in his holding. When there is specific bar that no land can be given on rent the assessee cannot have agriculture receipt. Thus, in our opinion, the order of the assessment in making the addition as unexplained by the A.O. which was confirmed by the CIT(A) is in order which requires no interference. Apart from the same, it is the specific ground of the assessee that no opportunity of cross-examination was given to the assessee on whose testimony the addition has been made. It is found from the record that at no point of time, the assessee sought for permission for cross- examination and on the other hand, the statement made by the parties have been confronted with the assessee and found that the assessee has fabricated the documents and produced before the A.O. Therefore, in our opinion, the grounds of Appeal of the assessee are devoid of merit. Accordingly, the Grounds of appeal of the assessee are rejected.

Summary

Issues involved:
The issues involved in the judgment are the denial of liability for assessment, sustaining additions made by authorities, reliance on statements without examination, legality of assessment order, incorrect assumptions, double addition in bank accounts, variation in returned income, and lack of opportunity for cross-examination.

Denial of liability for assessment:
The appellant denied liability to be assessed at income of Rs. 78,31,850 and objected to the addition of Rs. 75,81,000, along with tax and interest charges. The appellant argued that the authorities erred in making and sustaining the addition without proper examination and cross-examination, leading to an unjustified assessment order.

Sustaining additions made by authorities:
The appellant contested the addition of Rs. 65,21,000 as sale proceeds of trading receipts and Rs. 10,60,000 as agriculture receipts. The appellant, acting as a commission agent, claimed that the deposits in bank accounts were related to commission received for sale of agricultural produce. However, the authorities found discrepancies in the evidence provided by the appellant, leading to the rejection of the appellant's claims.

Reliance on statements without examination:
The appellant criticized the assessing officer for relying on a statement without examining the individual and their books of accounts, as well as denying the opportunity for cross-examination. The appellant argued that the additions and assessment order were based on incorrect assumptions and lacked adequate hearing opportunities, violating principles of natural justice.

Legality of assessment order:
The appellant raised concerns about the legality of the assessment order, citing it as bad in law, illegal, unjustified, and contrary to facts. The appellant emphasized the need for proper examination of evidence and adherence to legal procedures in making additions to the income.

Double addition in bank accounts:
The appellant argued that the assessing officer should have calculated the peak credit in all bank accounts to avoid double addition in respect of deemed income. The appellant highlighted the need for a fair assessment that considers all relevant factors to prevent inaccuracies in the final income determination.

Variation in returned income:
The appellant objected to the assessment order's variation in the returned income, claiming that it was against the facts of the case. The appellant sought to quash the additions made by the authorities, emphasizing the importance of a lawful and accurate assessment process.

Lack of opportunity for cross-examination:
The appellant raised concerns about the lack of opportunity for cross-examination on the testimony used to make additions. However, the court found that the appellant did not seek permission for cross-examination and that the evidence presented was found to be fabricated, leading to the dismissal of the appeal.

The appeal filed by the assessee was dismissed by the Appellate Tribunal ITAT Agra, upholding the assessment order for the Assessment Year 2011-12. The judgment addressed various issues raised by the appellant regarding the denial of liability for assessment, sustaining additions made by authorities, reliance on statements without examination, legality of the assessment order, double addition in bank accounts, variation in returned income, and lack of opportunity for cross-examination. The court found that the assessing officer's actions were justified based on discrepancies in the evidence provided by the appellant, leading to the dismissal of the appeal.