2024 (2) TMI 215 - AT - Income Tax

Best judgement assessment u/s 144 - Unexplained income - Addition on account of cash deposit into bank - CIT(Appeals) in denying the benefit of opening balance of cash - CIT (Appeals) partly sustained the addition observing that the benefit of opening cash cannot be given to the assessee - HELD THAT - On going through the observations of the ld. CIT (A) we do not see any good reason to interfere with the findings of the of CIT (A) especially in the absence of any evidences produced before us to rebut the findings of the ld. CIT (A) by the assessee. Thus, we sustain the order of the ld. CIT (A) and reject the grounds raised by the assessee. Appeal of the assessee is dismissed.

Summary

Issues Involved:
The issues involved in the judgment are assessment u/s 144, denial of benefit of opening cash balance, appreciation of submissions and explanations, addition on account of cash deposit into bank, credit of business gross turnover, and credit of cash received from sale of agriculture crop.

Assessment u/s 144:
The appeal was filed against the order of the ld. Commissioner of Income Tax (Appeals)-5 for assessment year 2013-14. The assessee failed to offer any explanation regarding cash deposits, leading the Assessing Officer to treat the deposits as income under section 69 of the Income Tax Act and pass a best judgment assessment u/s 144.

Denial of Benefit of Opening Cash Balance:
The ld. CIT (Appeals) partly sustained the addition of Rs. 23,00,000, stating that the benefit of opening cash of Rs. 19,24,286 cannot be given to the assessee. Additionally, a negative balance of Rs. 3,75,714 was added to the income of the assessee. The AR's submissions regarding the source of cash deposit were not found acceptable, leading to the confirmation of the addition.

Appreciation of Submissions and Explanations:
The AR filed additional evidences during the appeal proceedings to explain the source of cash deposit. However, the explanations provided were not deemed acceptable by the Assessing Officer, as they did not sufficiently justify the cash deposits made by the assessee.

Addition on Account of Cash Deposit into Bank:
The AO made an addition of Rs. 71,10,000 on account of cash deposited in the bank account of the assessee, considering it as undisclosed income u/s 69 of the Income Tax Act. The AR's arguments during the appellate proceedings, along with a cash flow statement and other documents, were taken into account but were ultimately not found reliable to explain the cash deposit.

Credit of Business Gross Turnover:
The ld. CIT (Appeals) did not allow the credit of business gross turnover of Rs. 32,25,780, which was a ground of appeal raised by the assessee. The reasons for this denial were not explicitly mentioned in the summarized text.

Credit of Cash Received from Sale of Agriculture Crop:
Similarly, the credit of cash received from the sale of agriculture crop was not allowed by the ld. CIT (Appeals). The grounds for this decision were not elaborated upon in the provided text.

This summary provides a detailed overview of the judgment, addressing each issue involved and the key points discussed in relation to each issue.