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of <h1>Tribunal Upholds IT Act Income Addition, Stresses Documentation for Financial Transactions</h1> <h3>Shri Jasbir Singh, S/o Shri Dharam Pal, Versus The Income Tax Officer, Ward-1, Kurukshetra</h3> The appellate tribunal confirmed the addition of Rs. 3,39,000 as income from undisclosed sources under the IT Act, with Rs. 2,30,000 acknowledged as ... - Issues involved: Addition of income u/s 143(3) of the I.T. Act, 1961 based on cash deposits and loans given to a rice mill.Issue 1: Addition of Rs. 3,39,000 as income from undisclosed sourcesThe Assessing Officer (AO) added Rs. 3,39,000 as unexplained income u/s 68/69 of the IT Act due to cash deposits made by the assessee. The CIT(A) upheld this addition as the assessee failed to provide sufficient evidence for the source of these deposits. The appellate tribunal found merit in the claim that Rs. 2,30,000 out of the total amount was available as cash with the assessee, directing the AO to allow this adjustment while confirming the balance addition of Rs. 1,39,000.Issue 2: Disapproval of cash withdrawals and deposits for friendly advancesThe CIT(A) disapproved the cash withdrawals and deposits made by the assessee for issuing advances through a/c payee cheques/drafts, considering the lack of proper explanation and evidence regarding the source of these transactions.Issue 3: Non-deletion of addition on account of bank deposits with tax already paidThe CIT(A) did not delete the addition on account of bank deposits, even though the appellant claimed to have already paid income tax on these amounts in relevant years. The tribunal did not find sufficient evidence to support this claim and upheld the addition.Issue 4: Allegation of illegal action by Assessing OfficerThe CIT(A) was accused of not treating the Assessing Officer's action as illegal and invalid for not issuing a show-cause notice before making the addition. However, the tribunal did not find any legal basis to support this claim and proceeded with the assessment based on the available evidence.This judgment highlights the importance of providing proper documentation and evidence to support financial transactions, especially when faced with additions to income based on unexplained sources. The tribunal emphasized the onus on the assessee to justify the nature and source of deposits, failing which such amounts may be treated as taxable income.
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