Appeal dismissed for unexplained cash deposits under Income Tax Act

The ITAT dismissed the appeal filed by the assessee, affirming the addition of unexplained cash deposits under section 68 of the Income Tax Act. The ITAT found the explanations provided regarding the source of the cash deposits to be not credible, particularly the alleged sale and repurchase of shares in a delisted company. The decision of the Ld CIT(A) to uphold the addition of Rs. 28,18,300 was confirmed, concluding that the cash deposits were unexplained and should be treated as unexplained cash credits under section 68.

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Issues:
- Delay in filing the appeal
- Addition of unexplained cash deposits under section 68 of the Income Tax Act

Delay in filing the appeal:
The appeal was filed by the assessee against the order passed by the Ld CIT(A)-31, Mumbai, which was found to be barred by limitation by 9 days. The assessee submitted a petition requesting the Bench to condone the delay, which was not objected to by the Ld D.R. Consequently, the delay was condoned, and the appeal was admitted.

Addition of unexplained cash deposits under section 68:
The assessee contested the addition of Rs. 28,18,300 made by the assessing officer under section 68 of the Income Tax Act. The assessee, engaged in various businesses, including dealing in DEPB licenses and trading, had made cash deposits in different bank accounts without providing details to explain the source of these deposits. The assessing officer treated these deposits as unexplained cash credits.

Before the Ld CIT(A), the assessee argued that the cash deposits were not unexplained cash credits under section 68 but should be considered under section 69 of the Act. The assessee claimed that the deposits were from the sale of shares in a company named M/s Orbit Polyster, supported by new evidence. The Ld CIT(A) called for a remand report from the AO, who confirmed the cash deposits and the lack of evidence regarding the sale and purchase of shares.

The Ld CIT(A) upheld the addition of Rs. 28,18,300, stating that the explanations provided by the assessee were not substantiated. The parties involved in the alleged share transactions could not provide necessary documentation, and the transactions seemed implausible. The Ld CIT(A) concluded that the cash deposits were unexplained and should be treated as unexplained cash credits under section 68.

The assessee appealed to the ITAT, reiterating the source of the cash deposits as the sale proceeds from shares. However, the ITAT found that the explanations provided by the assessee were not credible. The alleged sale and repurchase of shares in a delisted company were deemed beyond human probabilities, and the Ld CIT(A)'s decision to confirm the addition of Rs. 28,18,300 was upheld.

In conclusion, the ITAT dismissed the appeal filed by the assessee, affirming the addition of unexplained cash deposits under section 68 of the Income Tax Act.

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