2015 (10) TMI 582 - AT - Income Tax

Tribunal decision: Partial allowance of appeal on unexplained income, low withdrawals upheld

The Tribunal partially allowed the assessee's appeal by deleting the addition of Rs. 6,00,000 as unexplained income deposited with a partnership firm. ... Unaccounted deposits - unexplained income - main reason on which the addition has been sustained is to the effect that the assessee could not give proper explanation as to how an amount of ₹ 6.00 lacs was lying at home more so assessee being an old aged person, it did not meet the preponderance of probabilities - Held that:- has been made mainly relying on the fact that the assessee was an old person and living alone and there was a time gap of 10 months for keeping the cash at home which was not possible on preponderance of probabilities. It may be mentioned that assessee while explaining the low house hold withdrawals assessee had already submitted before the lower authorities that he was living in a joint family of two sons. With these facts on record, there was no reason for the lower authorities to hold that the assessee was living alone which could be the reason for any adverse inference that cash in hand could not be retained by the assessee for 10 months. There is no factual basis in the presumption drawn by the AO and the ld. CIT(A), besides the assessee may be aged but remained active in his business affairs. Consequently we see no justification in addition of ₹ 6 lacs more so when the facts about cash books, cash flow and receipt of cheque of ₹ 13 lacs from M/s. S.G. Fiscal have not been controverted. In view thereof, we are unable to uphold the addition of ₹ 6.00 lacs which is deleted. - Decided in favour of assessee. Low house hold withdrawals - Held that:- The assessee is an active person, earning from two partnership firms. It has been contended that his two sons have borne the house hold expenses and have sufficient withdrawals. There is no evidence on record to demonstrate that quantum of withdrawals by two sons and statement to the fact that their father did not contribute any house hold expenses. Beside the size of their family and extent of house hold withdrawals have no evidence on record to hold that assessee's version is correct. Thus in these facts and circumstances of the case assessee’s explanation is not corroborated by any iota of evidence. In view thereof, we hold that an addition of ₹ 1.00 lac on account of house hold withdrawals has rightly been made by the lower authorities which is upheld. - Decided against assessee. Issues:1. Addition of Rs. 6,00,000 as unexplained income deposited with a partnership firm.2. Addition of Rs. 1,00,000 on account of alleged low withdrawals.3. Charging and withdrawal of interest u/s 234 & 234D of the Act and u/s 244A of the Act.Issue 1: Addition of Rs. 6,00,000 as unexplained income deposited with a partnership firm:The assessee deposited Rs. 6,00,000 in cash with a partnership firm, claiming it to be brought forward cash from earlier years. The Assessing Officer (AO) found discrepancies and added the amount to the total income of the assessee. The CIT(A) upheld the addition, noting a 10-month gap between the last withdrawal and the deposit, which seemed improbable. The CIT(A) emphasized the lack of evidence supporting the claim and shifted the burden of proof to the appellant. The Tribunal observed that the appellant lived with his sons, refuting the assumption of living alone. Considering the evidence provided, including cash books and monthly statements, the Tribunal found no justification for the addition and deleted the Rs. 6,00,000.Issue 2: Addition of Rs. 1,00,000 on account of alleged low withdrawals:The AO estimated Rs. 1,00,000 for personal expenses due to the lack of withdrawals shown by the assessee. The CIT(A) agreed with the AO, emphasizing that an active person like the assessee would incur personal expenses. The Tribunal noted the absence of evidence supporting the claim that the sons covered all household expenses, leading to the dismissal of the appeal on this issue. The addition of Rs. 1,00,000 for low withdrawals was upheld.Issue 3: Charging and withdrawal of interest u/s 234 & 234D of the Act and u/s 244A of the Act:The issue of charging and withdrawal of interest under sections 234 & 234D and section 244A of the Act was deemed consequential and required no further adjudication by the Tribunal. Therefore, this issue was not discussed in detail, and the Tribunal did not make any changes to the lower authorities' decisions regarding interest charges and withdrawals.In conclusion, the Tribunal partially allowed the assessee's appeal by deleting the addition of Rs. 6,00,000 as unexplained income deposited with a partnership firm, while upholding the addition of Rs. 1,00,000 for alleged low withdrawals. The issue concerning the charging and withdrawal of interest under specific sections of the Act was considered consequential and not further addressed.