2019 (8) TMI 1426 - AT - Income Tax

Assessee's Appeals Dismissed for Lack of Evidence on Cash Flow, Agricultural Income, & Deposits

The appeals for various assessment years were mostly dismissed due to the assessee's failure to provide sufficient evidence to substantiate their claims ... Rejection of cash flow statement - During the course of search cash was found from the premises of the assessee and also cash deposited in the various bank accounts - assessee has submitted the cash flow statement which was considered as an afterthought and without supporting with relevant evidences - HELD THAT:- As discussed above the assessee has failed to substantiate the transactions reflected in the cash-flow statement with relevant supporting evidences at the time of assessment proceedings before the AO and also at the time of appellate proceedings before the Ld. CIT(A). Even at the time of appellate proceedings before the assessee has failed to controvert the findings of the Ld. CIT(A). The assessee has furnished mere cash-flow statement but failed to establish its genuineness with relevant supporting evidences. After perusal of the material on record we consider that Ld. CIT(A) has rightly held that the cash-flow statement was prepared after the search action which was not based on relevant supporting evidences. Therefore, we do not find any infirmity in the decision of Ld. CIT(A). Accordingly, this ground of appeal of the assessee is dismissed. Reducing the agricultural income - CIT(A) has partly allowed the appeal of the assessee in spite of not furnishing the supporting evidences as sale bill of agricultural production etc - HELD THAT:- It is undisputed fact that assessee has filed NIL agricultural income vide return of income filed u/s. 139(1) for all the years except A.Y. 2009-10. In respect of A.Y. 2008-09, 2010-11 the assessee has not shown any agricultural income in the original return of income filed u/s. 139(1) of the Act, however, in the return filed u/s. 153A of the Act the assessee has shown agricultural income of ₹ 80,000/- per year in all the assessment years and failed to substantiate the claim of earning agricultural income with supporting evidences sale bill etc, consequently, the AO has disallowed the claim of agricultural income. However, the Ld. CIT(A) on the basis of ownership of land has allowed the claim of agricultural income to the extent of ₹ 60,000/- for A.Y. 2008-09, ₹ 80,000/- for A.Y. 2009-10 ₹ 80,000/- A.Y. 2010-11 and ₹ 1,00,000/- for A.Y. 2011-12 stating that ownership of land cannot negate the effect of having natural agricultural income in spite of not producing any supporting bill and voucher of sale of agricultural production. In the light of the above fact we observe that Ld. CIT(A) has granted sufficient relief to the assessee in spite of the facts that assessee was not having supporting bill/voucher for sale of agricultural produce and the assessee has not claimed any agricultural income in the original return of income filed u/s. 139(1) of the Act. Therefore, we do not find any substance in the appeal of the assessee Repayment of loan by Shri O P Singh - HELD THAT:- It is stated that during the course of assessment proceeding and appellate proceeding the assessee was asked to furnish the source of cash deposit in to various bank account with documentary evidences. The assessee has submitted cash flow statement but has not furnished the supporting documentary evidences in support of receipt of cash before the AO and before the Ld. CIT(A). Considering the above facts the assessee has failed to substantiate along with relevant supporting evidence that the aforesaid cash deposit of ₹ 1,00,000/- was accounted in the books of account of the assessee with relevant supporting evidences, therefore, we do not find any merit in the appeal of the assessee and the same is dismissed. Addition u/s. 153 - agricultural income for which no incriminating material found during search - HELD THAT:- We do not find any substance in the ground of appeal of the assessee as the facts are different as mentioned above in this order because as per the original return of income filed u/s. 139(1) of the Act, the assessee has shown NIL return of income however, as per the return of income filed u/s. 153 of the Act the assessee has herself shown the agricultural income in the different assessment year. In view of the above facts, we do not find any substance in the appeal of the assessee the same is dismissed. Reducing the opening balance as on 01.04.2004 from ₹ 5,00,000 to ₹ 2,00,000 - HELD THAT:- During the course of appellate proceeding the assessee has contended that cash was generated from sale of jewellery but the assessee could not establish that any capital gain from the sale of jewellery was disclosed for A.Y. 2004-05. The assessee could not substantiate the same by furnishing copy of return of income. The Ld. CIT(A) has also verified from the copy of intimation u/s. 143(1) that there was not detail of any computation of capital gain on account of sale of jewellery. In view of the aforesaid material facts the Ld. CIT(A) has considered that it was reasonable to hold an amount of ₹ 2,00,000/- available in the hand of the assessee as on 01.04.2004. We consider that in spite of giving a number of opportunities the assessee could not establish that cash was generated on account of sale of jewellery. Therefore, we do not find any merit in the appeal of the assessee. The same is dismissed. Increase in the household withdrawal from the cash in hand with the assessee - HELD THAT:- The assessee has claimed that the Ld. CIT(A) has not made any enhancement in respect of household expenses and no such direction was given to the AO to increase the withdrawal of household expenses. We consider that it will be appropriated to restore this issue to the file of the AO to decide afresh and pass a speaking order after examination of the direction of the Ld. CIT(A). Accordingly, this issue is restored to the file of the AO for deciding a fresh as directed above, therefore, this ground of appeal is allowed for statistical purposes. Disallowance of indexation claim of long term capital gain - HELD THAT:- we consider that in spite of giving sufficient opportunities during the course of assessment proceeding and during the course of appellate proceeding the assessee has failed to substantiate with relevant evidences of her claim that the gold jewellery was purchased on or before 01.05.1981. Even during the course of appellate proceeding before us the assessee has failed to demonstrate with relevant supporting evidences that gold ornament was purchased before 01.05.1981. In the light of the above facts and circumstances we consider that Ld. CIT(A) has rightly allowed the indexation with effect from 01.05.2000 as against the indexation allowed by the AO with effect from 27.02.2003. Therefore, the appeal of assessee is dismissed. Unexplained cash for not proving the genuineness and creditworthiness of the transaction - HELD THAT:- Considering the submission of the assessee the Ld. CIT(A) has directed the AO to verify from the bank statement of the Kavita Gupta and if the withdrawal was made from the bank account as per the bank statement then it will be treated that the source of cash has been explained. In the light of the above facts and circumstances, we do not find any substance in the appeal of the assessee since the assessee has not submitted the copy of bank statement of Kavita Gupta before the Ld. CIT(A) at the time of adjudicating of the issue involve in the appeal. Accordingly, this appeal of the assessee is dismissed. Re-computing the income without giving credit of opening balance - HELD THAT:- After hearing the rival contentions and perusal of material on record we restore this issue to the file of the AO for deciding afresh after verification of the relevant material referred by the assessee. Accordingly, this ground of appeal of the assessee is allowed for statistical purposes. Issues Involved:1. Rejection of cash flow statement.2. Reduction of agricultural income by Rs. 1,20,000.3. Unexplained cash deposits.4. Additions under Section 153A without incriminating material.5. Reduction of opening cash balance from Rs. 5,00,000 to Rs. 2,00,000.6. Increase in household withdrawal by Rs. 85,800.7. Disallowance of indexation claim of long-term capital gain from A.Y. 1981-82.8. Unexplained cash deposit of Rs. 85,000.9. Unexplained cash deposit of Rs. 1,50,000 and Rs. 10,44,946.10. Rejection of explanation of cash receipt of Rs. 3,69,000.11. Re-computation of income without credit of opening balance of Rs. 21,000.Detailed Analysis:First Ground of Appeal: Rejection of Cash Flow StatementThe assessee failed to substantiate the transactions reflected in the cash-flow statement with relevant supporting evidences during the assessment and appellate proceedings. The cash-flow statement was considered an afterthought and not based on concrete supporting evidence. Consequently, the rejection of the cash flow statement by CIT(A) was upheld.Second Ground of Appeal: Reduction of Agricultural Income by Rs. 1,20,000The assessee failed to provide sale bills or other evidence to substantiate the agricultural income claimed. The CIT(A) allowed partial relief based on the ownership of agricultural land, granting agricultural income of Rs. 60,000 for A.Y. 2008-09, Rs. 80,000 for A.Y. 2009-10, Rs. 80,000 for A.Y. 2010-11, and Rs. 1,00,000 for A.Y. 2011-12. The appeal was dismissed as the assessee could not provide supporting evidence.Third Ground of Appeal: Unexplained Cash DepositsThe assessee claimed a repayment of loan of Rs. 1,00,000 by Shri O P Singh but failed to produce supporting evidence. The CIT(A) upheld the AO's disallowance of the cash deposit due to lack of evidence, and the appeal was dismissed.Fourth Ground of Appeal: Additions under Section 153A Without Incriminating MaterialThe assessee argued that additions were made without any incriminating material found during the search. However, the assessee had shown agricultural income in the return filed under Section 153A, which was not claimed in the original return. The appeal was dismissed as the facts did not support the assessee's claim.Fifth Ground of Appeal: Reduction of Opening Cash Balance from Rs. 5,00,000 to Rs. 2,00,000The CIT(A) reduced the opening cash balance due to the assessee's failure to substantiate the claim with evidence. The assessee's contention that cash was generated from the sale of jewelry was not supported by any capital gain disclosure in the return of income. The appeal was dismissed.Sixth Ground of Appeal: Increase in Household Withdrawal by Rs. 85,800The assessee disputed the increase in household expenses added by the AO. The issue was restored to the AO to decide afresh and pass a speaking order after examining the CIT(A)'s directions. This ground of appeal was allowed for statistical purposes.Seventh Ground of Appeal: Disallowance of Indexation Claim of Long-Term Capital Gain from A.Y. 1981-82The AO and CIT(A) disallowed the indexation claim from A.Y. 1981-82 due to the assessee's failure to provide purchase evidence of the gold jewelry. The CIT(A) allowed indexation from 01.04.2000 instead of 27.02.2003. The appeal was dismissed as the assessee could not substantiate the claim.Eighth Ground of Appeal: Unexplained Cash Deposit of Rs. 85,000The assessee claimed the cash deposit comprised a loan repayment of Rs. 25,000 and a loan of Rs. 60,000 from an associate. The appeal was dismissed as the facts and issues were similar to those in A.Y. 2008-09, where the assessee failed to substantiate the source of cash deposits with evidence.Ninth Ground of Appeal: Unexplained Cash Deposit of Rs. 1,50,000 and Rs. 10,44,946The assessee claimed to have received Rs. 1,50,000 from a relative and Rs. 45,50,000 as imprest money from Technosys. The CIT(A) directed the AO to verify the bank statement of the relative. The assessee failed to provide evidence of the cash receipt from Technosys, and the appeal was dismissed.Tenth Ground of Appeal: Rejection of Explanation of Cash Receipt of Rs. 3,69,000The assessee failed to substantiate the genuineness of the cash receipt with evidence. The detailed findings of the CIT(A) were upheld, and the appeal was dismissed.Eleventh Ground of Appeal: Re-computation of Income Without Credit of Opening Balance of Rs. 21,000The assessee contended that the AO did not give credit for the opening balance of Rs. 21,000. The issue was restored to the AO for verification and re-computation. This ground of appeal was allowed for statistical purposes.Conclusion:The appeals for A.Y. 2008-09, A.Y. 2009-10, A.Y. 2010-11, and A.Y. 2011-12 were mostly dismissed, with specific grounds allowed for statistical purposes. The order was pronounced in open court on 01/08/2019.