2017 (2) TMI 176 - AT - Income Tax

Tribunal affirms CIT(A)'s decision on unexplained cash deposits & income enhancement. /69A

The tribunal upheld the CIT(A)'s decision to confirm the addition of Rs. 14,92,294 as unexplained cash deposits under Section 68 of the Income Tax Act, ... Unexplained cash deposits u/s 68 - Held that:- It is noted that Ld. CIT(A) has brought out various contradictions, gaps and loopholes in the confirmation and other evidences filed by the assessee to establish the source of cash received from the aforesaid persons. It was submitted by the Ld. DR that it is a clear case whether the assessee has introduced, its unaccounted income in the form of cash deposits into bank account. In absence of anything brought before us to negate the factual findings and analysis made by Ld. CIT(A), we do not find any reason to make any interference in the order of Ld. CIT(A). The findings recorded by the Ld. CIT(A) are based upon the proper analysis and detailed reasoning and no perversity could be noted by us in the order of the Ld. CIT(A). Under these circumstances, we uphold the order passed by the Ld. CIT(A) and dismiss the grounds raised by the assessee. - Decided against assessee. Issues Involved:1. Confirmation and non-quashing of the assessment order passed by the Assessing Officer (AO) under Section 143(3) read with Section 144 of the Income Tax Act, 1961.2. Jurisdiction of the Commissioner of Income Tax (Appeals) [CIT(A)] in invoking enhancement powers and making an addition under Sections 69/69A of the Income Tax Act, 1961.Issue-wise Detailed Analysis:Issue 1: Confirmation and Non-Quashing of the Assessment OrderThe assessee challenged the CIT(A)'s decision to confirm the addition of Rs. 14,92,294 made by the AO under Section 68 of the Income Tax Act, 1961. The AO noted that the assessee, who operated a fast food and juice center, had deposited substantial cash amounts in two bank accounts. Despite multiple notices, the assessee failed to explain the source of these deposits. Consequently, the AO treated the peak credits in the accounts as unexplained cash deposits under Section 68 and made the addition accordingly.During appellate proceedings, the assessee claimed that the cash deposits were advances from clients for a business that never materialized. The CIT(A) noted that the assessee provided fresh evidence, which was forwarded to the AO for verification. The AO's remand report indicated that the assessee failed to substantiate the source of the cash deposits, leading the CIT(A) to uphold the addition made by the AO.Issue 2: Jurisdiction of CIT(A) in Invoking Enhancement PowersThe assessee also contested the CIT(A)'s decision to enhance the income by Rs. 38,83,900 under Sections 69/69A. The CIT(A) found that the entire cash deposits in the bank accounts remained unexplained and felt that the addition made by the AO was insufficient. The CIT(A) issued an enhancement notice to the assessee, who failed to respond adequately.The CIT(A) observed that the assessee's claim of receiving advances from various persons for flat bookings was unsubstantiated. The CIT(A) noted discrepancies in the amounts claimed and the lack of documentary evidence to support the financial capacity of the individuals who allegedly provided the advances. The CIT(A) concluded that the assessee had concocted a story to explain the unaccounted cash deposits and directed that the entire amount of Rs. 38,83,900 be added under Sections 69/69A.Conclusion:The tribunal upheld the CIT(A)'s order, noting that the assessee failed to provide any evidence to counter the detailed factual findings and analysis made by the CIT(A). The tribunal found no reason to interfere with the CIT(A)'s order, which was based on proper analysis and detailed reasoning. Consequently, the appeal filed by the assessee was dismissed.The order was pronounced in the open court at the conclusion of the hearing.