Rule 46A evidence, unverifiable purchases, TDS disallowance and peak credit addition all sustained in income tax appeal.

ITAT Jaipur declined admission of additional evidence under Rule 46A because the assessee did not satisfy any exception and had persistently failed to comply before the Assessing Officer. It sustained the trading addition on unverifiable purchases by applying a 15% restriction, upheld the disallowance under section 40(a)(ia) for admitted non-deduction of tax at source on part of the expenditure, and maintained the peak credit addition for cash deposits treated as a revolving trail with no contrary evidence. It also rejected the Chapter VI-A deduction claim for want of proof of LIC premium payment. The assessee's appeal failed on all grounds.

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Issues: (i) Whether additional evidence could be admitted under Rule 46A of the Income-tax Rules, 1962. (ii) Whether the trading addition on account of unverifiable purchases was required to be restricted further. (iii) Whether the disallowance under section 40(a)(ia) of the Income-tax Act, 1961 for non-deduction of tax at source was sustainable. (iv) Whether the addition on account of cash deposits in bank accounts was to be restricted on peak credit basis or deleted. (v) Whether the claim of deduction under Chapter VI-A of the Income-tax Act, 1961 was allowable.

Issue: Whether additional evidence could be admitted under Rule 46A of the Income-tax Rules, 1962.

Analysis: The assessee failed to show that the case fell within any of the exceptions in Rule 46A. The Assessing Officer had given multiple opportunities, and the record showed persistent non-compliance. The appellate authority, therefore, declined to admit the additional evidence and decided the matter without taking it into account.

Conclusion: Additional evidence was not admissible and the finding was against the assessee.

Issue: Whether the trading addition on account of unverifiable purchases was required to be restricted further.

Analysis: The purchases remained unverifiable because the books and supporting material were not produced before the Assessing Officer. The appellate authority applied the settled approach followed by the Jaipur Bench in such cases and restricted the addition to 15% of the purchases. The Tribunal found no infirmity in that approach.

Conclusion: The restricted trading addition was sustained against the assessee.

Issue: Whether the disallowance under section 40(a)(ia) of the Income-tax Act, 1961 for non-deduction of tax at source was sustainable.

Analysis: The assessee admitted non-deduction of tax at source on a part of the expenditure, namely Rs. 73,714/-. The remaining items were directed to be verified from the TDS return, but the admitted default justified the sustained disallowance.

Conclusion: The disallowance under section 40(a)(ia) was upheld against the assessee.

Issue: Whether the addition on account of cash deposits in bank accounts was to be restricted on peak credit basis or deleted.

Analysis: The deposits and withdrawals were treated as part of a revolving cash trail, and the appellate authority applied the peak credit principle. On the facts, no contrary material showed diversion of withdrawals for separate investment or expenditure beyond the peak worked out by the appellate authority.

Conclusion: The peak credit addition was sustained against the assessee.

Issue: Whether the claim of deduction under Chapter VI-A of the Income-tax Act, 1961 was allowable.

Analysis: The assessee did not furnish supporting evidence for the claimed LIC premium payment even at the appellate stage. In the absence of proof, the deduction claim could not be accepted.

Conclusion: The Chapter VI-A deduction was disallowed against the assessee.

Final Conclusion: The Tribunal found no reason to interfere with the appellate findings on any of the grounds and the assessee's appeal failed in full.

Ratio Decidendi: Additional evidence cannot be admitted at the appellate stage unless the conditions of Rule 46A are satisfied, and unverifiable or unexplained tax claims must be rejected where the assessee fails to discharge the evidentiary burden.

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