2018 (3) TMI 1360 - HC - Income Tax

Tribunal decision on undisclosed income confirmed under Section 68 of Income Tax Act

Krishan Kumar Sethi Proprieter of M/s. Sethi Auto Centre Versus Commissioner of Income Tax-XX & Anr.

The High Court upheld the Tribunal's decision to confirm the addition of income from undisclosed sources under Section 68 of the Income Tax Act. The ... Additions u/s 68 - unexplained cash deposits - Peak cash credit - deposits were made on different dates and sometimes there were multiple deposits even on a single day. - There were also multiple withdrawals - Appellant claimed that the deposits were made in bank accounts belonging to him and his two minor sons - Held that:- Agreements to sell and receipt in cash were sham and make belief. This story was concocted after the appellant was cornered and confronted without answer before the AO, for the first time in the appellate proceedings. In view of the aforesaid factual background, we do not think that any substantial question of law arises for consideration. - additions confirmed - Decided against the assessee. Issues:1. Addition of income from undisclosed sources under Section 68 of the Income Tax Act.2. Appeal against the order of the Income Tax Appellate Tribunal.3. Deletion of addition by the Commissioner of Income Tax (Appeals).4. Remand of the matter by the High Court to the Tribunal.5. Confirmation of addition by the Tribunal.Analysis:1. The appellant declared taxable income from the business of sale/purchase/financing and income from house property. The Assessing Officer made an addition of income from undisclosed sources due to unexplained cash deposits in bank accounts. The appellant explained receiving cash advances for property sale, leading to deletion of the addition by the Commissioner of Income Tax (Appeals).2. The Revenue appealed against the deletion, which was allowed by the Tribunal, leading to the appellant filing an appeal under Section 260A. The High Court partly allowed the appeal, remanding the matter to the Tribunal for fresh consideration based on procedural irregularities.3. Post remand, the appellant submitted relevant documents, but the Tribunal confirmed the addition of income from undisclosed sources. The appellant contended that the Tribunal's decision was flawed, as the evidence provided was not duly considered, and further scrutiny should have been conducted by the Assessing Officer.4. The High Court rejected the appellant's contentions, emphasizing the factual discrepancies in the case. The appellant failed to provide a timely explanation for cash deposits and the purported property sale transactions. The Tribunal found the agreements and cash receipts to be fabricated, dismissing the appeal due to lack of substantial legal questions.In conclusion, the High Court upheld the Tribunal's decision to confirm the addition of income from undisclosed sources, as the appellant's explanations were deemed implausible and lacking in evidentiary support.