2019 (3) TMI 504 - AT - Income Tax

Tribunal dismisses appeal for unexplained cash credit but allows appeal for undisclosed income.

The Tribunal dismissed the appeal for AY 2010-11, upholding the addition of Rs. 38,05,000 as unexplained cash credit due to the assessee's failure to ... Unexplained cash deposits in bank account - major sources of money claimed are from amount received on sale of jewellery; amount received from lease of agricultural land; and saving in the form of PIN money - assessee claimed that out of the above cash deposits, he made demand draft for depositing with HUDA for allotment of plot of land in the name of the mother of the assessee. It is claimed that due to non-allotment of the plot, the said amount was refunded to the mother of the assessee and deposited in her bank account - AY 2010-11 - HELD THAT:- Counsel has claimed that summons were issued to the jeweller and alleged lessee of the agricultural land at the fag end of the assessment proceeding and therefore those persons could not attend before the Assessing Officer. But we are unable to understand as why the assessee did not raise this issue before the CIT(A) and sought to file additional evidence for producing those persons. But no efforts were made by the assessee either for producing those persons before the Ld. CIT(A) or seeking issue of the fresh summons for producing those persons. Even no such request has been made before us also. The assessee was required to establish that ₹ 2 lakh was received from the so-called lessee of the land and in absence of which, proof of ownership of the landholding itself are not relevant to explain the source of the money. In such circumstances, the burden of proof of the assessee remained undischarged regarding the source and nature of the cash deposits of ₹ 11,80,000/-in the bank accounts of the assessee. The claim of cash in hands of more than ₹ 6 lakh with the mother of the assessee is against the normal conduct of the human probability , when she has withdrawn a small amount of money from the bank during that period. - Decided against assessee Undisclosed income of the assessee company - undisclosed deposits in bank - assessment year 2011-12 - assessee claimed that cash flow statement was filed before the AO whereas CIT(A) observed that same was not filed before the AO and it was in the nature of the additional evidence and being no application filed by the assessee for admitting the additional evidences, he rejected the cash flow statement submitted by the assessee - HELD THAT:- The claim of the assessee that deposits stands explained in view of the withdrawals, should not be brushed aside without verifying only on the ground that same was not submitted before the AO and in the nature of additional evidence. The verification of the above claim of the assessee is crucial for holding whether the said cash deposits was explained or unexplained. CIT(A) should have given opportunity to the assessee for filing the application for additional evidence or should have verified the record of the AO but rejecting the same without examining would amount to denial of justice to the assessee. In view of the above circumstances, we feel it appropriate to restore this issue of addition to the file of AO with the directions to verify the claim of the assessee of withdrawal of the money from bank accounts to justify the cash deposits Issues Involved:1. Addition of unexplained cash credit of Rs. 38,05,000 for AY 2010-11.2. Addition of Rs. 47,10,000 as undisclosed income for AY 2011-12.Issue-Wise Detailed Analysis:1. Addition of Unexplained Cash Credit of Rs. 38,05,000 for AY 2010-11:The assessee, a salaried employee, filed a return of income declaring Rs. 44,17,400. During scrutiny, the Assessing Officer (AO) observed cash deposits of Rs. 38,05,000 in the assessee's bank account. The assessee explained that Rs. 26,25,000 was received as an advance for the sale of agricultural land and Rs. 11,80,000 from his mother for applying for HUDA plots. However, the AO was not satisfied and added the entire amount as unexplained cash credit along with Rs. 18,298 as bank interest.The Commissioner of Income-tax (Appeals) [CIT(A)] upheld the AO's decision, rejecting the assessee's explanations. The Tribunal noted that the assessee failed to produce adequate evidence to substantiate the sources of the cash deposits. Specifically, the sale of jewelry and agricultural income were not convincingly proven, and the claim of substantial cash savings by the mother was deemed improbable. Consequently, the Tribunal dismissed the appeal for AY 2010-11, maintaining the addition of Rs. 38,05,000 as unexplained cash credit.2. Addition of Rs. 47,10,000 as Undisclosed Income for AY 2011-12:For AY 2011-12, the assessee declared an income of Rs. 19,67,400 but was found to have deposited Rs. 47,10,000 in cash in his bank account. The AO questioned the source of these deposits. The assessee admitted Rs. 9,00,000 (Rs. 2,00,000 from agricultural income and Rs. 7,00,000 from business income) as unexplained but claimed the remaining Rs. 38,10,000 was from cash withdrawals from various bank accounts.The CIT(A) rejected this claim due to a lack of supporting evidence and sustained the addition. However, the Tribunal found that the CIT(A) should have verified the assessee's claim regarding the cash withdrawals. Therefore, it restored the issue to the AO for a detailed verification of the cash flow statement and relevant bank statements. The Tribunal directed the AO to provide the assessee with an opportunity to substantiate his claim and conduct necessary verifications.Conclusion:- For AY 2010-11: The appeal was dismissed, and the addition of Rs. 38,05,000 as unexplained cash credit was upheld.- For AY 2011-12: The appeal was allowed for statistical purposes, with the issue of Rs. 38,10,000 being remanded to the AO for further verification.