2019 (11) TMI 27 - AT - Income Tax

Appeal dismissed, unexplained cash deposits sustained. Verify evidence, act on false affidavits.

Padam Lal Dua Versus Income Tax Officer Ward- 2 (1) Faridabad

Padam Lal Dua Versus Income Tax Officer Ward- 2 (1) Faridabad - TMI Issues Involved:1. Addition of Rs. 26,65,000/- on account of unexplained cash deposits in the bank account.2. Admission and consideration of additional evidence under Rule 46A of the IT Rules.3. Opportunity to cross-examine the individuals who submitted affidavits.4. Consideration of the rejoinder filed by the assessee against the remand report.5. Action against individuals who deviated from their original affidavits.Issue-wise Detailed Analysis:1. Addition of Rs. 26,65,000/- on account of unexplained cash deposits:The assessee declared total income of Rs. 1,58,400/- under 'salary' and Rs. 31,800/- under 'income from other sources.' However, the Assessing Officer (AO) noted cash deposits totaling Rs. 26,50,000/- in the assessee's bank account, which were unexplained. Consequently, the AO made an addition of Rs. 26,65,000/- to the total income on account of unexplained cash deposits. The CIT(A) initially sustained this addition, but upon remand by the Tribunal, the CIT(A) deleted Rs. 6,80,000/- and sustained Rs. 19,85,000/-.2. Admission and consideration of additional evidence under Rule 46A of the IT Rules:During the remand proceedings, the assessee submitted additional evidence, including affidavits from various individuals claiming to have provided the cash deposits. The CIT(A) admitted these additional evidences and forwarded them to the AO for comments and a remand report. The AO objected to the admission of additional evidence due to non-compliance by the assessee during the initial proceedings but also provided a report on the merits of each addition.3. Opportunity to cross-examine the individuals who submitted affidavits:The assessee contended that the CIT(A) upheld the addition without providing an opportunity to cross-examine the individuals who had deviated from their original affidavits. The CIT(A) relied on the statements made during the remand proceedings, where individuals like Sh. Anil Sachdeva and Sh. Sanjay Khattar denied having given the cash amounts or signing the affidavits. The Tribunal found that the assessee's argument about the lack of cross-examination opportunity was invalid, as the individuals had clearly denied the affidavits' authenticity.4. Consideration of the rejoinder filed by the assessee against the remand report:The assessee argued that the CIT(A) did not properly consider the rejoinder filed against the AO's remand report. However, the Tribunal noted that the CIT(A) had thoroughly examined the remand report and the rejoinder, and made a reasoned decision based on the evidence and statements obtained during the remand proceedings.5. Action against individuals who deviated from their original affidavits:The CIT(A) directed the AO to share the statements of the individuals (Sh. Anil Sachdeva, Sh. Sanjay Khattar, Sh. Prakash Sachdeva, and Ms. Bhawna Narula) with the respective AOs for taking suitable action under the Income Tax Act and other statutory provisions. The Tribunal upheld this directive, emphasizing the need for appropriate action against those who deviated from their original affidavits.Conclusion:The Tribunal dismissed the appeal filed by the assessee, upholding the CIT(A)'s decision to sustain the addition of Rs. 19,85,000/- out of the total addition of Rs. 26,65,000/-. The Tribunal found no infirmity in the CIT(A)'s order, which was based on a detailed examination of the remand report, additional evidence, and the statements of the individuals involved. The Tribunal emphasized the importance of proper verification and the need for action against individuals who provided false affidavits.