2022 (1) TMI 729 - AT - Income Tax

Tribunal Upholds Decision on Cash Deposits as Income: Lack of Evidence & Dismissal of Additional Evidence Application

The Tribunal upheld the decision to treat cash deposits in the bank account as income from unexplained sources due to the appellant's failure to provide ... Unexplained Cash deposited into Bank Accounts - income from unexplained source u/s 69B - Onus to prove - assessee had made an application for admission of additional evidences - HELD THAT:- The assessee could not substantiate its claim by filing material evidences - CIT(A) has rightly rejected the application as the same did not meet the requirement of law. As per Rule 46A of the Income Tax Rules, 1962, the assessee is required to demonstrate the cause of non-submission of evidences that is sought to be placed before Ld.CIT(A) for admission Onus cast on the Appellant has not been discharged.addition u/s 68 on account of cash deposited in bank was correct when Assessee failed to give explanation regarding the source of cash. In the case of Appellant, it is seen that no details of any of the parties from whom it claims to have received the cash along with confirmation and other details to establish the identity, creditworthiness and genuineness of the transaction has been submitted. Therefore, in view of the facts and circumstances of the case, it is held that Appellant has not been able to explain the source of cash deposits in its bank account - Decided against assessee. Disallowing loss from business - HELD THAT:- The assessee has neither given any justification regarding loss nor filed any supporting evidences. Therefore, we do not see any reason to interfere in the finding of authorities below, the same is hereby affirmed. Non admitting the additional evidences - HELD THAT:- The assessee has not substantiated as to how the application for filing additional evidence was maintainable as per Rules. In the absence of the same, no reason to interfere in the finding of Ld. CIT(A). This ground of appeal is thus, dismissed. Failure to accept cash in hand - HELD THAT:- In the absence of any supporting evidences and in the form of cash flow etc., the plea of the assessee cannot be accepted that it had cash in hand. Hence, we find no interference in the finding of authorities below, the same is hereby affirmed. Thus, Ground raised by the assessee are dismissed. Debit entries of the bank account i.e. the assessee withdrew the cash from bank to make the payments to the farmers - HELD THAT:- As the onus was upon the assessee to explain the debit and credit entries in the bank accounts. In the absence of supporting evidences, we do not see any infirmity in the order of authorities below, the same is thereby affirmed. Non-providing the sufficient opportunity to the assessee - HELD THAT:- It is seen that the assessee has been negligent in not pursuing its case before the authorities below. Even before the Assessing Officer and after seeking adjournment, no one attended the proceedings. Therefore, the assessment was framed ex-parte to the assessee. Even before Ld.CIT(A), there was no appearance on behalf of the assessee. Even before this Tribunal, there was no appearance on behalf of the assessee. Hence, the conduct of the assessee had been grossly negligent - The authorities below were justified in making the addition and sustaining the same. Ground No.10 hence, is devoid of any merit, the same is dismissed. Issues:1. Addition of cash deposits in the bank account as income from unexplained sources2. Rejection of loss from business3. Non-acceptance of additional evidence application4. Disallowance of cash in hand5. Rejection of debit entries in the bank account6. Charging of interest under sections 234A & 234B7. Imposition of penalty8. Alleged lack of sufficient opportunity provided to the assesseeAnalysis:1. The primary issue in this case revolves around the addition of cash deposits in the bank account as income from unexplained sources. The Assessing Officer treated the cash deposits as unexplained income due to the lack of explanation from the assessee. The CIT(A) upheld this decision, emphasizing the failure of the appellant to provide sufficient evidence regarding the source of the cash deposits. The Tribunal affirmed this decision, stating that the appellant failed to discharge the onus of explaining the source of the cash deposits, leading to the dismissal of the appeal.2. Another issue raised was the rejection of the loss claimed by the assessee from business. The authorities found that the assessee did not provide any justification or supporting evidence for the claimed loss. Consequently, the Tribunal affirmed the decision of the authorities, stating that there was no reason to interfere with their findings.3. The assessee also contested the non-acceptance of an application for additional evidence. The Tribunal noted that the assessee failed to demonstrate how the application for additional evidence complied with Rule 46A of the Income Tax Rules, 1962. As a result, the Tribunal dismissed this ground of appeal.4. Regarding the disallowance of cash in hand, the Tribunal upheld the decision of the authorities, stating that the appellant did not provide adequate supporting evidence to prove the existence of cash in hand. Therefore, the grounds raised by the assessee on this issue were dismissed.5. The rejection of debit entries in the bank account, where the appellant withdrew cash to make payments to farmers, was also challenged. The Tribunal affirmed the decision of the authorities, stating that the appellant failed to explain the debit and credit entries in the bank accounts with supporting evidence.6. The charging of interest under sections 234A & 234B was raised as an issue by the assessee. However, the Tribunal deemed this issue as consequential and rejected it.7. The imposition of a penalty was also contested by the assessee. The Tribunal did not adjudicate on this issue, deeming it premature at that stage.8. Lastly, the alleged lack of sufficient opportunity provided to the assessee was raised as an issue. The Tribunal noted the negligent conduct of the assessee in pursuing the case before the authorities, leading to the dismissal of this ground due to lack of merit.In conclusion, the Tribunal dismissed the appeal of the assessee based on the detailed analysis and findings on each issue presented before it.