Dismissal of Stay Application & Appeal Upheld for Unexplained Money & Violation

The Stay Application was dismissed due to the assessee's lack of interest in prosecuting the matter, leading to its deemed meritless dismissal. The addition of unexplained money under sec. 69A r.w.s. 115BBE and violation of sec. 40A(3) provisions were upheld by the Tribunal, as the assessee failed to provide sufficient evidence and explanations, resulting in the dismissal of the appeal. The Appellate Tribunal ITAT PANAJI pronounced the order openly on 25th August, 2023.

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Issues:
1. Stay Application dismissal due to lack of interest in prosecuting the matter.
2. Addition of unexplained money under sec. 69A r.w.s. 115BBE and violation of sec. 40A(3) provisions.

Stay Application Dismissal:
The Stay Application was dismissed as the assessee did not put forth any arguments at the time of hearing, indicating a lack of interest in prosecuting the matter. Consequently, the Stay Application was deemed devoid of merits and dismissed.

Addition of Unexplained Money:
The assessee, engaged in poultry farming, had deposited significant amounts in cash during demonetization. The AO added the deposited amount to the total income as unexplained money under sec. 69A r.w.s. 115BBE. The assessee's explanation that the deposits were from sale proceeds was not accepted. The AO also found that cash payments towards purchases violated sec. 40A(3), adding a substantial amount to the total income. The NFAC upheld the AO's decision as the assessee failed to provide evidence of cash collections in Specified Bank Notes (SBNs) or details of customers during demonetization. The Tribunal found no infirmity with the NFAC's order and upheld it.

Violation of Sec. 40A(3) Provisions:
Regarding the addition made under sec. 40A(3), the AO had conducted verification and found that cash payments for purchases contravened the provisions. The NFAC noted the lack of documentary evidence from the assessee to support the claim of not violating sec. 40A(3). The assessee's reliance on the exception of Rule 6DD of the Income Tax Rules was not substantiated with any materials before the Tribunal. Consequently, the Tribunal upheld the NFAC's findings, leading to the dismissal of the grounds of appeal.

In conclusion, both the Stay Application and the appeal filed by the assessee were dismissed by the Appellate Tribunal ITAT PANAJI, with the order pronounced openly on 25th August, 2023.

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