2017 (5) TMI 1842 - AT - Income Tax

Revision under s.263 upheld: unexplained bank deposits treated as non-business income; set-off of brought-forward losses disallowed

ITAT Mumbai (AT) dismissed the assessee's appeal and upheld the Principal CIT's revision under s.263. The AO had treated unexplained bank deposits ... Validity of revision u/s 263 - addition of unexplained bank deposits u/s. 68 - assessed the same as business income of the assessee and accordingly allowed set off of brought forward losses - CIT took the view that addition made u/s. 68 of the Act should not have been treated as “business income” of the assessee - HELD THAT:- We noticed that the assessee has not filed any material to show that the AO did examine this issue and has taken possible view of the matter. Further the assessee has also failed to show that the view taken by learned Principal CIT is not sustainable. Under these set of facts, we have no other option but to confirm the order passed by learned Principal CIT. Appeal filed by the assessee is dismissed. Assessee, a transport and container-handling contractor, filed return declaring Rs.13.15 lakhs. Assessment u/s.143(3) added unexplained bank deposits of Rs.1,59,93,300 u/s.68 and treated them as 'business income', allowing set-off of brought-forward losses. Principal CIT held that the addition 'should not have been treated as 'business income'' but 'should have been assessed as income from other sources', concluding the assessment order was 'erroneous and prejudicial to the interest of Revenue' and directed reassessment of the unexplained deposits under the head 'income from other sources' after giving the assessee an opportunity of hearing. Assessee did not appear at the ITAT hearing despite service and filed no material to show the AO examined or reasonably took a contrary view. ITAT, after hearing the Departmental Representative, confirmed the revision order and dismissed the appeal.