2020 (1) TMI 348 - AT - Income Tax

Reopening of assessment u/s 147 - cash deposits in the bank account of the assessee maintained with the ICICI Bank - gifts received from the relatives with or without occasions - HELD THAT - In the absence of return of income originally filed u/s 139(1) of the Act coupled with huge amounts of cash deposits is good enough to contribute the formation of reason to believe that this is a case of escapement of income. As mentioned in the open Court proceed to dismiss the legal ground no.1 and 2 raised by the assessee. Gifts received - Gifts are given to the assessee from among the close relatives only. However these gifts were given with or without any special occasions. The source of sources argument is the only defence from the assessee s side. However the assessee failed to discharge the onus cast on him with reference to the credibility of the transactions and creditworthiness of the donors and the documentation furnished by the assessee is inadequate and the explanations given by the assessee are general in nature. It is not the case of the assessee or the AR before me that one more opportunity should be granted to the assessee for furnishing of the evidences in support of the creditworthiness of the transactions. AR failed to specify or file the additional evidence to be furnished before the I.T. authorities if an opportunity is granted. Considering the same I am of the opinion that the decision of the CIT(A) is fair and reasonable. Ld. AR has not made out a case satisfactorily for remanding to the file of the Assessing Officer/CIT(A). The explanation given by the assessee extracted in para 6.2 of the CIT(A) s order (supra) is duly considered while confirming the order of the CIT(A) on this part of the cash deposits amounting to Rs. 9.25 lakhs

Summary

Issues Involved:
1. Validity of reassessment proceedings initiated under Sections 147/148.
2. Addition of Rs. 12,07,500/- to the income of the assessee.

Detailed Analysis:

1. Validity of Reassessment Proceedings:
The assessee contested the initiation of reassessment proceedings under Sections 147/148, arguing that the proceedings were based solely on information regarding cash deposits and lacked tangible material for forming an opinion on income escapement. The Tribunal noted that the assessee did not file a return of income under Section 139(1) and had substantial cash deposits of Rs. 13,57,500/-. The Tribunal found that the absence of a return of income and the significant cash deposits justified the Assessing Officer's belief that there was an escapement of income. Consequently, the Tribunal dismissed the legal grounds challenging the validity of the reassessment proceedings.

2. Addition of Rs. 12,07,500/-:
The assessee challenged the addition of Rs. 12,07,500/- made by the CIT(A), which included the enhancement from the original addition of Rs. 10,07,500/- made by the Assessing Officer. The Tribunal examined the sources of the cash deposits claimed by the assessee, which included agricultural income, personal and family savings, and gifts from relatives.

- Agricultural Income and Personal Savings: The assessee claimed Rs. 2,00,000/- as agricultural income and Rs. 2,50,000/- as personal and family savings. The Assessing Officer accepted only Rs. 1,50,000/- out of the combined claim of Rs. 4,50,000/-. The Tribunal found that the assessee held agricultural land and had cash withdrawals from her account. The Tribunal directed the Assessing Officer to restrict the addition to Rs. 2,00,000/- on this account, accepting the explanation for Rs. 2,50,000/-.

- Gifts from Relatives: The assessee claimed gifts totaling Rs. 9,25,000/- from her husband, father-in-law, mother, and two brothers. The Assessing Officer accepted the gift of Rs. 2,00,000/- from the husband but rejected the rest due to the lack of credible evidence and the explanation being deemed an afterthought. The CIT(A) further enhanced the assessment by Rs. 2,00,000/- by reversing the acceptance of the gift from the husband. The Tribunal upheld the CIT(A)'s decision, noting the lack of adequate evidence and the general nature of the explanations provided by the assessee. The Tribunal found that the assessee failed to discharge the burden of proving the credibility and creditworthiness of the transactions.

The Tribunal concluded that the CIT(A)'s decision was fair and reasonable, and the assessee did not make a satisfactory case for remanding the matter for further evidence. Consequently, the Tribunal partly allowed the appeal by restricting the addition related to agricultural income and personal savings to Rs. 2,00,000/- but upheld the addition related to the gifts.

Conclusion:
The appeal of the assessee was partly allowed, with the Tribunal confirming the validity of the reassessment proceedings and partly allowing the addition related to agricultural income and personal savings while upholding the addition related to the gifts. The final order pronounced on January 2, 2020, resulted in a partial relief for the assessee.