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2016 (4) TMI 695 - ITAT VISAKHAPATNAM

2016 (4) TMI 695 - ITAT VISAKHAPATNAM - TMI - Additions u/s 69A - Held that:- In the present case on hand, though assessee filed cash flow statement and also affidavit from his wife affirming having income from tuitions and interest, he failed to furnish cogent evidences to prove the genuineness of the transactions. The assessee claimed to have savings from his salary income and agricultural income. His claim that his life time savings was kept in the form of cash and deposited into bank account .....

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y any evidences or evidences are inadequate, then human probability test is one of the important tests laid down by the highest court of India in order to check the genuineness of the transactions. For example, a person whose annual income is ₹ 20,000/- with which he runs his living show claims that he purchased a diamond necklace worth ₹ 2 lakhs and informed the A.O. that he has bought it from out of his savings. Now when we apply the human probability test, we can easily infer that .....

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d confirmed the addition to the extent of ₹ 36,04,000/-. We do not see any error or infirmity in the order passed by the CIT(A). Hence, we inclined to upheld the order of CIT(A) - Decided against assessee - I.T.A.No.241/Vizag/2014, S.P. No.19/Vizag/2015 - Dated:- 25-2-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri G.V.N. Hari, AR For The Respondent : Shri M.K. Sethi, DR ORDER PER G. MANJUNATHA, Accountant Member: This appeal fil .....

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of the Income Tax Act, 1961 (hereinafter called as 'the Act') was issued. During the course of assessment proceedings, from the AIR information, the A.O. noticed that the assessee has maintained a savings bank account at Corporation Bank and made cash deposits amounting to Rs. 40,04,000/-. Therefore, issued a show cause notice and asked to explain the source and nature of credits into the bank account. In response to show cause notice, the assessee has filed a written submission and sta .....

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yment of insurance premium. In support of his claim filed necessary cash flow statements, affidavits and list of gifts received from friends and relatives, so as to explain the availability of sources for cash depoits. The A.O. however after considering the explanations furnished by the assessee rejected the assessee s explanations and made additions of ₹ 40,04,000/- u/s 69A of the Act. The A.O. further held that though assessee claims to have sources for credits in to bank account, he has .....

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d that he was in employment since 1977 and from his employment, he had saving of ₹ 8,21,798/-. Further, during the year under consideration, he had received a sum of ₹ 5,09,000/- from sale proceeds of Sarugudu Thota. The assessee further submitted that he had used his wife savings of Rs. 10,46,675/- for cash deposits into bank account. The assessee further submitted that his wife was a Post Graduate in Public Administration conducting tuition classes for the students. She has earned .....

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filed to substantiate the sources for cash credits. The CIT(A) after considering the explanations filed by the assessee held that the assessee has failed to prove the sources for cash credit with any cogent material evidences. However, after considering the assessee s social status and also the fact that the assessee s son s marriage took place during the financial year under consideration, has accepted a sum of ₹ 3 lakhs out of the total gifts claimed to have received of ₹ 8,21,798 .....

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flow. The CIT(A) ought to have accepted the explanations of the assessee, as each source of income has supporting evidences. The A.R. further submitted that the assessee has filed a detailed cash flow statement for the period from 1998-99 to 2008-09 and arrived at net savings of ₹ 7,88,875/-. It was further stated that the assessee has received a sum of ₹ 5,09,000/- from sale proceeds of Sarugudu Thota. The A.R. further submitted that the assessee s wife is a Post Graduate having reg .....

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f his son s marriage which was used for cash deposits into bank account to make Fixed Deposits in the name of his son. Therefore, the assessee has explained the source to the extent of ₹ 37,06,348/- and remaining amount was unexplained, which was accepted before the A.O. as income from undisclosed sources. The A.O. without assigning any reasons summarily rejected the evidence filed by the assessee and made additions u/s 69A of the Act which is not correct. The Ld. A.R. in support of his ar .....

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the additions made by the assessing officer. The Ld. D.R. on the other hand, strongly supported the order of CIT(A). 5. We have heard both the parties and perused the materials available on record. The A.O. made additions of ₹ 40,04,000/- u/s 69A of the Act, towards cash deposits into bank account. The A.O. was of the opinion that the assessee failed to explain the sources for cash deposits with evidences. It was the contention of the assessee that he has sources for cash deposits and file .....

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lasses and earning income which was pooled and deposited into bank account. He further claims that he had received cash gift of ₹ 8,21,798/- on the occasion of his son s marriage and filed a list of gift received from about 300 guests along with 16 confirmation letters. In all, put together he has explained sources to the extent of ₹ 37,06,348/- and balance amount of ₹ 6,50,000/- was accepted as unexplained investment. The A.O. rejected assessee s explanations and stated that t .....

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rs and confirmation letters from donors who gifted on the occasion of his son s marriage. On perusal of the paper book filed by the assessee, we find that the assessee has deposited periodically substantial amount of cash into his bank account and were utilized to make various FDs and payment of insurance premium. Admittedly, the assessee did not disclose this bank account along with income tax return regularly filed with Department. However, the A.O., from the AIR information, found that the as .....

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al year 1998-99 to financial year 2008-09. On further verification of cash inflow, outflow and surplus, we are of the opinion that the cash flow statement was prepared with a pure guess work which was not supported by any evidences. Further, the assessee has failed to explain how his life time savings was kept in the form of only cash and deposited into bank account during the year under consideration. Further, he claimed to have savings of ₹ 4,50,000/- prior to 1998-99, but failed prove t .....

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was a Post Graduate and she was earning by conducting tuitions. A cash flow statement was filed for 10 years claiming that she had savings of ₹ 10,46,675/-. On perusal of cash flow statement, we noticed that she had received gifts from her father and brother, however failed to furnish any evidences in support of gifts received. We further noticed that she did not explain how the savings was kept in cash all these years and used for deposit into her husband bank account. It was further obs .....

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ny has paid the amount in cheques. The assessee neither furnished bank account nor filed any details to prove that how these two chit amounts were utilized for the purpose of cash deposits into bank account. The assessee claims to have received cash gift of ₹ 8,21,798/- on the occasion of his son s marriage and the same was used for cash deposits into bank account. The assessee further stated that he had deposited gift received into his bank account and made fixed deposit in the name of hi .....

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e decision of Hon ble High Court of Gujarat in the case of Pipush Kumar O. Desai Vs. CIT (supra) and ITAT Delhi Bench decision in the case of Inderjit Singh Sabarwal Vs. ACIT (supra) and argued that when availability of cash was explained by the assessee with the help of cash flow statement, the A.O. was not justified in adding the cash deposits u/s 69A of the Act. The A.R. further argued that the assessee has filed cash flow statement and filed necessary evidences and also affidavit from the pe .....

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ash flow statement and filed adequate evidences in support of the sources claimed in cash flow statement. Similarly, the ITAT Delhi Bench in the case of Inderjeet Singh Sabarwal (supra) held that the assessee has furnished sufficient details with regard to the sources. 10. In the present case on hand, though assessee filed cash flow statement and also affidavit from his wife affirming having income from tuitions and interest, he failed to furnish cogent evidences to prove the genuineness of the .....

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