2018 (2) TMI 872

have the creditworthiness to make the advances. The lack of financial capacity of the parties clearly shows an indication that the sale agreements were only make believe arrangements. Since the assessee failed to furnish the evidence to establish the genuineness of the advance, we do not find any reason to interfere with the order of the CIT(A) and the same is upheld. Ground No.1.1 of the assessee’s appeal on this issue is dismissed. - Unexplained cash deposit by cheque - A.R. stated that these deposits were the business receipts but no evidence was furnished with regard to the source of deposits as well as expenditure incurred in connection with the earning of this money. Therefore it is established that the cheque deposits were from u .....

X X X X X X X

Full Text of the Document

X X X X X X X

Income Tax-1 {CIT(A)}, Visakhapatnam vide ITA No.304/2013-14/ITO W-1(4), Vsp/2016-17 dated 30.9.2016 for the assessment year 2010-11. 2. Ground No.1 is not pressed therefore this ground is dismissed as not pressed. 3. Ground No.1.4 is general in nature, which do not require specific adjudication. 4. Ground No.1.1 is related to the cash deposits in bank account amounting to ₹ 10.00 lakhs. During the assessment proceedings for the assessment year 2010-11, the A.O. found that the assessee had undisclosed bank account in Indian Bank, Maharanipeta, Visakhapatnam with account No.713957051 and made cash deposits in the bank account to the tune of ₹ 10.00 lakhs for which the assessee explained the source as advances received for sale of .....

X X X X X X X

Full Text of the Document

X X X X X X X

the A.O. holding that the alleged sale agreements were only make believe arrangements to explain the source of the impugned cash deposits. For the sake of clarity and convenience we extract the relevant part of the CIT(A) order which reads as under: 5.3 I have considered the submissions and details flied. It is pertinent to note that the assessee was asked to explain the source for the cash deposit to the tune of ₹ 10 lakhs noted in his bank account, which was not disclosed to the Department. The assessee had raised a plea that it represented advance from sale of property. But the inquiry made by the AO clearly reveal that such a claim was not genuine. It is also relevant to note that the alleged parties who have purportedly made the .....

X X X X X X X

Full Text of the Document

X X X X X X X

issued summons the assessee failed to furnish the evidence. The A.O. has also given a finding that the sale agreements do not bear the signatures of the purchasers. The enquiries of the A.O. revealed that the parties who have purportedly made the impugned advances were related parties and they did not have the creditworthiness to make the advances. The lack of financial capacity of the parties clearly shows an indication that the sale agreements were only make believe arrangements. Since the assessee failed to furnish the evidence to establish the genuineness of the advance, we do not find any reason to interfere with the order of the CIT(A) and the same is upheld. Ground No.1.1 of the assessee s appeal on this issue is dismissed. 6. Ground .....

X X X X X X X

Full Text of the Document

X X X X X X X

the AO had given several opportunities to prove the nature of these receipts. But the assessee failed to prove that these receipts were from his business operation. No information whatsoever, was filed in regard to these cheque receipts. Therefore, the AO is justified in assessing the amount of ₹ 19,30,930/- as unexplained income of the assessee. The plea reiterated during the appeal proceedings that they were business receipts was not substantiated and hence rejected. 7. During the appeal hearing before us, the Ld. A.R. stated that these deposits were the business receipts but no evidence was furnished with regard to the source of deposits as well as expenditure incurred in connection with the earning of this money.Therefore it is es .....

X X X X X X X

Full Text of the Document

X X X X X X X

21.3.2013 filed before the AO. It is also pertinent to note that for the relevant year, the assessee's turnover has increased fourfolds and hence, considering the nature of business and other overall facts of the case, I consider that the estimate of the business receipts at 5% is fair and reasonable and the same is upheld. 9. From the order of the CIT(A), it is established that the assessee had agreed for estimation of income @ 5% before the A.O. Both the A.O. and Ld. CIT(A) have estimated the income @ 5% after careful consideration of the net profit of earlier years and considering the fact that the assessee failed to produce the books of accounts. The A.O. has rejected the books of accounts and estimated the income. The Ld. A.R. did .....

X X X X X X X

Full Text of the Document

X X X X X X X