9911796707
TMI Blog2020 (4) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner has failed to note that additions can be made only on the basis of entries in the Books of Accounts and the appellant being a salaried employee is not required to maintain any books and thus no books were maintained by him and therefore it follows that no entries could have been made by the appellant in his nonexistent books and this being the case, the assessing officer ought to have known that mere deposits in the Bank Account do not fall within the four corners of the Section 68 of the Act. 3. The Learned Commissioner ought to have known that in terms of Section 68, only sums credit to the books of accounts maintained in the previous year is covered in the said section and this being the case, deposits in the bank account is not covered under this section and hence cannot be added to income. 4. The Learned Commissioner ought to have known that Pass Book of the appellant is not "books of account" maintained by the appellant and hence invocation of Section 68 is wrong and ought to have set aside the original order, but has instead chosen to confirm the same thereby making his order otiose and hence the same ought to be set aside in limine. 5. The Learned Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers sent by the AO were either received back with remarks that 'no such person was available at the given address' or no replies were received by AO from these alleged buyers confirming purchase of gold jewellery from assessee , which led AO to make additions for various cash deposits in the bank to the tune of Rs. 9,49,200/- to the income of the assessee in the hands of the assessee, which remains unexplained while rest of cash deposit out of total cash deposits of Rs. 32,52,142/- in SB a/c with ICICI Bank was accepted by the AO, vide assessment order dated 25.03.2014 passed by AO u/s 143(3) of the 1961 Act. 4. Aggrieved by an assessment framed by AO u/s 143(3) of the 1961 Act, the assessee filed first appeal with Ld.CIT(A), who asked AO to verify genuineness of claim of assessee to have deposited cash in his bank account out of sale of jewellery . The learned CIT(A) was pleased to call for remand report from the AO. The AO made enquiries, however, satisfactory explanation could not be obtained and the assessee itself had admitted before AO that Rs. 2,66,000/- out of total additions of Rs. 9,49,200/- be treated as unexplained income of the assessee. The Ld.CIT(A) upheld additions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with respect to alleged transaction in jewellery. Further, in the last paragraph of the remand report, in page no.6, AO has also categorically stated that the appellant even failed to give the " address of Mrs. Pramola and Mr. G. Ruben for the amount of Rs. 1,50,000/. Further, AO has also stated that Shri S. Balasubramanian and Shri Guru Shankar have denied giving any cash to the appellant towards purchase of jewellery. ii) A copy of the remand report dated 11/09/2017 was provided to the appellant, seeking his response. In response, on 27/10/2017, the appellant filed a written submission, the relevant portion of which is reproduced hereunder:- "...3. The assessee accepts for the following additions suggested in the remand report: Sl.No. Particulars Amount Remarks 1 Deposit on 15/12/2010 17000 In para 1 2 Balasubramanian 49500 In para 3 Sl.No.5 3 Gurushankar 49500 In para 3 Sl.No.6 4 Pramola and G. Ruben 150000 In para 2 The assessee out of Rs. 9,49,200/- has no objection for additions mentioned above amounting to Rs. 2,66,000/-." As can be seen from the above written submission, the appellant himself has accepted the addition of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant was not able to establish sale of jewellery to these persons was at a rate higher than the market rate. Under normal circumstances, if anyone wishes to sell jewellery, it would be sold to a dealer or shop who is dealing in gold jewellery. Moreover, AO has rightly pointed out the discrepancy with respect to the amounts as well as weight of jewellery in respect of certain parties and certain parties have also categorically denied transaction. Wherever parties have denied the transaction, appellant, himself has accepted the same as undisclosed income of the appellant. However, wherever there are certain discrepancy and source of cash payments was not explained by the concerned persons, the appellant has not accepted the same as undisclosed income. ix) The appellant himself has accepted undisclosed income of Rs. 2,66,000/- after lot of efforts by the Department both during the assessment proceedings as well as during remand proceedings. It is only when the appellant was cornered with contradictions ascertained out of the enquiries made, the appellant had admitted the said income of Rs. 2,66,000/-. x)The appellant has never ever filed wealth tax return and also does not h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mention here that the return of income filed is duly verified and even prosecution proceedings could be initiated for wrong verification of Income-tax return. Therefore, this also goes to establish that the appellant has not earned any capital gain/capital loss on account of sale of jewellery. xiii) As stated by the AO in the supplementary remand report, the appellant has not discharged primary onus cast upon him u/s 68 of the Act as the source of cash paid by the alleged purchasers have not been established. xiv) As the primary onus cast upon the appellant of establishing the source of cash allegedly received is not established, it is held that the AO has rightly treated these receipts as unexplained cash credit. 7.3.4 In view of the above discussion and also after considering all the facts and circumstances of the case under consideration and the principles of preponderance of probabilities, it is held that the alleged transaction in jewellery is a sham transaction which is also partly accepted by the appellant to the extent of Rs. 2,66,000/-. In view of these facts, it is held that the AO has rightly added Rs. 9,49,200/- as unexplained cash credit. Therefore, this groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his bank account during assessment proceedings, which led AO to make additions to the income of the assessee which were later confirmed by learned CIT(A). The enquiries were made by AO in assessment proceedings as well as in the remand proceedings conducted by the AO as directed by learned CIT(A), wherein most of the parties denied to have transacted to have purchased jewellery from assessee or satisfactory explanation was not forthcoming from these alleged buyers . Some of the parties could not be located. The assessee itself admitted that Rs. 2,66,000/- out of total additions made of Rs. 9,49,200/- be added to his income as unexplained cash deposit in his bank account. It is pertinent to mention that assessee had not declared any capital gain earned on sale of jewellery in return of income filed with Revenue. We have also observed that assessee has not filed any Wealth Tax Return with the Department nor any evidence is filed as to declaration of the said jewellery in return of income r filed with Revenue for this year or for earlier assessment years and the said gold jewellery of 382.93 grams were never disclosed by assessee to the Department. The assessee also could not pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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