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TMI Blog2017 (1) TMI 1733X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed as income from other sources. There was, likewise, another cash introduction of Rs. 62.75 lacs in the assessees' capital account in the said firm, and which was for the same reason assessed as business income. A comparison of the sales figure as per the 'Profit & Loss A/c' of the business (Rs. 343.10 lacs) and that per the sales-tax return (Rs. 380.68 lacs), revealed difference of Rs. 37.57 lacs. Though explained to be on account of excise duty, included in the monthly sales turnover, credited in the books of account to a separate account, the same was not substantiated, so that the same came to be added as income. In appeal, the ld. CIT(A) was of the view that the cash introduced in the partnership firm as well as in the bank accounts is to be taken together. Also, the cash withdrawals shall form a source for cash deposits, i.e., subsequent to the withdrawals. Accordingly, it is the peak amount available in all the accounts together that should be considered and brought to tax. He also agreed with the assessee in that certain credits (in the firm) are by way of 'journal entries', in favour of specified persons, amounting to Rs. 21.93 lacs (listed at para 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial discretion to allow the production of the additional evidence in the following circumstances: i if the tribunal requires any documents to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause; or ii. if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them, or not specified by them. The tribunal's power to admit additional evidence is limited. On the existence of either of the circumstances mentioned above, the tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced. The rule does not thus enable an assessee or the Department to tender fresh evidence to support its case, much less to make out a new case. The Hon'ble High Court in Velji Deoraj & Co. (supra) clarified that the admission of additional evidence is made to depend not on the relevancy or materiality but upon the fact whether or not the appellate court requires the evidence to enable it to pronounce the order or f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alysis 3.2 We may next examine the facts of the case, in the backdrop of which the evidence being prayed for admission is to be considered. Clearly, the assessee has not furnished any explanation with regard to the nature and source of the cash deposits in his two bank accounts as well as that introduced in business. The assessees' case was selected for assessment under the verification procedure by the issue of notice under section 143(2) on 01/8/2012. A detailed questionnaire was issued on 27/6/2013. The hearing was conducted at, beginning 7/8/2013, on different dates extending up to 17/1/2014, with the assessee personally attending on 25/11/2013. All this while no reference to any proposed sale or sale agreement was made by the assessee. Vide letter dated 11/2/2014, i.e., after the close of the hearing, the assessee for the first time submitted that he had received 'some advance money' for the sale of property. Then, again, no material to substantiate the claim, or details, were furnished. Before the first appellate authority as well, in whose office the assessee was personally present on 14/3/2014, the assessee raised the claim sans any details, much less material, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or waived the same, i.e., the legal status of the said agreements. This becomes particularly relevant considering that the agreements have admittedly not been carried out. Did the assessee disclose the fact of advance received in any of the returns filed for the subsequent years? This is as the amount received is liable to be under section 51 reduced from the cost of acquisition of the capital asset/s under reference. Again, is it a case of forfeiture? This is as the same, coupled with non-transfer of the capital asset under reference, would render the amount liable to be considered as income u/s. 2(24)(xvii) r/w 56(2)(ix), i.e., for the year of forfeiture. Finally, we observe that, even considering the said agreements at face value, without any supporting material or explanation, the assessee has admittedly no explanation for the source of the balance amount of Rs. 68.90 lacs, i.e., Rs. 118.90 lacs minus Rs. 50 lacs, addition in respect of which shall in any case obtain. That is, there is in fact a tacit admission on the part of the assessee to be having no explanation (as to the nature and source of funds) for nearly Rs. 70 lacs, admittedly found with him during the relevant yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order). And an 'explanation' (before the ld. CIT(A)) for an unspecified amount - which is subsequently sought to be supported by Agreements for Rs. 70 lacs, claiming to have received a substantial part (Rs. 50 lacs) thereof, i.e., even where regarded as a part of the assessee's case. Who is a party/s to which the property/s is agreed to be sold; at what terms; how is the consideration received/to be received; when did the sale/transfer takes place; and where not, what is a course of action adopted by either party for specific performance, etc., are all questions that began answer. Why, even the amount's remains unspecified? The bald statement before the first appellate authority can hardly be considered as an explanation. The provisions of section 69/69A stand rightly invoked by the Revenue. The only question that survives is the quantum of the addition. We find the basis of a peak amount, as adopted by the ld. CIT(A), as reasonable. In fact, we find that the Assessing Officer (AO) has himself allowed the assessee credit for Rs. 1 lac (out of Rs. 2.35 lacs withdrawn) against deposits in the SBI account, as well as for Rs. 0.10 lac withdrawn from PNB a/c, so that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rieved by it's admission, claimed to be in violation of Rule 46A (supra). The said reconciliation appears at page 3 of the impugned order, as under: 5. We have heard the parties, and perused the material on record. The AO clearly records that though a claim to that effect was made, no proper reconciliation was filed. The Revenue's grievance as to non-observance of r. 46A is maintainable, with the assessee being obliged to furnish not only the reconciliation, but, where so required, the sales and the excise returns, substantiating his claims. In fact, the first thing that strikes one is that it is not so much the furnishing of the sales reconciliation that explains the assessee's case as is the deposit of the excise duty, which is, as claimed, the principal difference between the sales as per the books and the sales-tax return. The reason is simple. Even if the differential amount represents, as stated, excise duty (or sales-tax) on the sales for the year, credited to a separate account, it yet forms part of the assessee's turnover in view of section 145A of the Act. It is only by virtue of it's payment that deduction in its respect obtains, i.e., u/s. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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