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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
This appeal is filed by assessee against the order passed by The Commissioner Of Income Tax (Appeals) – 54, Mumbai dated 15/7/2016 for assessment year 2011 – 12 wherein the appeal filed by the assessee against the order passed by The Assistant Commissioner Of Income Tax Central Circle – 39, Mumbai (Learned Assessing Officer) u/s 143 (3) of the Income Tax Act [The ACT] was dismissed.
The assessee has raised following grounds of appeal:-
i. on the facts and in the circumstances of the case and in law the learned CIT (A) erred in holding that the assessing officer was justified ii. on the facts and in the circumstances of the case and in law the learned CIT – A order in confirming the addition of ₹ 28,515,800/– in respect of the alleged unexplained cash credits appearing in the bank accounts opened in the name of the appellant without appreciating that the appellant had fully discharge the onus cast upon him iii. on the facts and in the circumstances of the case and in law the learned CIT – A order in upholding the action of the assessing Officer ignoring withdrawals made from the relevant bank accounts Under consideration iv. on the facts and in the circumstances of the case and in law the learned CIT – A order in holding that the assessing officer was justified in treating the cash deposit of ₹ 28,515,800/– appearing in the bank accounts opened in the name of the appellant as unexplained cash credit bringing the same to the tax in the hands of the appellant ignoring that none of the cases cited by the AO hold good in appellant’s case v. on the facts and in the circumstances of the case and in law the learned CIT – A erred in upholding the action of the assessing officer ignoring antecedents of the appellant
Brief facts of the case shows that the assessee is an individual. He filed his return of income on 1/11/2011 declaring a total income of ₹ 164,710/–. AIR information is available regarding cash deposit to the tune of ₹ 4,524,500/– and deposit in cash in current account maintained with the Indusind bank. Therefore the learned assessing officer issued notice u/s 133 (6) to the banks and bank accounts were obtained. The AO found that in axis bank account number 2432 assessee has deposited cash of ₹ 4,524,500/– in Indusind bank account number 28 – CD4144050 cash deposit of ₹ 1,020,000/– and in another bank account with the same bank with the number 48 – CD4144050 of ₹ 2,29,71,300/–. Thus, the total cash deposit of ₹ 28,550,800/– was deposited and assessee was asked to explain the source of the cash deposit.
Assessee submitted that he was employed with Alliance Intermediaries Networks Private Limited and these bank accounts were utilized by the director of the said company, and the transactions were taken place without his knowledge. He further stated that he was paying a
The learned assessing officer after considering the explanation of the assessee held that assessee has failed to satisfactorily explain the credits appearing in his bank accounts and therefore invoked the provisions of Section 68 of the income tax act and made the addition of the entire amount of ₹ 28,515,800 in the hands of the assessee. The assessment order was passed u/s 143 (3) of the income tax act by determining total income of the assessee at Rs 2,86,80,510/–.
Aggrieved, assessee preferred an appeal before the learned CIT – A, who dismissed the appeal of the assessee. Therefore, assessee is in appeal before us.
Assessee has filed an application for admission of additional grounds of appeal as Under:-
Additional grounds of appeal i. The learned assessing officer and CIT (A) has erred in law and on facts by considering all the cash deposits as income. The assessee has earned only 0.15% income on bank deposits after deducting the transfer to sister concerns ii. the learned assessing officer and CIT (A) has erred in law and on facts by not allowing 50% expenses against the income earned 0.15% of bank deposits iv. the assessee was asked to provide the names of the beneficiaries which were already procured by the Department from the bank in form number 26AS and on the basis the income is assessed of the beneficiaries and the assessee does not possess the names of the beneficiaries and in this line of business it is not possible to collect the names of the beneficiaries
The learned authorized representative at the time of hearing submitted a paper containing 42 pages wherein he has relied upon the several judgments of the coordinate benches as well as of the honourable Bombay High Court. He submitted that the assessee is engaged in the business of providing accommodation entries and therefore assessee should be assessed at the nominal income of 0.15% of the banking turnover after deducting transfer entries to the sister concern and against this income the 50% of expenses should be allowed.
The learned departmental representative vehemently submitted that assessee has failed to give any source of income or even the name of the beneficiaries with respect to the cash deposited in the bank accounts and therefore the learned assessing officer has correctly treated it as income of the assessee u/s 68 of the income tax act. He
We have carefully considered the rival contention and perused the orders of the lower authorities. According to the assessing officer the assessee is engaged in the business of trader in financial instruments as mentioned at serial number 10 of the caption of the income tax assessment order. Otherwise, we do not find what nature of activities the assessee has carried on. Assessee has filed return of income declaring an income of ₹ 164,710/–. There are deposits in cash in three different bank accounts of the assessee amounting in all to ₹ 28,515,800/– for which the assessee failed to give any explanation before the assessing officer. He merely stated that he is working with one company, this bank account was utilized by the director of the said company, and the transactions have taken place without his knowledge. He further stated that his employer was being a small commission for signing certain documents as and when required by him. He did not name the person who was operating those bank accounts and what amount of commission was paid to him. The assessee could not show any further evidences with respect to who withdrew the cash from these bank accounts as well as who deposited cash in those bank accounts. When the matter reached before the learned CIT – A, it was held that assessee has not denied that the above referred three bank accounts belong to him and has also not disputed that the amount of cash deposited in those bank accounts. With respect to the credit in those
In view of our above on finding wherein we have upheld the taxation of the whole sum credited in the bank account of the assessee in cash without explaining the source, the issue of estimation of any commission income, unless the assessee identifies the beneficiary with respect to each transaction, as well as deduction of grant of any expenditure, does not arise. In view of this, the additional grounds raised by the assessee do not merit any consideration.
In the result, appeal filed by the assessee is dismissed.
Order pronounced in the open court on 06.07.2022.