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Facts
The assessee, a business correspondent, appealed against an order confirming an addition of Rs. 8,97,084/- for AY 2017-18. The addition was made on account of unexplained cash deposits in the assessee's bank account.
Held
The Tribunal held that the assessee failed to discharge the onus of proving the source of the credit entries. The order of the Ld. CIT(A) was found to be in accordance with law and did not warrant any interference.
Key Issues
Whether the addition of Rs. 8,97,084/- made by the AO on account of unexplained cash deposits in the bank account is justified and whether the assessee discharged the onus to prove the source of such deposits.
Sections Cited
69A, 115BBE, 142(1)
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Income Tax Appellate Tribunal, LUCKNOW BENCH “SMC”, LUCKNOW
Before: SHRI ANADEE NATH MISSHRA
Assessment Year: 2017-18 Akhilesh Kumar Singh Income Tax Officer-5(4) v. Hasanpur, Barabanki, Uttar Barabanki, UP-208001. Pradesh-227131. PAN:EBGPS7756N अपीलाथ�/(Appellant) ��यथ�/(Respondent) अपीलाथ� �क और से/Appellant by: None ��यथ� �क और से /Respondent by: Shri Sanjeev Krishna Sharma, Addl. CIT(DR) आदेश / O R D E R PER ANADEE NATH MISSHRA, A.M.: The present appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), dated 08/11/2024 for the assessment year 2017-18. The grounds of appeal of the assessee are as under: -
1. Because on the facts and in the circumstances of the case the order of Ld. CIT(A) is bad in law and deserves to be quashed being illegal.
2. Because on the facts and in the circumstances of the case the order of Ld. CIT(A) is bad in law as_ the Ld. CIT(A) confirmed amounts of all credit entries made by the appellant without considering the replies of the appellant which clearly states that such credit entries were made as the assessee was a Business Correspondent during the AY 2017-18 and corresponding debit entries have been made as well.
3. Because on the facts and in the circumstances of the case the Ld. CIT(A) has confirmed the addition made by the AO receiving confirmation from Sate Bank of India, Haidergarh that the assessee is a Business Correspondent having a valid code.
Page 2 of 6 4. Because without considering the facts and in the peculiar circumstances of the case the Ld. CIT(A), NFAC has confirmed the addition of Rs. 8,97,084/- to the income of the appellant and to be taxed as per provisions u/s 115BBE of the Income Tax Act, 1961 irrespective of the fact that such money is a part of transaction done by the assessee (being Business Correspondent) on behalf of State Bank of India, Haidergarh.
Because on the facts and in the circumstance of the case, the order of Assessment has been passed in absolute violation of the principles of Natural Justice, without providing adequate opportunity of being heard and therefore deserves to be declared a nullity.
The appellant craves for leave to add, modify, amend or delete any other and further grounds of appeal
with permission.”
2. In this case, assessment order dated 13/11/2019 was passed by the Assessing Officer (“AO”) whereby the assessee’s total income was determined at Rs.10,19,140/- as against returned income of Rs.Nil. In the aforesaid assessment order, an addition of Rs.8,97,084/- was made u/s 69A of the Act. Further, an addition of Rs.1,21,428/- was also made towards commission income received by the assessee. Moreover, an addition of Rs.625/- was made on account of interest income from savings bank. The assessee filed appeal against the aforesaid assessment order wherein the aforesaid addition of Rs.8,97,084/- was disputed. Vide impugned appellate order dated 08.11.2024 of the Ld. CIT(A), the aforesaid addition was confirmed by the Ld. CIT(A) and the assessee’s appeal was dismissed. The relevant portion of the impugned order of the Ld. CIT(A) is reproduced as under: - “7.3 I have gone through the grounds of appeal, statement of facts, assessment order and the submissions of the appellant. It is seen from the submissions that the appellant is a Business correspondent to State Bank of India, Pokhara haidergarh, Barabanki. He was doing public cash transaction through current account. His BC code is 5H96000. Remand report of the AO has also been perused. It is submitted in the remand report that the assessee has no proper explanation for the cash deposited. The main reason for selection was cash deposit in bank account. During the course of assessment proceedings, it is submitted that he was working as a business correspondent since 11.2.2011 with the SBI. Being BC, on Page 3 of 6 behalf of the bank, the assessee collected and made payments to the account holders with the help of a mobile instrument and all the transactions are routed through the above mentioned settlement account. 7.3.1 In the appellate proceedings, burden of proof lies on the assessee to prove that facts and findings of the AO are incorrect. If the assessee fails to prove or rebut with cogent evidence against such facts and findings, no interference is required with assessment order. In the instant case, the cash has been deposited in his bank account and he is the owner of the cash deposited and he is having the possession of this cash. The burden of onus is on the assessee to prove the sources for the cash deposits. If it is deposited in the bank account by others money, the appellant needs to reconcile the figures. However, the appellant failed to furnish any information. In this case, the appellant has not availed several opportunities provided during appellate proceedings to submit evidences establishing nexus between the withdrawals made from his account, cash deposited in his account, payments made in support of his claim, which entails conclusion that he had no evidence or say or explanation against the order of the AO. In view of the above discussion, it is held that the AO correctly held that the assessee failed to discharge the onus vested on him. Therefore, the addition of Rs. 8,97,084/- made by the AO is confirmed as the source of which remain unexplained and unsubstantiated. Ground Nos. 2 and 3 raised in this appeal are dismissed.” (2.1) The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 08.11.2024 of the Ld. CIT(A).
(3) The hearing was initially fixed on 06.03.2025. A letter dated 05.03.2025 was filed by Shri Samrat Chandra, FCA, seeking adjournment on the ground that he was recently appointed by the assessee and power of attorney was still awaited. The hearing was adjourned to 15.04.2025 Shri Samrat Chandra, FCA, once again sought for adjournment on the ground that he had been recently appointed by the assessee and power of attorney was still awaited. From the aforesaid, it is obvious that Shri Samrat Chandra, FCA sought adjournments even in the absence of proper authorization from the appellant assessee.
Page 4 of 6 (3.1) When the appeal came up for hearing on 15.04.2025, there was no representation from the assessee’s side. Neither the assessee himself attended in person, nor was any Authorized Representative present on behalf of the appellant assessee. In the absence of any representation from the assessee’s side, the Ld. Departmental Representative for Revenue was heard. He relied on the orders of the Assessing Officer and the Ld. CIT(A). In particular, he drew our attention to the relevant portion of the assessment order which is reproduced below for the ease of reference: - “6. The assessee could only furnish the details and documents with regard to amount of Rs. 42,300/- & Rs. 97,945/- which was credited from JMP Industries, Mohanlal Ganj, Lucknow on account of sale of Dhaan. Details of agricultural land holding has been filed and examined. Further, the assessee submitted the copy of Kisan Credit Account No. 36699995152 of SBI from where the amount of Rs.2,00,000/- was transferred to the savings hank account of the assessee on 18.03.2017. The assessee could not furnish any evidence about the remaining credit entries, a written statement without any credible evidence could not prove the source of the credit entries. The assessee could only furnish the details and supportive documents of Rs. 3,40,245/- (Rs, 42,300 + Rs. 97,945 + Rs. 2,00,000). During the course of recording of statement on 14.10.2019, the assessee in answer to Q. No. 15, stated that if he could not produce the documentary evidence till 05.11.2019, then such amount may be treated as his undisclosed income and added to his total income. The assessee has taken sufficient time to furnish the information but he was not able to furnish the supportive evidence with regard to source of credit entries of Rs. 8,97,084/-(Rs. 12,37,329 ~ Rs. 3,40,245) in the Savings bank account no. 31610038191 with SBI Haidergarh. The assessee has failed to furnish any explanation about the source and nature such credit entries in his bank account. As per provisions of section 69A of the I.T. Act, 1961, “Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.”
In the instant case, the assessee could not submit any documentary evidence with regard to deposit of Rs. 8,97,084/-(cash & other than cash) during F.Y. 2016-17 relevant to A.Y. 2017-18 in his savings bank account no. 31610038191 with SBI Haidergarh. Since assessee has neither filed any ITR originally nor has filed any ITR in response to notice u/s 142(1) of Page 5 of 6 the I.T. Act, 1961 dated 24.01.2018 and during assessment proceedings, no documents have been furnished regarding source of these deposits. Accordingly, the sum of Rs. 8,97,084/-for which assessee could not furnish any supportive details/documents treated as unexplained money in the bank account and tax It at special rates as per provisions of Section 115 BBE of the Income-tax Act 1961.” (3.2) On perusal of the records, it is found that the order of the Ld. CIT(A) is in accordance with law; having regard to the specific facts and circumstances of the present case. The relevant portion of the impugned order of the Ld. CIT(A) has already been reproduced in foregoing paragraph no. 2 of this order, which has also been considered along with assessment order. No material has been brought for consideration to make a case for any interference with the impugned order of the Ld. CIT(A). Therefore, it is held that the impugned order of the Ld. CIT(A) does not warrant any interference, having regard to the specific facts and circumstances of the present case and applicable law. Accordingly, the aforesaid addition of Rs.8,97,084/- is confirmed and the assessee’s appeal is dismissed. All grounds of appeal are treated as disposed of in accordance with the aforesaid directions.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open Court on 17/04/2025.