What did the Tribunal hold?

The Tribunal upheld the addition of Rs. 8 lacs as income from other sources. The assessee failed to substantiate the source of the impugned sum and the lower authorities' actions were justified.

The assessee introduced Rs. 8 lacs into his business as capital but did not record it in his books of accounts. He later offered this amount for taxation voluntarily, stating it was from past savings and used for local purchases.

What were the issues?

Whether the addition of Rs. 8 lacs as unexplained income is justified when the assessee offered it for taxation but failed to substantiate its source.

Shri Ashoke Kumar Ghosh vs ITO | ITAT Kolkata 2019

Income Tax Appellate Tribunal, “SMC” BENCH : KOLKATA

Before: Hon’ble Shri S.S. Godara, JM]

Hearing: 04.03.2019Pronounced: 22.03.2019

For the Appellant : None For the Respondent : Shri C.J. Singh, JCIT, Sr. DR Date of Hearing : 04.03.2019 Date of Pronouncement : 22.03.2019 ORDER

This assessee’s appeal for assessment year 2014-15 is directed against the CIT(A)- 13, Kolkata’s order dated 29.08.2018 passed in case no. 658355221190618/CIT(A)- 13/W-45(3)/Kol/2018-19 involving proceedings u/s 143(3) of the Income Tax Act, 1961 ( in short the ‘Act’). Heard both the parties. Case file perused.

None appears at the assessee’s behest. The registry has already sent an RPAD notice dated 16.11.2018. I therefore proceed to deal the assessee’s case on merits.

The assessee’s sole substantive ground seeks to reverse both the lower authorities’ action adding of Rs. 8 lacs as income from other sources. The CIT(A)’s detailed discussion to this effect reads as under:

Shri Ashoke Kumar Ghosh A.Yr. 2014-15 “Ground No.03 of the appeal relates to the addition of Rs.8,00,000/-. The AO made addition with the following observations:- "in relation to show cause dated 17-10-2016 whereby the assessee was asked to reconcile the difference in the sundry debtor as per balance sheet being Rs.9,56,835/- comprising of (i) Jiban Basu Rs.19,830/- (ii) Shital Enterprises Rs.89,655/- and (iii) Bankura Biri Silpi Co-op Society Ltd Rs.8,47,350/- and Total sundry debtor of Rs.44,76,630/- inclusive of Rs.35,19,795/- being the balance as per ledger of M/s. Laxmi Biri Works maintained in the books of M/s. G S & co the assessee vide reply dated 30-11-2016 stated as under:-

....... I had Rs.8,00,000/- in my hand and this amount I introduced in my business but the t recorded in books of accounts. I hereby voluntarily and suo-moto offer Rs.8,00,000/- for Taxation for FY 2013-14. I used this amount of Rs.8,00,000/- for local purchase from time to time during the FY 2013-14 the corresponding sales of Rs.35,19,79/- was also not reflected in my books of accounts thus the sales of Rs.35,19,795/- is undisclosed sales and I beg to your kindness to applying GP rate on such undisclosed sale. As evident from the submission of the assessee stated verbatim above, the assessee had accumulated find amounting to Rs.8,00,000/- which was introduced as capital but not recorded in the books of accounts."

In this regard the appellant has submitted that the appellant was having cash in hand and he introduced the same into his business out of past savings. As the appellant was running business he always requires fund and he had maintained bank account too. The reason for having cash in hand was not substantiated by the corroborating evidences. Even the utilization of withdrawal for domestic purposes as not been substantiated and how this surplus accumulated has not been substantiated. The linkage of past withdrawals, total withdrawals, -personal expenditure with material facts has not been established therefore the plea of cash deposit from past saving kept in his personal capacity is merely a concocted story of the appellant in order to get away with his tax liability therefore, the plea of the appellant is not accepted therefore the action of the AO is hereby upheld and the ground of appeal is dismissed.

4. I find during the course of hearing that the assessee has not been able to explain source of the impugned sum amounting to Rs. 8 lacs. The fact also remains that the assessee himself offered assessment thereof as per his statement dated 30.11.2016 submitted during the course of scrutiny. There is no rebuttal to this concussion either in Shri Ashoke Kumar Ghosh A.Yr. 2014-15 form no. 35 or in form no. 36 of the case file. I therefore find no merit in the assessee’s sole substantive ground.

This assessee’s appeal is dismissed.

Order pronounced in the Court on 22.03.2019

SHRI ASHOKE KUMAR GHOSH,KOLKATA vs. ITO, WARD - 43(3), KOLKATA

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