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Income Tax Appellate Tribunal, KOLKATA BENCH “A”, KOLKATA
Before: SH. P.M.JAGTAP & SH. A.T.VARKEY
PER P.M.JAGTAP, ACCOUNTANT MEMBER
1. This appeal filed by the assessee is directed against the order of Ld. CIT(A)- 18, Kolkata dated 21.03.2016 and the issue involved therein relates to the additions of Rs.3,06,150/- and Rs.18,11,765/- made by the AO and confirmed by the Ld.CIT(A) on account of deposits found to be made in the bank accounts of the assessee with HDFC and Kotak Mahindra Bank by treating the same as unexplained.
The assessee in the present case is an individual. The return of income for the year under consideration was filed by him on 15.09.2010 declaring a total income of Rs.52,00,251/-. During the course of assessment proceedings, bank accounts of the assessee with different banks were verified by the AO and on such verification, he found that the assessee had made deposits by way of cash and cheques in his bank accounts maintained with HDFC Bank and Kotak Mahindra Bank aggregating to Rs.4,36,150/- and Rs.18,11,765/- respectively. When the assessee was called upon by the AO to explain the source of the said deposits, the [Assessment Year: 2010-11] following details were furnished by the assessee in respect of deposits found to be made in his bank account with HDFC Bank:- date Amount Remarks by assessee 24.04.2009 Rs.10500/ Received from rubi biswas to pay air Ticket purchased for her via HSBC card. Paid on 30.04.2010 06.05.2009 Rs.10600/ Received from rubi biswas to pay air ticket purchased for her via HSBC card. Paid on 11.05.2010 15.05.2009 Rs.56500/ Sale of old jewelry to Satyajit Ghosh 29.07.2009 Rs.13000/ Received from Srijoni in cash paid to ASP on 12.08.2009 for advertisement in Iarnshedpur published on 07.08.2009 19.08.2009 Rs.11550/ Received from rubi biswas to pay Puri booking tickets trough HSBC card. Paid HSBC on 25.08.2009 11550/ 19.10.2009 Rs.5000/ Redeposited of cash withdrawal on 15.10.2009 27.10.2009 Rs.40000/ Received from Ruby Biswas. Paid to MCCS on 04.11.2009 30,000/ 30.11.2009 Rs.10000/ Redeposited of cash withdrawal on 28.11.2009 03.12.2009 Rs.17500/ Sale of old jewelry to Deepak Mukherjee 17.12.2009 Rs.5000/ Received from mamoni for donation to CRY on 30.12.2009 5001/ 02.02.2010 Rs.49000/ Received from arpita chatterjee for payment of credit card bill of arpita online on 29.01.2010 02.02.2010 Rs.49000/ Sale of old jewelry to Sanjay Shaw 05.03.2010 Rs.50000/ Sale of Santro Car. 05.03.2010 Rs.50000/ Sale of Santro Car. 08.03.2010 Rs.30000/ Sale of Santro Car. [Assessment Year: 2010-11] 02.03.2010 Rs.28500/ Sale of old Jewelry to Satyajit Ghosh. Total Rs.4,36,150/ 3. The AO examined the details furnished by the assessee and on such examination, he did not accept the explanation of the assessee in respect of cash deposits found to be made in HDFC Bank account to the extent of Rs.3,06,150/- as under:-
Rs. 1,51,500/ on account of cash receipt on sale of old jewellery.
2. Rs. 15,000/ being redeposit of cash after withdrawal from the bank.
Rs. 49,000/ was claimed to have been received from his wife, Ms Arpita Chatterjee for payment of credit card bill.
4. Rs. 72,650/ was claimed to have been received from Smt. Ruby Biswas, motherinlaw, for payment of air ticket and hotel booking.
Rs. 18,000/ was claimed to have been received Ms. Srijoni for donation to CRY and for advertisement to ABP.
As regards the deposits found to be made in his bank account with Kotak Mahindra Bank aggregating to Rs.18,11,765/-, it was explained by the assessee that a sum of Rs.2 Lacs was received by him on account of consultancy charges.
The AO however did not accept the same in the absence of relevant details and documentary evidence furnished by the assessee. As regards the remaining amount of deposits, it was explained by the assessee that the same represented sale proceeds of the business of his wife Mrs. Arpita Chatterjee. The AO however found that no income from the said transactions claimed to be that of the business of his wife was offered by Mrs. Arpita Chatterjee in the return of income. He also noted that there was no evidence produced by the assessee to establish that any business activity was actually carried on by his wife. He also found certain deficiencies and discrepancies in some of the bills produced by the assessee to establish the business activities carried on by his wife. Accordingly, the entire deposits of Rs.18,11,765/- found to be made in the bank account of the assessee [Assessment Year: 2010-11] with Kotak Mahindra Bank were treated by the AO as unexplained and addition to that extent was made by him to the total income of the assessee in the assessment completed u/s 143(3) by an order dated 13.03.2013.
5. Against the order passed by the AO u/s 143(3), an appeal was preferred by the assessee before Ld.CIT(A) and since the submissions made by the assessee while challenging the additions of Rs.4,35,150/- and 18,11,765/- were not found acceptable by him, Ld.CIT(A) proceeded to confirm both these additions made by the AO for the following reasons given in his impugned order:-
“I have carefully considered the facts of the case and the submissions of the assessee. As will be evident in the succeeding paras the above mentioned cash deposits are not the only cash deposits in the bank account of the assessee. In fact there are other cash deposits of Rs.18,11,765/ in Kotak Mahindra Bank which are being dealt in the succeeding paras.
As regards sale of mother's old jewellery is concerned, assessee has submitted some confirmations from the purchasers who happen to be his friends. A.O. has mentioned his reasons as to why he is not accepting assessee's contention in this regard. I also have serious reservations on the explanation offered by the assessee. As can be seen assessee is a high networth individual earning net income of about Rs. 50,00,000/ annually. Sale of personal belongings and household items are done in a distressed situation. As assessee himself is a high networth individual and his wife is also doing some business, it does not appeal to reasons that assessee would sell jewellery worth Rs. 1,51.500/ to raise money for medical treatment of his father. Further the purchasers have clearly mentioned that payment was made in cash on the request of the assessee. It appears that assessee is just trying to find an excuse for undisclosed cash in hands. The explanation given are afterthought to cover up the deposit of cash in the bank account. Hence assessee's contention regarding sale of old jewellery is not acceptable.
Similarly assessee's claim regarding redeposit of Rs. 5000/ and Rs.10,000/ respectively on 19.10.2009 and 13.11.2009 appears to be afterthought. Hence assessee's explanation is not acceptable.
[Assessment Year: 2010-11]
Assessee has claimed to have received Rs. 49,000/ from his wife for payment of credit card bill. However the explanation does not seen genuine because his wife was doing independent business and had her own bank account. Hence there was no need for the payment of credit card through her husband. The explanation given by the assessee appears to be afterthought for justifying deposit of Rs. 49,000/ in cash. Besides assessee has also not given details of credit card bills. Hence assessee's explanation is not acceptable.
Assessee has claimed to have received Rs. 72,650/ from his motherin law for payment of air ticket and hotel booking. A.O. has already pointed out several flaws in this argument. Smt Ruby Biswas was doing her independent business and was having her own bank account. Besides A.O. has also pointed out that alleged payment was made by Smt. Ruby Biswas almost one year after the actual journey performed. Under the circumstances, the explanation of the assessee appears to be afterthought and hence not acceptable.
Similarly for the amount of Rs. 18,000/ received from Ms Srijoni for donation to CRY and for advertisement, appear to be afterthought. First of all, it is not explained as to what was to need for making payment on behalf of another person and then taking cash. Secondly, when the other person was herself doing some business, there was no reason to make payment through the assessee. Hence assessee's explanation are not acceptable.
In view of the facts mentioned above, it appears that assessee's explanation regarding deposit of Rs. 3,06,150/ is not genuine and it is only an afterthought to justify these cash deposits in his bank account. Hence assessee's contentions are rejected and addition of Rs. 3,06,150/ is confirmed.
3.2 Grounds of Appeal No.2
In the Kotak Mahindra Bank A/c. cash deposit of Rs. 18,11,765/ was made. Assessee had explained these deposits from 2(two) sources. Rs. 2,00,000/ was claimed to have been received as consultancy fee and the balance was claimed to have been received as sale proceeds from wife's business. In the appeal proceedings, AI R has submitted that assessee's wife Smt. Arpita Chatterjee is the joint holder of this account and all the cash deposits are claimed to be from Sari business of Ms Arpita Chatterjee. It is [Assessment Year: 2010-11] further submitted that G. P. addition @ 8% may be made. I have carefully considered the facts of the case and the submissions of the assessee. During assessment proceedings assessee had initially claimed that Rs. 2,00,000/ was received in cash as consultancy charges. However A.O. has pointed out several loopholes in this story. In the appeal proceedings, assessee has not stuck to this explanation. As regards sale proceeds of sari business is concerned, A.O. has already pointed out that these. deposits are not part of turnover of Ms Arpita Chatterjee's business as shown in her return. Assessee has failed to give any explanation as to why this amount was not shown in her return if this money was genuine business receipt. Under the circumstances, assessee's contentions cannot be accepted. Addition of Rs. 18,11,765/ is confirmed.”
Aggrieved by the order of ld.CIT(A), the assessee has preferred this appeal before the Tribunal.
We have heard the arguments of both sides and perused the relevant material available on record. As regards the deposits of Rs.3,06,150/- found to be made in the bank account of the assessee with HDFC Bank, Ld. Counsel for the assessee has reiterated before us the same submissions made before the authorities below while explaining the source of the said deposits. It is however observed that the explanation so offered on behalf of the assessee was duly considered by the AO as well as by ld.CIT(A) and the same was not accepted by them for the cogent and convincing reasons given in the respective orders. For example, the claim of the assessee on account of cash received on sale of old jewellery amounting to Rs.1,51,500/- was not accepted by the authorities below as it was found difficult to accept the claim of the assessee having substantial income that the jewellery belonging to his mother was sold for medical treatment of his father. Moreover, the persons stated to have purchased the said jewellery were all the friends of the assessee and the payment was stated to be made by them in cash on the request of the assessee. Even the claim of the assessee of having re- deposited cash of Rs.15,000/- from the withdrawals was not accepted in the [Assessment Year: 2010-11] absence of any nexus between the withdrawals and the deposits established by the assessee and the same was rightly rejected as an afterthought. Even the amount of Rs.72,650/- claimed to be received by the assessee from his mother-in-law for payment of the air ticket and hotel booking was found to be unacceptable due to several flaws pointed out by the AO. As mentioned by Ld. CIT(A) in his impugned order, the mother-in-law of the assessee was doing her independent business and was having her own bank account and the alleged payment was made by her to the assessee almost one year after the journey performed. On the same ground, the claim of the assessee of having received a sum of Rs.49,000/- from his wife for payment of credit cards expenses was not found acceptable by the authorities below. Keeping in view these cogent and convincing reasons given by the authorities below, we are of the view that the source of deposits found to be made in his bank account with HDFC Bank as explained by the assessee to the extent of Rs.3,06,150/- was rightly rejected by the authorities below. In that view of the matter, we find no justifiable reason to interfere with the impugned order of Ld. CIT(A) confirming the addition made by the AO on this issue and dismiss Ground No.2 of the assessee’s appeal.
As regards the deposits found to be made in the bank account of the assessee with Kotak Mahindra Bank aggregating to Rs.18,11,765/-, Ld. Counsel for the assessee has reiterated before us the submissions made before the authorities below that the said deposits re-presented sale proceeds of the business of his wife. He has contended that the amount of the said deposits thus cannot be entirely added as income and only the profit element involved in the sale proceeds can be treated as income. He has invited our attention to the copy of the relevant bank statement placed at page 24 to 27 of the Paper Book and pointed out that some of the cheques issued from the said bank account held jointly by the assessee and his wife were issued towards purchases. It is however observed that there is no evidence whatsoever brought on record before us in the form of relevant [Assessment Year: 2010-11] purchase bills, confirmations of the parties etc. to support and substantiate the contention of the Ld. Counsel for the assessee that the said cheques were issued against purchases of the business of the assessee’s wife. Moreover, such cheques claimed to be issued against purchases are very few and the debits appearing in the said bank account appear to be towards personal expenses such as credit cards expenses, club expenses, telephone expenses, schools fee etc. It is also noted that payments are frequently made from the said accounts to one party namely Media Content & Communication Services (India) Pvt. Ltd. for which no explanation whatsoever is offered on behalf of the assessee. Keeping in view all these facts of this case, we find no infirmity in the impugned order of Ld.CIT(A) confirming the addition of Rs.18,11,765/- made by the AO by treating the deposits found to be made in the bank account of the assessee with Kotak Mahindra Bank as unexplained and upholding the same, we dismiss Ground Nos.3 & 4 of the assessee’s appeal.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 01.08.2018.