INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Unexplained cash deposits -

AO noticed that assessee had made huge cash deposits in his bank account and asked assessee to furnish the names and addresses of persons from whom funds/cheques were received but no details were submitted. Several opportunities were given but the assessee failed to produce evidences to prove the genuineness of claim of transactions. With regard to cash deposits, assessee stated that they were mere redeposits of cash withdrawals made on various dates. However, AO noticed that cash deposits were made from various places of the country. Hence, AO made an addition under section 68.Held: Assessee explained that mutual advisory income, the assessee deposited a sum into his bank account. However, assessee offered income under section 44AD only to the part extent. Hence balance amount not offered to tax. Regarding sale of garments, assessee had explained that a sum was out of previous withdrawals and sale of garments and pleaded that it was to be excluded from taxation. Assessee had not furnished any evidence to establish nexus between the earlier withdrawals and deposits into various bank accounts. In such circumstances, it could not be accepted that it was from the earlier withdrawals. Therefore, addition made by AO was sustained.

Followed:Girish V. Yalakkishettar Sujatha Buildings Yalakkishettar Colony Dharwad v. ITO, Ward 2 (4) Hubli. ITA Nos. 354/Bang/2019, dated 27-1-2020 : 2020 TaxPub(DT) 634 (Bang-Trib). Relied:Smt. Sarika Jain v. CITy & Anr. (2017) 407 ITR 254 (All-HC) : 2017 TaxPub(DT) 1992 (All-HC). and CIT, Poona v. Bhaichand H. Gandhi (1983) 141 ITR 67 (Bom) : 1983 TaxPub(DT) 582 (Bom-HC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2011-12

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