The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has upheld addition against the assessee, a non-resident since he was unable to prove the genuineness of the cash gift received under section 69A of the Income Tax Act, 1961.
The assessee, Mr. M Y Jahabar being non-resident was scrutinized u/s 143(3) for the year under consideration for the reason that it made cash deposit of Rs.63.03 Lacs which include deposit of Rs.29.42 Lacs in ICICI Bank and deposits of Rs.33.61 Lacs in Axis Bank. Accordingly, the assessee was required to establish the source of the same.
Though Ld. AO issued letter seeing confirmation of the creditors, however, AO did not ask for source of such advance payments and the purpose of such advances. The reply of the creditors did not mention the date of payment and no details of source of payment were furnished. Similar were the replied received from other creditors. Considering the same, notice u/s 133(6) was again issued to all the creditors which were the address of the assessee only. In the letter, detailed information was asked from the creditors. However, notice issued to two of the creditors returned back unserved and the assessee failed to provide the address of these creditors.
Finally, the Assessing Officer has confirmed the addition holding that theassessee could not substantiate the cash gift of Rs.6 Lacs stated to be received from Shri N. Mohamad Najib.
A bench of Shri Mahavir Singh, Vice President and Shri Manoj Kumar Aggarwal, AM observed that the onus to prove the source of cash deposit was on assessee.
“However, this onus could not be fully discharged by the assessee. So far as the conclusion that the gifts of Rs.6 Lacs and discrepancy in the business advance for Rs.2 Lacs is concerned, we find that no interference would be required in the impugned order since the factual findings remain undisturbed before us,” the Tribunal said.
Rejecting the arguments raised by the assessee, the Tribunal concluded that “the Ld. AR made alternative plea that the assessee sold vehicles during the year and received cash against the same. This is altogether a new plea which we reject since this is nothing but a mere after-thought. This is particularly to be rejected since the assessee is a non-resident. In the additional ground, Ld. AR has submitted that no books of accounts were maintained and therefore the impugned additions are unsustainable. This plea is also to be rejected outrightly since the assessee is under an obligation to explain the credit in the bank accounts whether it is obligated to maintain books of accounts or not. The additional ground stand dismissed.”
The assessee was represented by Shri B. Suresh (CA) and the department was represented by Shri P. Sajit Kumar (JCIT).
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