Sh. Varun Gupta, Delhi Vs ITO, New Delhi Details

This case involves an appeal by Varun Gupta against an Income Tax Officer's order concerning unexplained cash deposits. Mr. Gupta declared a modest income, but the tax authorities noted significant cash deposits totalling £5,700,240 into his bank accounts, which were not declared. Despite requests, Mr. Gupta failed to provide satisfactory explanations or documentation for the source of these funds, leading the Assessing Officer to add the entire amount to his taxable income under Section 68 of the Income Tax Act.

INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “A”: NEW DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
(Through Video Conferencing)

ITA No. 5889/Del/2015
(Assessment Year: 2011-12)

Varun Gupta, C52, Shakti Nagar Extension, Delhi PAN: ALWPG5914G
(Appellant)

Vs.

ITO,Ward47(4),Room No. 406, 4th Floor, Block-D, Pratyakash Kar Bhawan, Civic Centre, JL Nehru Marg, New Delhi
(Respondent)

Revenue by : Shri K. Sampath, Adv
Shri V. Raj Kumar, Adv
Assessee by: Shri R. K. Gupta, Sr. DR
Date of Hearing : 20/10/2020
Date of pronouncement : /10/2020

O R D E R

PER PRASHANT MAHARISHI, A. M.

1. This is an appeal filed by the assessee against the order of the Id CIT(A)-21, New Delhi dated 12.08.2015 for the Assessment Year 2011-12 wherein the appeal filed by the assessee against the order passed u/s 143 (3) of the act by the income tax officer Ward 47 (4), New Delhi dated 20 March 2014 was dismissed.

2. The revenue raised the following grounds of appeal:

“1. The action of the learned CIT(A) in upholding the addition levied by A.O of Rs. 57,00,240/- u/s 68 is unjust, illegal, arbitrary, illusory and the disallowance may kindly be quashed.

2. That the action of the CIT(A) in giving a finding that the assessee has failed to discharge is onus with regard to cash credit and thus upholding the addition of Rs. 57,00,420/- is unjust, illegal, arbitrary, illusory and deserves to be deleted.

3. That his action in not considering submissions of the assessee that section 68 is not applicable to him at all and upholding the addition is unjust, illegal, arbitrary, illusory and deserves to be deleted.”

3. Brief facts of the case shows that assessee is an individual; he filed his return of income electronically on 26/7/2011 declaring an income of ? 156,841/- by filing form number ITR- 2 which is applicable to individuals and Hindu undivided family not having income from business or profession. The case of the assessee was selected for scrutiny by issue of notice u/s 143 (2) on 3/8/2012. The subject matter of the issue in appeal is that in the income tax return the assessee has only shown source of income as income from salary and income from other sources. The assessee has declared salary from HCL info system Ltd of? 16,259 and salary from another concern of? 172, 049/-. The assessee has also shown the income from other sources in the form of bank interest. As per information available according to the annual information return on ITD system the assessee has deposited a sum of ? 4,605,380/- in his savings bank account maintained with ICICI bank. As the assessee is not engaged in any business activity during the year under consideration in order to examine the AIR information available in this case with respect to the cash deposited, the assessee was asked to furnish the details of all the bank accounts along with the bank statements. He was also required to explain the source of cash deposited in the bank account during the year with supporting documents. Before the assessing officer assessee submitted that he has only three accounts with state bank of India (number 305204363338), ICICI bank (account number 002901526244) and HDFC bank account number (13921930002539). However according to the AIR information assessee was also having an ICICI bank having account number 033101507741 which has not been declared by the assessee wherein the assessee has deposited cash of ? 4,605,380/-. The information was not forthcoming from the assessee except the request of adjournment or non-compliance. The learned assessing officer sought information from the bank with respect to the cash deposited u/s 133 (6) of the Act. The HDFC bank with respect to one account stated that assessee has deposited cash of ? 390,000/- and with respect to the two different bank accounts with ICICI bank it was found that assessee has deposited cash of Rs. 705,395 and ? 4,605,380/- respectively. Therefore the assessee has deposited total cash of ? 5,700,240/-. The learned assessing officer noted that assessee has deposited unexplained cash amounting to ? 5,700,240/-. It is also seen by him that most of the cash has been deposited from outside Delhi. Therefore he noted that it is the duty of the assessee to show the identity of the creditors, capacity of those creditors to advance money and the genuineness of the transactions which assessee has failed. He noted that the assessee has failed to discharge is onus to prove the above and to offer any explanation with regard to cash credits. Therefore he made an addition of ? 5,700,240/- to the total income of the assessee u/s 68 of the income tax act. He also found that assessee has earned bank interest of ? 93 96 out of which the assessee has shown interest income of only ? 3414/- and therefore he made the balance addition of Rs. 5982/-. Accordingly the total income of the assessee was assessed at Rs. 5,863,063/- against the returned income of ? 156,841 by passing an order u/s 143 (3) of the act on 20 March 2014.

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