Addition u/s 68 upheld as cash was deposited in bank by the loan creditor immediately before transfer and was poor being not an income tax assessee
ABCAUS Case Law Citation:
ABCAUS 3148 (2019) (09) HC
Important case law relied upon by the parties:
Commissioner of Income Tax versus Deen Dayal Choudhary (2017) 148 DTR Judgments.
In the instant case, an appeal has been filed under Section 260-A of the Income Tax Act, 1961 (‘Act’) against the order of Income Tax Appellate Tribunal (‘Tribunal’) upholding the action of the authorities in invoking Section 68 of the Act and thereby making addition to the income of the assessee.
The case of the assessee was that his employee (loan creditor) had advanced a sum of Rs. 5,40,000/- by way of cheque which was duly returned with interest within the same year. However, the authorities below noticed that the said employee stated his monthly income to be Rs. 14,000/- to 15,000/- only.
Further, the said employee had opened a bank account, deposited cash of Rs. 3.00 lakhs and the same was immediately transmitted to the appellant. Thereafter, again a sum of Rs. 40,000/- was introduced in the account and the same was also immediately handed over to the assessee. Yet again, third time there was another infusion of Rs. 2.00 lakhs by cash which was also handed over to the assessee.
The loan creditor had no bank account before this and the authorities below ultimately came to the conclusion that his creditworthiness was not proved.
Before the Hon’ble High Court, appellant argued that once the loan creditor had appeared and given his own affidavit and the money was paid to the assessee-appellant by cheque by banking transaction and was returned through banking transaction, the authorities below erred in deciding against the appellant.
The Hon’ble High Court opined that there was no merit in the appeal. It was observed that the Tribunal had noticed that it was very strange that the appellant would keep his entire savings in cash. The Court further found it strange that if the appellant decided to change his method of saving and put his money in the bank, why he did not put the entire savings in the bank in the first go and why he retained the balance amount with him in cash?
The Hon’ble High Court further noted that the said employee was admittedly not an income tax assessee, thereby strengthening the view that not only he was not a rich but he is barely able to make the ends meet.
The appeal was dismissed accordingly.
addition u/s 68 ca misconduct cash deposit in bank cbdt circular CBDT Instruction cbdt notification cbdt order cbdt press release cgst circular cgst notification cit revision 263 concealment penalty covid-19 custom circular demonetisation due date extension e-way bill faq GST circular GST Council Meeting gst faq gstn advisory gstr-1 GSTR-3B GST rates IBBI ibc icai announcement itat mca circular MCA notification order u/s 119 penalty 271(1)(c) penalty u/s 271(1)(c) Press Release reasons recorded reopening 148 Reopening us 147 Search & Seizure sebi circular sebi regulations transfer and postings unexplained cash credits validity of notice u/s 148 Withdrawal of 2000 500 Bank Notes
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