| The Tax Publishers2020 TaxPub(DT) 1716 (Ind-Trib) INCOME TAX ACT, 1961
Section 68
Where Pr. CIT was of the view that the telescoping of unaccounted income to Hundi loans had not been examined properly moreover, no enquiry had been made in respect of receipt of funds from repayment of Hundi loans, there was no independent verification of items due to which amount surrendered was reduced, further, the AO had not examined year wise investment made by the assessee thus the cash deposited in bank was therefore, explained.
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Income from undisclosed sources - Addition under section 68 - Alleged unexplained cash deposits in bank -
A survey operation under section 133A was conducted at the business premise of the assessee on 23-9-2011 and subsequently as per affidavit dated 23-11-2012, the assessee had explained that the unaccounted receipts amounting to Rs. 6,21,25,115 as per LP102 where utilized in making the hundi loans and remaining amount of hundi loans Rs. 10,43,74,885 should be considered as unexplained. According to Pr.CIT amount was not properly verified with cash book and their identity and genuineness of the transaction was not established. The assessee was not asked to produce the parties for verifciation. The sources of cash deposits in the bank accounts were not enquired and hence it remains unexpalined. Mere stating that the hundi loans of Rs. 16.65 crores recovered during the year cannot be conclusive evidence. Held: There was no dispute with regard to the fact that the assessee stated in his statement that he was unable to explain the source of cash loan given through hundis and offered a sum of Rs. 16,65,00,000 as additional income for the assessment year 2012-13. Revenue had no objection for such offer when this amount was treated to be income of the year under appeal, it can safely infer that this amount was available with the assessee for making further investments. Undisputed the basis of unexplained income was recovery of hundis being annexure as LP-06 and LP-07 of survey proceedings. The hundis were having different dates and maturity period. It can be concluded that the maturity amount was available with the assessee for making further investment. It was noteworthy that root of addition was the recovery of hundis. In case it was presumed that all the hundis so made were bogus and reflects imaginary figure as the assessee failed to furnish confirmation from hundi holders, their identity and PAN etc, in such event only amount would be taxable what the assessee deposited in its bank account. When there was a maturity of hundi as well as investment in hundis normal corollary would be that the amount invested was out of the money received from maturity of hundis, unless adverse material was brought on record. In this case the amount surrendered by the assessee was higher than what it was found to be unexplained cash deposits in its bank account. Therefore, there is no infirmity in the order giving set off of the maturity amount of the hundi loans.
Followed:Ananthram Veera Singhaiah & Co. v. CIT (1980) 123 ITR 457 (SC) : 1980 TaxPub(DT) 1055 (SC)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
INCOME TAX ACT, 1961
Section 263
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