The case number ITA 706/DEL/2019 involves the appellant, Balan Raja from New Delhi, and the respondent, ITO, Ward-52(2), New Delhi. This case pertains to the assessment year 2008-09 and was filed on January 31, 2019. The order type is a Final Tribunal Order, with the date of the order and the date it was pronounced being February 7, 2020.
This appeal is filed by the assessee, Balan Raja, against the Order dated December 4, 2018, passed by the Ld. Commissioner of Income Tax(A)-18, New Delhi, relating to the assessment year 2008-09. The primary issue in this appeal revolves around the additions made under Section 68 of the Income Tax Act, 1961, concerning an outstanding loan amount and unexplained cash deposits.
The assessee raised the following grounds of appeal:
The appeal came up for hearing on July 8, 2019, after issuing a notice. Upon a written request by the assessee, the case was adjourned to October 22, 2019. On October 22, 2019, the assessee’s counsel sought more time to file papers, and the hearing was rescheduled for February 6, 2020. On this date, neither the assessee attended nor filed any adjournment application. Therefore, the appeal was decided ex-parte, based on the merits of the case and the submissions by the Ld. DR.
The Ld. CIT(A) upheld the additions made by the AO under Section 68 of the Income Tax Act. The brief facts of the case are as follows:
The AO issued a notice under Section 148 of the Act on October 30, 2014, based on information that the appellant had given a cash loan of Rs. 6 lakhs to one Mr. Vijay Kumar. In response, the appellant filed the ITR on January 15, 2016, showing a total income of Rs. 1,18,630/-. During the course of assessment proceedings, the appellant furnished a cash flow chart showing that he had received a loan from his employer, Mr. A.B. Singh, and other persons. The AO analyzed the cash flow statement and held that a sum of Rs. 2,56,000/- remained unexplained and added the same under Section 68 of the Act.
The AR submitted that Rs. 1,06,000/- was the balance available from the loan taken from the employer and Rs. 1,50,000/- was available as a cash balance. However, no supporting documents were furnished to prove the genuineness of these available balances. The Ld. CIT(A) concluded that in the absence of any evidence, the AO was justified in treating the amount of Rs. 2,56,000/- as unexplained and making the addition under Section 68 of the Act.
After hearing the Ld. DR and reviewing the orders passed by the revenue authorities, the Tribunal did not find any infirmity in the impugned order. Consequently, the appeal filed by the assessee was dismissed. However, in the interest of justice, the Tribunal granted the assessee the liberty to approach the Bench under Rule 24 of the Income Tax Appellate Tribunal Rules, 1963, to satisfy the Bench for non-appearance, and that application will be decided on merits in accordance with the law.
In summary, the Tribunal’s decision in Balan Raja vs ITO underscores the importance of providing adequate evidence to support claims of loans and cash balances. The appeal was dismissed, reinforcing the necessity of clear and convincing documentation to substantiate such claims.
This case serves as a significant reference for taxpayers and tax professionals dealing with similar issues, highlighting the necessity of maintaining clear documentation and understanding the nuances of tax provisions related to unexplained income and loans.
Balan Raja vs ITO: Appeal Dismissed on Loan and Unexplained Income for AY 2008-09
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