Addition based on claim of payment of cash in civil suit sustained as source of cash payment not explained

Steecon Infrastructure Vs ITO (ITAT Mumbai)

ITAT Mumbai held that addition towards unexplained and undisclosed income sustained as assessee itself claim payment of cash in the civil suit and failed to explain the source of the cash payment.

Facts- The assessee is a registered partnership firm. No regular return of income for the year under consideration was filed by the assessee. AO received an information from the Investigation Wing that assessee in the civil suit has claimed to have paid an amount of ₹ 1,44,00,000/- in cash which was paid to shri Gulab Singh Bhandari, as an advance for purchase of a property in addition to the payment of ₹ 3,56,00,000/-made through cheques.

AO assessed total income at ₹ 1,44,00,000/-. CIT(A) upheld the action of AO. Being aggrieved, present appeal is filed by the assessee.

Conclusion- Held that the assessee itself has made claim of payment of cash of ₹ 1,44,00,000/-and therefore it is for the assessee to explain the source of the same and in absence of which, the Assessing Officer has correctly held it to be unexplained and undisclosed income in the hands of the assessee. We do not find any error in the order of the Ld. CIT(A) in upholding the same.

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