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2016 (2) TMI 1092 - AT - Income TaxAddition on account of deposit in Saving Bank account - Held that - CIT(A) without giving any cogent reasons rejected the explanation of the assessee without any justification. CIT(A) rejected the explanation of the assessee because the statement of all the above four persons were unrealistic. This itself is no ground to disbelieve the statement of the purchasers because the AO has not brought any evidence on record against the statement of four purchasers to prove the case of the revenue. It is well settled law that the Income tax authorities shall have to consider the evidence and material on record by applying the test of human probabilities and after considering the surrounding circumstances. See case of Durga Prasad More 1971 (8) TMI 17 - SUPREME Court and Sumati Dayal 1995 (3) TMI 3 - SUPREME Court . Thus we are of the view that the authorities below without any justification have made the addition against the assessee. The explanation of the assessee is acceptable and as such no addition is called for in the matter. We accordingly set aside the orders of the authorities below and delete the addition - Decided in favour of assessee.
Issues Involved:
Challenge against addition of Rs. 17,50,000 on account of deposit in Saving Bank account under section 69 of the IT Act. Analysis: Issue 1: Addition of Rs. 17,50,000 as unexplained cash credit The assessee challenged the addition of Rs. 17,50,000 as unexplained cash credit before the ld. CIT(A). The assessee explained that the amount was received as an advance against the sale of property from four individuals. The AO rejected the explanation, citing that the assessee did not have sole title over the property and that the purchasers were co-owners. However, the assessee provided affidavits, statements, and the title deed of the property to support his claim. The ld. CIT(A) dismissed the appeal, finding the statements of the four individuals unrealistic. Issue 2: Assessee's contentions and supporting evidence The assessee contended that the advance received was against the sale of family properties with the consent of other family members. The purchasers confirmed this in their affidavits and statements recorded by the AO. The assessee withdrew the amount on the same day as the deal did not materialize. The bank statements corroborated the withdrawal. The assessee relied on the judgment in the case of CIT vs. Metachem Industries to argue that once the identity and genuineness of the transaction are established, the burden shifts. The ld. CIT(A) rejected the contentions without sufficient reasons. Issue 3: Tribunal's decision and legal principles applied The Tribunal analyzed the evidence and found that the assessee had proven the identity of the purchasers, their creditworthiness, and the genuineness of the transaction. The Tribunal referred to the judgment in Metachem Industries and emphasized that the burden on the assessee was discharged by proving the transaction's genuineness. The Tribunal criticized the ld. CIT(A) for rejecting the explanation without valid justification. Citing legal precedents, the Tribunal highlighted the importance of considering evidence and applying the test of human probabilities. Ultimately, the Tribunal set aside the lower authorities' orders and deleted the addition of Rs. 17,50,000. Conclusion: The Tribunal allowed the appeal of the assessee, emphasizing that the assessee had successfully proven the genuineness of the transaction and discharged the initial burden of proof. The Tribunal's decision was based on a thorough analysis of the evidence, legal principles, and the unjustified rejection of the assessee's explanation by the lower authorities.
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