2015 (8) TMI 1550 - AT - Income Tax

Addition u/s 68 - unexplained cash deposits in bank - As per the explanation furnished by him Shri Dalip Singh was an agriculturist not well educated and had come from village for making purchases for marriage of his daughter and the money was deposited in the bank account since the assessee and Shri Dalip Singh both had to make purchases for the marriage of their daughters - HELD THAT - On perusal of the stated evidences and in the back ground of the fact that Shri Dalip Singh himself has confirmed before the Assessing Officer that he has deposited this amount of Rs.3, 55, 000/- in assessee s bank account this explanation cannot be rejected outrightly. These evidences filed by the assessee also prove that Shri Dalip Singh is a man of means and there is also a relation between him and the assessee therefore it cannot be denied that Shri Dalip Singh in fact has given this amount to the assessee. The explanation given by the assessee and Sh. Dalip Singh that the amount was deposited for making purchases for the marriage of daughter may sound weird and can raise suspicion in the mind of Assessing Officer. It can be a trigger point for further investigation by the Assessing Officer. However in its order the Assessing Officer has not been able to bring on record any material or evidence to falsify this explanation and documentary evidences filed by the assessee. Even before me the learned DR has not been able to do the same. The addition has solely been made on the basis of surmises. Suspicion howsoever strong cannot partake the character of the evidence/material as held by the Apex Court in the land mark judgement in case of Umcharan Shaw Bros. vs. CIT 1959 (5) TMI 11 - SUPREME COURT Thus we are not able to come to a conclusion other than that the deposit has in fact been deposited by Shri Dalip Singh. Therefore the addition made by the Assessing Officer is hereby deleted. - Decided in favour of assessee.

Summary

Issues:
- Addition of Rs.3,55,000 made on account of deposit in the bank
- Upholding of the addition by the CIT (Appeals)
- Explanation provided by the appellant regarding the deposit
- Rejection of the explanation by the Assessing Officer
- Deletion of all other additions except Rs.3,55,000 by the CIT (Appeals)
- Arguments presented during the hearing
- Confirmation of deposit by Sh. Dalip Singh
- Evidence presented by the appellant
- Relationship between the appellant and Sh. Dalip Singh
- Rejection of the addition by the ITAT

The case involved an appeal filed by the assessee against the order of the CIT (Appeals) regarding the addition of Rs.3,55,000 made on account of a bank deposit. The appellant explained that the deposit was made by Sh. Dalip Singh for his daughters' marriage. The Assessing Officer rejected this explanation citing various reasons, including the lack of evidence of the relationship between the parties and discrepancies in the bills. The CIT (Appeals) upheld the addition of Rs.3,55,000. During the hearing, the appellant reiterated that the amount was received from Sh. Dalip Singh for the marriage purchases. The ITAT noted that Sh. Dalip Singh confirmed the deposit and owned substantial land. The appellant provided evidence supporting the agricultural income of Sh. Dalip Singh. The ITAT found the explanation plausible and the addition unjustified, emphasizing the lack of concrete evidence against the appellant's claims. The ITAT ruled in favor of the assessee, deleting the addition of Rs.3,55,000.

In the detailed analysis, the Assessing Officer questioned the source of cash deposits totaling Rs.10,59,500, specifically focusing on the Rs.3,55,000 deposit made by Sh. Dalip Singh. The AO raised doubts about the relationship between the appellant and Sh. Dalip Singh, the necessity for Sh. Dalip Singh to shop in Mohali, and the dependency of a landowner on the appellant for shopping. Additionally, discrepancies in statements and lack of evidence regarding Sh. Dalip Singh's income were highlighted. The AO treated the Rs.3,55,000 as unexplained deposits, resulting in a total addition of Rs.10,46,000. The CIT (Appeals) upheld only the Rs.3,55,000 addition, despite deleting other additions. The appellant's arguments emphasized the familial relationship, joint purchases, and the location preference for shopping. The ITAT considered the confirmation of the deposit by Sh. Dalip Singh, his substantial land ownership, and the presented evidence of agricultural income. The ITAT emphasized the lack of concrete evidence contradicting the appellant's explanation, ultimately leading to the deletion of the Rs.3,55,000 addition.