2017 (6) TMI 1373 - AT - Income Tax

Unexplained cash deposits in bank account - assessee submitted that the cash deposits is made out of the sale proceeds of a property sold by his wife - HELD THAT - The purchase made by the assessee s wife in year 2008 for Rs.2 lakhs has been sold in the year 2011 for a sum of Rs.3,35,700/-. There is no material on record nor any evidence produced by the assessee before the Tribunal to show that the assessee s wife had received a sum of Rs. 31 lakhs on the sale of property vide sale deed No.201/2011 (sale deed dt 20-1-2011). In the absence of any material produced by the assessee, I have no other option but to confirm the addition of Rs.30 lakhs made by the Assessing Officer. Assessing Officer has not given credit of Rs.3,35,700/- disclosed in sale deed against the cash deposits of Rs. 30 lakhs. As long as the Department does not have a case that the sale proceeds of the assessee s wife has not been deposited in any other Bank account, I am of the view that the sum of Rs.3,35,700/- disclosed in the sale deed of the assessee s wife should be given due credit against the cash deposits of Rs.30 lakhs in assessee s ICICI Bank account. Therefore, the assessee gets the benefit of Rs.3,35,700/- and balance of Rs. 26,64,300/- (Rs.30,00,000 Rs.3,35,700 Rs.26,64,300) is sustained as income of the assessee from the undisclosed sourceC- Appeal filed by the assessee is partly allowed.

Summary

Issues:
1. Delay in filing the appeal
2. Justification of the CIT(A) in confirming the assessment order with an addition of Rs.30 lakhs to the returned income

Issue 1: Delay in filing the appeal
The appeal was filed with a delay of thirty days, and the assessee submitted a petition for condoning the delay. The Judicial Member, after hearing the arguments, found sufficient reason for the delay and attributed it to genuine causes. Consequently, the delay was condoned, and the case was proceeded with on its merits.

Issue 2: Justification of the CIT(A) in confirming the assessment order
The primary issue was whether the CIT(A) was justified in upholding the assessment order that included an addition of Rs.30 lakhs to the returned income. The assessee had explained that the cash deposits were proceeds from a property sale by his wife. However, the Assessing Officer rejected the explanation, emphasizing the lack of evidence linking the cash credit to the property sale. The CIT(A) also dismissed the appeal, stating that the source of the cash deposit was not adequately proven. The Tribunal noted that while the sale deed mentioned a consideration of Rs.3,35,700, there was no evidence to support the claim of Rs.31 lakhs being received. The Tribunal confirmed the addition of Rs.30 lakhs but acknowledged the Rs.3,35,700 disclosed in the sale deed. Thus, the assessee was given credit for Rs.3,35,700, and the balance of Rs.26,64,300 was upheld as income from an undisclosed source.

In conclusion, the Tribunal partially allowed the appeal by providing credit for the disclosed amount in the sale deed and sustaining the remaining balance as income from an undisclosed source.