2017 (1) TMI 565 - AT - Income Tax

Addition as unexplained cash deposit on various dates in Andhra Bank, Sector-55/56, Noida - Held that - It is an admitted fact that assessee has submitted all documentary evidence in respect of agreement to sale of land, sale deed of property, sale in accordance with agreement and copy of khasra and khatoni in support of agriculture land, details of cash received and copy of relevant bank account which establishes that these are sufficient evidence for source of deposit of ₹ 25,07,770/- in Andhra Bank. Keeping in view of the above, assessee has well explained the deposit of cash with Andhra Bank ₹ 2507700/- out of sale proceed of agriculture land, hence, the addition made and sustained by the Ld. CIT(A) are not justified in the eyes of law. Therefore, the addition in dispute is deleted. - Decided in favour of assessee.

Summary

Issues:
Appeal against assessment order for AY 2009-10 - Addition of unexplained cash deposit - Opportunity of hearing denied.

Analysis:
The appeal was filed against the assessment order for the assessment year 2009-10, challenging the addition of ?25,07,700 as unexplained cash deposit in the Andhra Bank account. The assessee, an agriculturist, initially declared an income of ?1,49,250. However, during scrutiny, the Assessing Officer (AO) added ?25,07,700 under section 68 of the Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) dismissed the appeal. The assessee contended that both lower authorities erred in law and on merits in making the addition without proper opportunity of hearing.

During the hearing, the assessee's counsel argued that the addition of ?25,07,700 as unexplained cash deposit was unjustified based on the documents, explanations, and statements recorded. The Tribunal noted that the Revenue did not appear at the hearing despite notice. Considering the facts and the issue involved, the Tribunal proceeded ex parte against the Revenue.

The Tribunal considered the submissions, records, and relevant evidence. The assessee provided all the information requested by the AO and produced witnesses confirming the sale of agricultural land. The witnesses admitted to the sale and payment made to the assessee's father. Documentary evidence, including agreements, sale deeds, and bank statements, supported the source of the cash deposit in the Andhra Bank. The Tribunal found that the assessee adequately explained the deposit as proceeds from the sale of agricultural land. Consequently, the addition made by the CIT(A) was deemed unjustified in the eyes of the law, leading to the deletion of the disputed addition.

Ultimately, the Tribunal allowed the appeal filed by the assessee, and the addition of ?25,07,700 was deleted. The order was pronounced in the Open Court on 26/12/2016.