2017 (1) TMI 979 - AT - Income Tax

Unexplained cash deposited in bank account - whether the amount found deposited in the assessee s bank account can be stated to be explained by the sale of agricultural land to M/s Triveni Infrastructure Development Co. by the assessee s father or not? - Held that - No effort has been made by the tax authorities to address the affidavits of the assessee and his father admittedly on record. Specific land was sold by the assessee s father and the cheques issued by M/s Triveni Infrastructure Development Co. were not honoured by the Bank is a consistent unrebutted claim on record. The amount ultimately was handed in cash by M/s Triveni Infrastructure Development Co. is also a consistent claim on record. Copies of bank pass books of its father and son of the assessee in support of the affidavits filed are also stated to be on record. Thus find that on these material documents there is no discussion whatsoever in the orders of the tax authorities. Accordingly, holding the order devoid of discussion on material facts, the impugned order is set aside and the issue is restored back to the file of the AO directing the said authority to pass a speaking order denovo in accordance with law after giving the assessee a reasonable opportunity of being heard. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Transfer of jurisdiction between Assessing Officers, Addition of cash deposit in bank account, Rejection of explanation by CIT(A), Consideration of evidence by tax authorities, Relevant issue for consideration in proceedings.

Transfer of jurisdiction between Assessing Officers:
The appeal involved the transfer of jurisdiction from one Assessing Officer to another. The assessee challenged this transfer and raised objections before the CIT(A). However, the primary focus of the appeal was on the correctness of the order dated 20.11.2015 of CIT(A), Rohtak pertaining to the 2007–08 assessment year.

Addition of cash deposit in bank account:
The case revolved around a cash deposit of ?30 lakhs in the assessee's bank account maintained with a cooperative bank. The Assessing Officer required an explanation for the source of this deposit. The assessee claimed that the amount was received from the sale of agricultural land by the father, but the AO rejected this explanation citing lack of documentary evidence and inconsistencies.

Rejection of explanation by CIT(A):
In the appeal before the CIT(A), the assessee reiterated the explanation regarding the cash deposit. The CIT(A), however, rejected this explanation based on a remand report, stating that the appellant failed to prove the link between the deposit and the amount received by the father. The CIT(A) questioned why the deposit was made in the son's account when the father had his own bank account.

Consideration of evidence by tax authorities:
The ITAT analyzed the submissions made by both parties. The assessee provided various documents, including sale deeds, affidavits, and bank records to support the claim that the cash deposit was from the sale of land. The ITAT noted that the tax authorities did not adequately consider this evidence and failed to address the affidavits on record. The ITAT found that the tax authorities did not discuss crucial material facts in their orders.

Relevant issue for consideration in proceedings:
The ITAT emphasized that the relevant issue was whether the cash deposit could be explained by the sale of land by the father. The ITAT found that the tax authorities did not address the affidavits and supporting documents provided by the assessee. Consequently, the ITAT set aside the impugned order and directed the AO to pass a fresh order after considering all relevant evidence and giving the assessee a reasonable opportunity to be heard.

In conclusion, the ITAT allowed the appeal for statistical purposes, highlighting the need for a comprehensive and lawful consideration of the evidence presented by the assessee in determining the source of the cash deposit in the bank account.