9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (9) TMI 1202 - AT - Income TaxAddition on account for cash deposits in Bank account - deposits from a close friend of assessee's father who is no longer alive - only evidence which the assessee could rely upon was the Affidavit of the sole surviving child of deceased - HELD THAT - Tax authorities have made the addition and sustained the addition on the grounds that the consistent submission that Shri Jarnail Singh verbally asked the assessee to invest is a fact supported only by the assessee and not corroborated by Shri Jarnail Singh. The fact that Shri Jarnail Singh who had been suffering from liver cancer etc. was no longer alive, stands ignored. The sole surviving child does not plead ignorance on facts and infact corroborates the assessee's version by an affidavit dated 21.08.2015. The said Affidavit is not even attempted to be upset by the Revenue. For reasons best known to the tax authorities, it has been left unaddressed. Onus placed upon by the assessee to explain the deposits in his bank account stands satisfactorily discharged. The orders of the AO ignoring the evidences on whims cannot be upheld. The insistence of the tax authorities without upsetting the evidences available on record cannot be accepted. In the facts of the present case without any effort on the part of the Revenue to assail the contents of the affidavits, prayer for remand back to the AO has no meaning. Accepting the explanation of the assessee the addition for the reasons set out hereinabove in detail is directed to be deleted. - Decided in favour of assessee.
Issues Involved:
1. Validity of the addition of ?43,70,000/- on account of unexplained cash deposits in the assessee's bank account. Detailed Analysis: Issue 1: Validity of the Addition of ?43,70,000/- on Account of Unexplained Cash Deposits Background and Arguments: The primary issue contested in this appeal was the addition of ?43,70,000/- made by the Assessing Officer (AO) on account of unexplained cash deposits in the assessee's bank account. The assessee argued that the source of these deposits was a close family friend, Shri Jarnail Singh, who had provided the funds for investment purposes. The assessee claimed that Shri Jarnail Singh had withdrawn ?75,00,000/- from his bank account after receiving compensation for acquired agricultural land and had given ?43,70,000/- to the assessee for investment in the share market and ?31,00,000/- for a life insurance policy. Evidence and Findings: 1. Source of Funds: - The assessee provided evidence of Shri Jarnail Singh's bank account showing a withdrawal of ?75,00,000/- on 12.10.2009. - The ?31,00,000/- used for the life insurance policy in Shri Jarnail Singh’s name was accepted by the AO, confirming the close relationship and trust between the parties. 2. Investment and Loss: - The assessee invested ?43,70,000/- in his India Bulls Securities account, which resulted in a significant loss. - The AO and CIT(A) questioned why the investment was not made in Shri Jarnail Singh's name and doubted the genuineness of the transaction due to the lack of documentary evidence directly linking the funds to Shri Jarnail Singh. 3. Affidavit and Supporting Evidence: - The assessee submitted an affidavit from Shri Jarnail Singh’s daughter, Ms. Tejinder Kaur, confirming the funds were given to the assessee for investment purposes. - The affidavit stated that the funds were given due to the close family relationship and the trust placed in the assessee by Shri Jarnail Singh. - The tax authorities did not attempt to rebut or examine the contents of the affidavit, which was dated before the issuance of the notice by the AO. Tribunal’s Decision: The tribunal found that the assessee had satisfactorily explained the source of the cash deposits. The following points were crucial in the decision: - Close Family Relationship: The close family relationship between the assessee’s father and Shri Jarnail Singh was well established and not disputed by the Revenue. - Availability of Funds: The source of funds with Shri Jarnail Singh was clear and undisputed, as evidenced by the withdrawal from his bank account following the compensation for acquired land. - Affidavit: The affidavit from Ms. Tejinder Kaur was a significant piece of evidence supporting the assessee’s claim. The Revenue failed to challenge or disprove the affidavit’s contents. - Good Faith Actions: The assessee’s actions, including the investment in the insurance policy and the share market, were consistent with the instructions from Shri Jarnail Singh, demonstrating good faith and trust. The tribunal concluded that the addition of ?43,70,000/- was based on mere suspicions and not on concrete evidence. Therefore, the addition was directed to be deleted, and the appeal of the assessee was allowed. Order Pronouncement: The order was pronounced in the Open Court on 26th September 2019, allowing the appeal of the assessee and directing the deletion of the addition of ?43,70,000/-.
|
