2022 (2) TMI 427 - AT - Income Tax

Addition in respect of cash deposited in the bank - Sources of deposit were loans shown taken from two persons - HELD THAT - Once the advancement of loan was confirmed by the lenders and there was nothing adverse to suggest that either the lenders were bogus or the transactions were non-genuine or they did not have any credit worthiness, the explanation so tendered by the assessee deserved to be accepted. We fail to comprehend as to what sort of documentary evidence would be required to demonstrate that the loan was taken by the assessee for his daughter's further studies, when the persons advancing the loans are saying so in their respective confirmations, which have not been controverted. Next source of deposit as claimed as agricultural income assessee furnished Sale receipt of agricultural produce. CIT(A) did not accept the same on the ground that there was no corroborating evidence of agricultural operations and cultivation done. Again, the fact that the assessee was regularly into agricultural operations has not been denied - we are unable to comprehend the point of view canvassed by the ld. first appellate authority in the hue of the fact that the assessee did furnish sale receipt of agricultural produce which has not been found to be non-genuine or bogus and no contrary material has been placed on record by the Revenue. For the remaining source of deposit, the assessee stated that a sum as withdrawn from Dena Bank Agriculture Account of Sheela G. Bende, his spouse, which was an agricultural loan taken from the Government of Maharashtra. She withdrew the amount from her bank account on 15-03-2010. CIT(A) did not accept the amount as a source of deposit on the ground that it was withdrawn and subsequently re-deposited. Even though such amount was re-deposited, it cannot be held that the assessee was not in a position to manage the remaining amount of ₹ 4.89 lakh when he was an agriculturist and also in a service having salary of ₹ 3.94 lakh for the year. Here is a case in which a salaried person pooled his lifelong endeavour for the further studies of his daughter. In such a panorama, a holistic approach needs to be adopted. When we consider the facts of the instant case as a whole, there remains no doubt whatsoever that the assessee arranged the money from his known sources for depositing in the bank account which was meant for education of his daughter. The authorities below were not justified in getting too technical and taking a pedantic approach - we set-aside the impugned order and delete the entire addition. - Decided in favour of assessee.

Summary

Issues:
Confirmation of addition of ?13,05,000 in respect of cash deposited in the bank.

Analysis:
The appeal pertains to the confirmation of an addition of ?13,05,000 in the bank account of the assessee during the assessment year 2011-12. The assessee, a retired salaried employee, deposited ?15.05 lakh in his bank account over four months. The sources of deposit included a loan of ?4.00 lakh for his daughter's foreign studies, agricultural income of ?6.87 lakh, and a withdrawal of ?3,79,000 from his spouse's agricultural loan account. The CIT(A) reduced the addition to ?13,05,000, which led to the appeal before the Tribunal.

The Tribunal noted that the loan for the daughter's studies was confirmed by the lenders, and the assessee provided sale receipts of agricultural produce to support the claimed agricultural income. The CIT(A) disregarded the agricultural income due to lack of corroborating evidence, which the Tribunal found unjustified as the assessee's regular agricultural operations were not disputed. The withdrawal and redeposit of ?3,79,000 from the spouse's account were also contested by the CIT(A), but the Tribunal disagreed, considering the overall circumstances.

The Tribunal emphasized the need to assess each transaction comprehensively. It recognized the assessee's efforts to fund his daughter's education and criticized the technical approach of the lower authorities. The Tribunal concluded that the assessee sourced the funds legitimately for his daughter's education, overturning the addition made by the CIT(A) and allowing the appeal.

In conclusion, the Tribunal set aside the CIT(A)'s order and deleted the entire addition of ?13,05,000, ruling in favor of the assessee. The judgment highlights the importance of a holistic approach in evaluating transactions and the necessity to consider the overall circumstances surrounding the case.