2022 (2) TMI 484 - AT - Income Tax

Unexplained cash deposited in the bank account - addition u/s 68 - HELD THAT - We find that the authorities below have not considered the contention of the assessee that he had received gift from his father who had sold agricultural land. Moreover, the Assessing Officer has not brought any contrary material refuting the claim of the assessee that he received gift from his father who had sold agricultural land in the month of April, 2011 located in Budhera, Gurgaon. Therefore, considering the material available on record and finding of the authorities below hereby direct the Assessing Officer to delete the addition. Thus, grounds raised by the assessee are allowed.

Summary

Issues:
1. Addition of income under section 68 of the Income Tax Act.
2. Confirmation of addition by the Ld. CIT(A).
3. Rejection of explanation by the Ld. CIT(A) and reliance on judicial pronouncements.
4. Addition based on surmises and conjectures.
5. Granting partial relief against additions made by the Assessing Officer.
6. Absence of the assessee during the hearing.

Issue 1: The appeal involved the addition of income under section 68 of the Income Tax Act, concerning cash deposits in the bank account of the appellant. The Assessing Officer made an addition of ?7,59,000, which the appellant contested, claiming the cash was received as a gift from their father who had sold agricultural land. The Ld. CIT(A) partly allowed the appeal, reducing the addition by ?3 lakhs.

Issue 2: The Ld. CIT(A) confirmed the addition of ?4,59,000, despite the appellant's explanation and reliance on judicial pronouncements. The appellant argued that the maximum peak balance credit in their bank account was ?4,18,870, and since explanations were provided, there was no unexplained cash credit remaining. The Ld. CIT(A) partially decided in favor of the appellant, reducing the addition.

Issue 3: The Ld. CIT(A) rejected the appellant's explanation and upheld the addition based on surmises and conjectures, contrary to the evidence on record. However, the authorities did not consider that the appellant had received a gift from their father, which was a crucial aspect of the case.

Issue 4: The Assessing Officer's addition was based on surmises and conjectures, without concrete evidence to refute the appellant's claim of receiving a gift from their father. The Ld. CIT(A) did not address this aspect, leading to an unjustified confirmation of the addition.

Issue 5: The appellant contended that they had already provided detailed explanations and gift affidavits regarding the source of the cash deposits. The Ld. CIT(A) granted partial relief but failed to consider the complete picture, resulting in an erroneous confirmation of the addition.

Issue 6: During the hearing, the appellant was absent, despite the notice being duly served. This absence led to the appeal being heard in the appellant's absence, impacting the presentation of their case.

In conclusion, the judgment highlighted discrepancies in the assessment of cash deposits, with the authorities failing to consider crucial aspects such as the gift received by the appellant. The decision favored the appellant, directing the Assessing Officer to delete the addition, emphasizing the importance of thorough evaluation and consideration of all relevant evidence in such cases.