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2023 (4) TMI 458 - AT - Income TaxUnexplained deposits in bank accounts - income from undisclosed source - assessee submitted that the transactions of sale of jewellery by his father and handing over the same to the assessee by his father - HELD THAT - As considering the documents submitted by assessee coupled with affidavits filed before the ld. CIT(A), the Bench is of the view that documentary evidences as to the source of the funds of the father and contentions of the assessee deserves to be accepted. It is also noteworthy to mention that the documents in the shape of affidavit presented before the Bench were not rebutted by the Revenue Authorities and the affidavits earlier placed on record before the ld. CIT(A) were also not rebutted or contradicted by the Department. Taking into consideration the above facts, circumstances of the case and the affidavits mentioned hereinabove as well as the decision of M/s. Mehta Parikh Co. 1956 (5) TMI 4 - SUPREME COURT the Bench does not concur with the findings of the ld. CIT(A) on the issue in question. Hence, the appeal of the assessee is allowed.
Issues Involved:
1. Legitimacy of the Rs. 10,00,000 deposit as unexplained income. 2. Delay in filing the appeal and its condonation. 3. Evaluation of evidence provided by the assessee regarding the source of funds. Issue-wise Detailed Analysis: 1. Legitimacy of the Rs. 10,00,000 Deposit as Unexplained Income: The primary issue was whether the Rs. 10,00,000 deposited in the assessee's bank account was from an undisclosed source or a legitimate one. The assessee claimed the amount was received from his father, derived from the sale of agricultural produce, his mother's jewelry, and past savings. The AO and CIT(A) dismissed this claim due to the lack of concrete evidence such as sale bills or documentary proof. The CIT(A) noted that the assessee failed to provide a breakup of the sources or any capital gains return from the sale of jewelry. Additionally, the CIT(A) questioned the plausibility of the father's actions, such as keeping the jewelry and cash at home instead of distributing it among family members or depositing it in his own bank account. The CIT(A) concluded that the amount belonged to the assessee and upheld the addition made by the AO. 2. Delay in Filing the Appeal and Its Condonation: The appeal was delayed by 25 days, attributed to the assessee's panic attack and depression. The assessee submitted a medical certificate and affidavit to support this claim. Although the DR objected to the condonation, the Bench, referencing the Supreme Court decision in Collector, Land Acquisition vs. MSt. Katiji and Others, found sufficient cause for the delay and condoned it. 3. Evaluation of Evidence Provided by the Assessee Regarding the Source of Funds: The assessee reiterated that the Rs. 10,00,000 was received from his father, supported by affidavits from the assessee and two witnesses. The affidavits affirmed the sale of jewelry and agricultural produce. The Bench noted that these affidavits were not mentioned in the CIT(A)'s order and were not rebutted by the Revenue Authorities. The Bench found that the AO did not present any contradictory material or other sources of income for the assessee. The Supreme Court's decision in M/s. Mehta Parikh & Co. vs. CIT supported the validity of affidavits as legal evidence unless contradicted by contrary material. The Bench concluded that the documentary evidence and affidavits provided by the assessee were sufficient to explain the source of funds, and thus, the addition made by the AO was not justified. Conclusion: The appeal was allowed, with the Bench disagreeing with the CIT(A)'s findings and accepting the assessee's explanation for the source of the Rs. 10,00,000 deposit. The decision emphasized the importance of affidavits as valid evidence in the absence of contradictory material. The order was pronounced in the open court on 15/02/2023.
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