2023 (5) TMI 1174 - AT - Income Tax

Addition u/s 69A - cash deposit unexplained - HELD THAT - We find force in the contention of assessee that although originally after receipt of cash of Rs. 40 lakh, Rs. 20 lakh each were deposited to the joint bank account of assessee and his wife Shri Dinesh their son but at the time of returning the cash Shri Dinesh was away from home therefore this amount was completed from withdrawals from the joint bank account of assessee and his wife. As assessee has successfully demonstrated with supporting evidence source of cash deposit to his bank account during FY 2010-11 relevant year under consideration and therefore no addition was required to be made in the hands of assessee and therefore we allow the grounds of assessee on merits and direct to delete the entire addition.

Issues involved:
- Delay in filing appeal before the tribunal
- Addition of Rs. 17,50,000/- u/s 69A of the Act
- Enhancement of Rs. 20,00,000/- u/s 69A of the Act
- Reopening of the case by the assessee

Delay in filing appeal before the tribunal:
The appeal was filed against the order of CIT(A) Faridabad dated 21.01.2020 for AY 2011-12. There was a delay of 237 days in filing the appeal before the tribunal. The appellant sought condonation of the delay due to the lockdown caused by the Covid-19 pandemic. The Hon'ble Supreme Court had extended the period of limitation for all judicial proceedings, including condonable ones. The tribunal admitted the appeal for consideration and adjudication within the prescribed extended time limit.

Addition of Rs. 17,50,000/- u/s 69A of the Act:
The assessee explained that the source of cash deposit of Rs. 17,50,000/- was from cash withdrawals from the bank, which was duly supported by bank statements. The CIT(A) erred in confirming this addition, despite the explanations provided. The appellate proceedings revealed that the cash deposit was related to agricultural purposes and had a legitimate source. The tribunal concluded that no addition was required in the hands of the assessee.

Enhancement of Rs. 20,00,000/- u/s 69A of the Act:
The CIT(A) had enhanced the addition by Rs. 20,00,000/- under section 69A of the Act. The assessee demonstrated that this amount was part of a larger transaction involving the sale of land and subsequent repayments. The funds were deposited and withdrawn in accordance with the transaction details, which were supported by evidence. The tribunal accepted the explanation provided by the assessee and directed the deletion of the entire addition.

Reopening of the case by the assessee:
The case of the assessee was reopened under section 148 of the Act, where a cash deposit of Rs. 17,50,000/- was treated as unexplained income u/s 69A. The assessee's submissions highlighted that the amount in question had already been scrutinized in the wife's assessment, who had a joint bank account with the assessee. The tribunal found merit in the explanations provided by the assessee and directed the deletion of the entire addition.

Conclusion:
The tribunal allowed the appeal partly, based on the merits of the explanations provided by the assessee regarding the cash deposits and withdrawals. The imposition of penalty was deemed consequential and did not survive due to the conclusions reached on the substantive grounds.

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