2024 (5) TMI 1357 - AT - Income Tax

Unexplained cash deposits - Onus to prove the source - Revenue contended that assessee has failed to explain as to why he has deposited money into bank account and why Ravi Bansal has not given by cheque and therefore, when the other money received by the cheque - HELD THAT - Considering the evidences placed on record in the form 1/3 parties evidence and registered copy of power of attorney we are of the view that the assessee is not the real owner of cash deposit in the bank account. CIT(a) has merely not considered the plea of the assessee on account of the fact that in the said Mukhtiyar nama the amount transferred or agreed by between the parties have not been mentioned and merely on these correct reason the explanation of the assessee are rejected. The contention of the CIT(A) has not correct when the assessee from the third party evidence proves that the money received in his bank account through RTGS and through deposit of cash has been given to Shir Vivik Oberoi and Shri Inder Pal Singh for which the power of attorney has been placed on record. Thus looking into bank all facts present by the assessee, we are of the considered view that the Revenue may taken necessary action against Ravi Bansal if deem it fit in accordance with law but in the case of the assessee ultimately income i.e. to be chargeable to tax is only the brokerage income and the AO. Considering the rate of brokerage privilege in the market the excess income of the assessee considering that the finding of the fact that ground of the assessee are allowed.

Summary

Issues Involved:
1. Reopening of assessment under Section 148 of the Income-tax Act, 1961.
2. Addition of Rs. 27,00,000/- on account of cash deposits in the assessee's bank account.
3. Attribution of cash deposits to a third party (Shri Ravi Bansal).

Issue-wise Detailed Analysis:

1. Reopening of Assessment under Section 148:
The assessee contended that the Assessing Officer (AO) grossly erred in reopening the assessment under Section 148 of the Income-tax Act, 1961. The case was reopened based on AIR information indicating that the assessee had deposited Rs. 27,00,000/- in his bank account during the assessment year 2013-14 without filing any return of income. The Tribunal noted that the reopening was justified as the AO had valid reasons to believe that income had escaped assessment.

2. Addition of Rs. 27,00,000/- on Account of Cash Deposits:
The AO added Rs. 27,00,000/- to the assessee's income, considering the cash deposits as unexplained. The assessee argued that the cash belonged to his friend, Shri Ravi Bansal, who had deposited the money without his knowledge. The CIT(A) confirmed the addition, stating that the assessee failed to provide any conclusive evidence, such as a letter or confirmation from Shri Ravi Bansal, to support his claim. The Tribunal observed that the assessee had provided a registered Power of Attorney and bank statements showing transactions related to the deposits. However, the CIT(A) dismissed these documents, citing that the "Mukhtiyar Nama" did not mention the amount transferred.

3. Attribution of Cash Deposits to Shri Ravi Bansal:
The assessee claimed that the cash deposits were made by Shri Ravi Bansal, who also deposited Rs. 20,00,000/- via cheque in the same bank account. The Tribunal noted that the AO accepted the cheque deposits but not the cash deposits. The Tribunal found that the assessee had discharged his primary onus by providing plausible explanations and third-party evidence, including a registered Power of Attorney and bank statements. The Tribunal held that the burden shifted to the Revenue to disprove the assessee's claims. It concluded that the assessee was not the real owner of the cash deposits and that the Revenue could take necessary action against Shri Ravi Bansal if deemed fit.

Conclusion:
The Tribunal allowed the appeal partly, concluding that the assessee's income should only include brokerage income, not the entire Rs. 27,00,000/- cash deposit. Ground No. 1 regarding the reopening of assessment was dismissed as not pressed by the assessee. The order was pronounced in the open Court on 10/01/2024.