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2024 (8) TMI 1011 - AT - Income TaxAddition u/s 68 - unexplained cash deposited in bank account - assessee trying to explain the cash deposited in April 2014 for a sale made in May 2014 sold - HELD THAT - AO has not mentioned anywhere in the assessment order regarding to the Bank account number and the joint holders of the abovesaid bank account. The assessee had submitted the reply and facts along with the nature and source of the cash deposit, during the assessment proceedings and even before the CIT(A), but the facts apparent from record are not considered by lower authorities. The spouse of the assessee has sold the house property in the year 2014-2015. The property was sold for consideration of Rs. 40 Lacs out of which the cash of Rs. 4 Lacs was received by the spouse of assessee, before the execution of the Sale deed in the beginning of month of April 2014. The amount of Rs. 4 Lacs received in cash was deposited by wife in the abovementioned Joint Bank account situated at SBI Bhilwara so the source of the said money cannot be added in the hands of the assessee. As regards the saving by the wife of the assessee wherein the assessee submitted that she is earning leady filing the return of income the money so deposited in the bank account belong to her the wife cannot be added in the hands of the assessee. Since, the information that the cash deposited is related to his wife, these explanations of the assessee who is also self employed and having saving of Rs. 3,59,000/- cannot be denied in the wife of the assessee. Therefore, there is no basis to make the addition in the hands of the assessee. As regards the sale of household items there is no finding in the order of the ld. CIT(A) as to why the said amount being small in nature cannot be considered as not taxable in the hands of the assessee. In the light of these facts and considering the explanation of the assessee is Rs. 21,000/- cannot be denied the benefit also the assessee. In the light of the facts and circumstances of the case, the discussion herein above the appeal of the assessee is allowed.
Issues Involved:
1. Whether the Commissioner of Income Tax (Appeals) erred in upholding the assessment order passed by the Assessing Officer (AO). 2. Whether the AO erred in making an addition of Rs. 7,80,000 as unexplained cash credit. 3. Whether the AO failed to consider the joint nature of the bank account and the sources of cash deposits provided by the assessee. 4. Whether the AO denied the opportunity of hearing before making the addition. 5. Whether the assessee's explanations for the cash deposits were substantiated and should be accepted. Detailed Analysis: Issue 1: Error in Upholding the Assessment Order The assessee contended that the Commissioner of Income Tax (Appeals) [CIT(A)] erred in upholding the assessment order passed by the AO, which included an addition of Rs. 7,80,000 as unexplained cash credit. The CIT(A) had confirmed the addition of Rs. 7,80,000 while deleting Rs. 1,70,000 based on the sale of a car. Issue 2: Addition of Rs. 7,80,000 as Unexplained Cash Credit The AO made an addition of Rs. 7,80,000 under Section 68 of the Income Tax Act, 1961, treating it as unexplained cash credit. The CIT(A) upheld this addition, stating that the assessee failed to provide satisfactory documentary evidence to substantiate the source of the cash deposits. The assessee argued that the cash deposits were sourced from the sale of property by his wife, Rashmi Joshie, and her old accumulated savings, which were deposited in their joint bank account. Issue 3: Joint Nature of the Bank Account and Sources of Cash Deposits The assessee highlighted that the bank account in question was jointly held with his wife, Rashmi Joshie. The cash deposits included Rs. 4,00,000 from the sale of property, Rs. 1,70,000 from the sale of a car, Rs. 21,000 from the sale of household items, and Rs. 3,59,000 from his wife's accumulated savings. The AO did not consider the joint nature of the account or the sources of the deposits, which were explained during the assessment proceedings and before the CIT(A). Issue 4: Denial of Opportunity of Hearing The assessee argued that the AO did not provide an opportunity for a hearing before making the addition. The written submissions and explanations provided by the assessee were not adequately considered. Issue 5: Substantiation of Explanations for Cash Deposits The Tribunal noted that the assessee is a salaried employee who regularly files income tax returns. His wife, Rashmi Joshie, sold a property and received Rs. 40,00,000, out of which Rs. 4,00,000 was in cash and deposited in their joint account. The Tribunal found that the explanations provided by the assessee regarding the sources of the cash deposits were plausible and should be accepted. The Tribunal also noted that the AO did not specifically address the joint nature of the bank account or the detailed sources of the deposits. Conclusion: The Tribunal allowed the appeal of the assessee, concluding that the explanations for the cash deposits were reasonable and substantiated. The addition of Rs. 7,80,000 as unexplained cash credit was deleted, and the appeal was decided in favor of the assessee. Order: The appeal of the assessee is allowed. The order was pronounced in the open court on 02/02/2024.
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