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2012 (10) TMI 153 - AT - Income TaxUnexplained money u/s. 69A - amount deposited in the bank account - CIT(A) deleted the addition - Held that - As applying the test as decided in CIT Vs Shri Durga Prasad More (2004 (3) TMI 59 - PUNJAB AND HARYANA HIGH COURT) that the Courts and Tribunals have to judge the evidences before them by applying the test of human probabilities after considering the surrounding circumstances to the facts and circumstances of the case, it is clearly established that the assessee has failed to explain the source of cash deposited by her in her bank account with Bank of Rajasthan Ltd. at Dehradun. It may also be noted that power of attorney holder has no better title than the title held by the owner of the property. The Attorney acts on behalf of the owner. Since no possession was given to the Attorney in this case, therefore, the findings of the CIT(A) for transfer of property is wholly irrelevant and are not sustainable in law. The showing of capital gains, in AY 2004-05 has, thus, no relevance for deciding the matter in issue. The ld. CIT(A) on wholly irrelevant consideration and without having any evidence to explain the source of cash deposited by assessee wrongly deleted the additions. Thus there is no question of reducing the addition as per alternate contention of the assessee - in favour of Revenue. Unexplained gift - CIT(A) deleted the addition - Held that - The assessee failed to prove creditworthiness of the donor and genuine gift in the matter - Despite the donor was maintaining the bank account, no amount was withdrawn from the bank account for giving gift to the assessee - The assessee in the case of the donor also explained that Smt. Sita Devi, Attorney holder sold the land for a consideration of Rs.4,62,000/- in assessment year 2004-05 out of which the donor realized amount of Rs.1,00,000/- and gave it to the assessee as gift, but why the cash was kept for a long period without depositing in the bank account of the donor, was not explained, would also a point to the effect that it was not a genuine gift in the matter. The CIT(A) wrongly deleted the addition of Rs.1,00,000/- - in favour of Revenue.
Issues Involved:
1. Deletion of the addition of Rs. 11,60,000/- as unexplained money under Section 69A of the Income Tax Act, 1961. 2. Deletion of the addition of Rs. 1,00,000/- as unexplained money under Section 69A of the Income Tax Act, 1961. Issue 1: Deletion of Rs. 11,60,000/- as Unexplained Money Under Section 69A The Revenue appealed against the order of the CIT(A) which deleted the addition of Rs. 11,60,000/- treated as unexplained money under Section 69A. The assessee had claimed that this amount was deposited out of the sale proceeds of property sold in the previous financial year (2004-05). The Assessing Officer (AO) found the explanation unsatisfactory due to the absence of a registered sale deed, non-production of the power of attorney holder for cross-examination, delayed deposit of sale proceeds, and lack of knowledge about the purchaser. Consequently, the AO treated the amount as unexplained money. During the appellate proceedings, the CIT(A) admitted additional evidence and directed the AO to verify the claims. The AO's remand report indicated that the property was sold on 16.12.2005, and the sale proceeds were received through cheques. The CIT(A) found that the assessee had declared capital gains for the assessment year 2004-05 based on the date of the power of attorney agreement (04.04.2003) due to a lack of knowledge about the exact sale date. The CIT(A) accepted the assessee's explanation and deleted the addition, concluding that the source of the cash deposit was explained. However, upon further review, it was found that the sale actually occurred in the financial year 2005-06, making the capital gains declaration for 2004-05 incorrect. The assessee failed to provide sufficient evidence to prove that the cash was received from the power of attorney holder. The Tribunal noted that the conduct of the assessee, such as not taking legal action against the power of attorney holder and not summoning her for examination, raised doubts about the genuineness of the claim. The Tribunal concluded that the CIT(A) erred in deleting the addition and restored the AO's order, treating the amount as unexplained money. Issue 2: Deletion of Rs. 1,00,000/- as Unexplained Money Under Section 69A The Revenue also contested the deletion of Rs. 1,00,000/- treated as unexplained money, which the assessee claimed as a cash gift from her mother-in-law. The AO found that the assessee failed to prove the genuineness of the gift and the creditworthiness of the donor. The donor's bank account did not reflect sufficient funds to make the gift, and no evidence was provided to show that the donor had received the amount from the power of attorney holder. The CIT(A) accepted the assessee's explanation that the donor received money from the sale of property and used it to give the gift. However, the Tribunal found that the assessee did not provide sufficient evidence to prove the donor's creditworthiness and the genuineness of the gift. The Tribunal referred to judicial precedents emphasizing the need to establish the donor's financial capacity and the genuineness of the gift. The Tribunal concluded that the CIT(A) erred in deleting the addition and restored the AO's order, treating the amount as unexplained money. Conclusion: The Tribunal allowed the Revenue's appeal, setting aside the CIT(A)'s order and restoring the AO's additions of Rs. 11,60,000/- and Rs. 1,00,000/- as unexplained money under Section 69A of the Income Tax Act, 1961.
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