2015 (7) TMI 485 - HC - Income Tax

Unaccounted cash - CIT(A) directing the AO to make addition of only peak of the deposits in the bank account after getting the details from the appellant - Held that - AO had also found that the appellant had deposited a sum of ₹ 12,30,500/- in another bank account. The appellant s case is that this amount was deposited out of the sale consideration of a plot or land which was sold for ₹ 75,68,761/-. The appellant s further case was that he had a half share and that the deposit was made from the sale proceeds received by him. The appellant also contended that this plot was purchased earlier by selling his old house for ₹ 12 lacs. As no details were filed regarding the purchase of the earlier house, the AO did not accept the fact of sale of the old house and subjected the sale consideration amounting to ₹ 37,84,380/- as short term capital gain. The appellant s case regarding these transactions are purely questions of fact. The CIT (Appeals) in fact again directed the AO to allow ₹ 12,85,500/- on account of cost of acquisition of the earlier property and granted the appellant relief to that extent. The cost of acquisition of the new property was, therefore, reduced from half of the sale price taxed by the AO as capital gain. Accordingly, the short term capital gain was held by the CIT (Appeals) to be ₹ 25,01,880/-. No substantial question of law.

Summary

Issues:
1. Cash deposit in savings bank account for assessment year 2009-2010.
2. Deposit in another bank account from sale consideration of a plot.

Analysis:
1. The first issue pertains to a cash deposit of &8377; 11,04,167/- in the appellant's savings bank account during the assessment year 2009-2010. The AO noted the discrepancy between the cash deposit and the gross turnover of the appellant's business. The AO made an addition of the entire cash deposit amount as income due to lack of supporting sale/purchase details. The CIT (Appeals) acknowledged the appellant's failure to maintain proper accounts but directed the AO to consider only the peak deposit amount in the bank account after verifying details from the appellant. The High Court found these to be factual issues requiring evidence appreciation and concluded that no substantial question of law arose in this regard.

2. The second issue involves a deposit of &8377; 12,30,500/- in another bank account, claimed by the appellant to be from the sale consideration of a plot. The AO disputed the claim due to the absence of documentation regarding the sale of the old house. Consequently, the AO treated a portion of the sale consideration as short term capital gain. The CIT (Appeals) directed the AO to allow &8377; 12,85,500/- towards the cost of acquisition of the earlier property, reducing the capital gain amount. As this issue also revolved around factual matters, the High Court held that it did not raise a substantial question of law.

In conclusion, the High Court dismissed the appeal after analyzing the two main issues related to cash deposits in bank accounts and the sale consideration of a plot. The judgment emphasized the factual nature of the disputes and the absence of substantial legal questions, leading to the dismissal of the appeal.