2017 (6) TMI 393 - AT - Income Tax

Addition u/s 68 - unexplained cash credit made in S.B. Account of the assessee with Corporation Bank - Held that - each and every detail pertaining to 37.50 lakh have been given by the assessee and in Paper Book Page No.30 to 35 all details have been furnished. In the light of the above submission we do not find any infirmity in the order passed by the CIT(A) in deleting the addition - Decided against revenue

Summary

Issues involved:
Appeal against deletion of addition of unexplained cash credit under Section 68 of the IT Act for the Assessment Year 2008-09.

Analysis:
1. Grounds of Appeal: The revenue appealed against the deletion of the addition of ?37,50,000 made under Section 68 of the IT Act. The CIT(A) was criticized for not considering the legal position and reasons provided by the AO, and for passing the appellate order without giving the AO an opportunity to be heard.

2. Facts and Explanation: The appellant deposited cash in the bank account on various dates, claiming it was advance money for the sale of plots. Evidence submitted included cash and bank books, conveyance deeds, and confirmation from the dealing party. The appellant explained that due to a deal dispute, the money was returned. The AO issued a show cause notice questioning the source of the cash deposit, as the dealing party denied making any payment.

3. Assessing Officer's Decision: The AO rejected the appellant's explanation, citing lack of buyer details, absence of sale agreements, and timing discrepancies. The AO concluded that the cash deposit was from undisclosed sources, treating it as unexplained cash credit under Section 68 and adding it to the appellant's income.

4. CIT(A) Decision: The CIT(A) favored the appellant, considering the explanations and evidence provided. The CIT(A) noted that the AO failed to provide the dealing party's statement for rebuttal. Referring to legal precedents, the CIT(A) emphasized that suspicion cannot replace facts. The CIT(A) highlighted the AO's failure to consider the appellant's sources of income and the timing of payments for the plots.

5. Appellate Tribunal's Decision: The Appellate Tribunal upheld the CIT(A)'s decision, finding no flaws in the order. Detailed information provided by the appellant supported the deletion of the addition. The Tribunal dismissed the revenue's appeal, affirming the deletion of the ?37,50,000 addition under Section 68 of the IT Act for the Assessment Year 2008-09.