2018 (1) TMI 335 - AT - Income Tax

Unexplained cash credit u/s 68 - Held that - The claim of the assessee of having received an advance of ₹ 8,00,000/- against property from M/s. Tysom Agencies Pvt. Ltd. was duly supported by a letter issued by the said party confirming the payment of advance to the assessee. Similarly the claim of the assessee of having withdrawn cash from his other bank accounts maintained with Bank of Maharashtra and Axis Bank was also supported by the copies of relevant bank statements filed by the assessee. It is observed that the Ld. CIT(A) however did not accept this explanation of the assessee which was duly supported by the relevant documentary evidence on the basis of certain infirmities and discrepancies pointed out by him. Assessee has prepared and furnished a tabular chart before the Tribunal offering the explanation of the assessee in respect of each and every objection raised by the Ld. CIT(A) and a perusal of the same shows that the explanation offered by the assessee is sufficient to meet all the objections raised by the Ld. CIT(A) while rejecting the explanation offered by the assessee as regards the source of cash deposits made in his bank account with Axis Bank. Keeping in view the entire material placed on record before the Tribunal, find that the source of cash deposits found to be made in his bank account with Axis Bank aggregating to ₹ 12,12,000/- is property explained by the assessee on evidence and there is no justification on the part of the authorities below to treat the same as unexplained cash credit under section 68 - Decided in favour of assessee.

Summary

Issues Involved:
Addition of unexplained cash credit under section 68 of the Income Tax Act, 1961.

Detailed Analysis:

1. Nature of Addition:
The appeal was against the addition of ?12,12,000 made by the Assessing Officer (A.O.) and confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)] as unexplained cash credit under section 68 of the Income Tax Act, 1961.

2. Assessee's Explanation:
The assessee, an individual employed by a company, explained the source of cash deposits in his bank account during the appellate proceedings before the CIT(A). He provided a detailed breakdown of the sources of cash, including withdrawals and advances received against property sale.

3. CIT(A)'s Rejection of Explanation:
The CIT(A) did not accept the assessee's explanation, citing various discrepancies and inconsistencies in the provided documents. The CIT(A) raised concerns about missing agreements, reasons for deal cancellations, and the timing of cash withdrawals and deposits.

4. Tribunal Decision:
The Tribunal considered the documentary evidence provided by the assessee to support his explanation. The Tribunal found the explanation sufficient to address all objections raised by the CIT(A). The Tribunal concluded that the source of cash deposits was adequately explained by the assessee, deleting the addition made by the A.O. under section 68.

5. Conclusion:
The Tribunal allowed the appeal of the assessee, emphasizing that the source of cash deposits was adequately explained with supporting evidence. The Tribunal found no justification for treating the cash deposits as unexplained, overturning the decisions of the A.O. and CIT(A).

This detailed analysis highlights the progression of the case, the arguments presented by both parties, and the ultimate decision of the Tribunal in favor of the assessee based on the satisfactory explanation provided for the cash deposits.