2018 (12) TMI 807 - AT - Income Tax

Unexplained cash found deposited in the bank account of assessee - Held that - CIT-A has passed a cryptic order merely stating that the evidences filed by the assessee were not sufficient to explain the large cash deposits made by the assessee without pointing out the insufficiency in the evidences filed. The assessee had demonstrated that he was earning salary alongwith his wife amounting in all to ₹ 2,26,680/- and ₹ 2,23,200/- respectively which had been substantiated by way of salary certificate filed. The assessee had also stated that he was earning lease income from the agricultural land which was in the name of the father of the assessee but who had given the assessee the responsibility of collecting revenue earned from the same. Evidences substantiating the ownership of the land by the father were also filed. The documents evidencing leasing out of the agricultural land was also filed. None of the above documents have been controverted, nor any infirmity found in the same by the CIT(Appeals). In fact, we find that the CIT(Appeals) has not even taken the pain to go through them and has without any basis at all dismissed the above sources as attributable to the cash deposits. Moreover, we also find that the assessee had also filed a cash flow statement explaining the source of various cash deposits in the bank. CIT(Appeals) has erred, therefore, in stating that no cash flow statement was filed by the assessee - Decided in favour of assessee.

Summary

Issues:
- Addition made on account of unexplained cash deposits in the bank.

Analysis:
The appeal was filed against the order of the Ld. Commissioner of Income Tax (Appeals) regarding the addition made on account of cash found deposited in the bank of the assessee. The Assessing Officer noted that a significant amount of cash was deposited in the bank account of the assessee, which remained unexplained despite various opportunities provided. Consequently, the entire cash amount was added to the income of the assessee.

Before the Ld. CIT(Appeals), the assessee submitted detailed explanations regarding the source of the cash deposits, attributing them to agricultural income, sale of trees, and salary received in cash. However, the Ld. CIT(Appeals) held that the assessee failed to establish the source of the cash deposits with proper evidence. The Ld. CIT(Appeals) specifically listed the dates and amounts of the cash deposits, totaling to Rs. 6,31,900, and noted the lack of cash flow details or withdrawal information provided by the assessee.

In the appeal before the Appellate Tribunal, the assessee reiterated that the cash deposits were from salary earnings and agricultural income. The assessee provided certificates from the college where they worked, evidence of land ownership, leasing agreements, and cash flow statements. The Tribunal observed that the Ld. CIT(Appeals) upheld the addition without sufficient basis, disregarding the evidence provided by the assessee. The Tribunal found that the assessee had adequately explained the source of the cash deposits with substantiated evidence, including salary certificates and land ownership documents. The Tribunal concluded that the addition on account of unexplained cash deposits was not sustainable and directed for its deletion.

In the final judgment, the Appellate Tribunal allowed the appeal filed by the assessee, directing the deletion of the addition made on account of unexplained cash deposits. The Tribunal emphasized that the assessee had provided satisfactory evidence to support the source of the cash deposits, which remained uncontroverted by the Revenue.