2022 (9) TMI 773 - AT - Income Tax

Unexplained cash deposits in bank account - explanation for source of cash deposits in his Bank of India account as being out of his share in the sale of land, jointly owned along with members of his family, is duly and satisfactorily substantiated - HELD THAT - The entire evidences as reasonably and satisfactorily demonstrating the flow of money to the assessee in cash from the proceeds received of land sold we see no reason to disbelieve the assesses explanation of the source of cash deposit in bank being attributable to his share in land sold by family received in cash from his brother . Addition on account of unexplained cash deposits is accordingly directed to be deleted. - Decided in favour of assessee.

Summary

Issues:
Condensation of delay in filing appeal due to health reasons, Addition made to income on account of unexplained cash deposits in bank account.

Analysis:
1. The appeal filed by the assessee was delayed by 52 days, citing health issues as the reason. The delay was condoned by the tribunal as it was established that the delay was due to circumstances beyond the assessee's control, specifically related to medical treatment. The delay was deemed justifiable, and the appeal was heard accordingly.

2. The main issue in the appeal pertained to the addition made to the assessee's income due to unexplained cash deposits of Rs.6.00 lakhs in the bank account. The Assessing Officer had noted cash deposits totaling Rs.16,73,000 and added the entire amount to the assessee's income. The assessee provided explanations for the cash deposits, attributing them to business receipts and proceeds from the sale of land jointly owned with family members.

3. The tribunal examined the documentary evidence presented by the assessee, including sale agreements, bank statements, and post-dated cheques. The tribunal found that the explanation provided by the assessee regarding the source of the cash deposits was substantiated satisfactorily. The sale deed of the land, along with bank statements and transaction details, supported the assessee's claim that the cash deposits were from the proceeds of the land sale.

4. Based on the evidence presented, the tribunal concluded that the source of the cash deposits of Rs.6.00 lakhs in the assessee's bank account was indeed attributable to the sale of land and the share received by the assessee from the transaction. The tribunal found no reason to doubt the assessee's explanation and directed the deletion of the addition made to the income on account of unexplained cash deposits.

5. Consequently, the tribunal allowed the appeal of the assessee, ruling in favor of the assessee regarding the addition made to the income. The order was pronounced in court on 15th September 2022 in Ahmedabad. The tribunal's decision was based on the thorough examination of the evidence presented by the assessee, which convincingly supported the source of the cash deposits in question.