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2022 (10) TMI 357 - HC - Income TaxUnexplained cash deposit in the bank - only contention of the appellant is that the amount deposited in the appellant s account is the sale value of land belonging to the appellant s wife which was sold in favour of Shri.Sajeev Mathai - HELD THAT - Merely by producing the sale deed which shows the sale consideration and trying to connect it with the deposit in the account on the very same day of the same transaction will not discharge the onus from the shoulder of the assessee. Only if the assessee discloses the source of income (the entire amount) then only the burden under Section 106 of the Evidence Act stands discharged and the onus then shifts to the AO. In the case on hand, the amount deposited whereas the document shows only the value - Thus, the appellant though disclosed the source of the cash deposit in the bank, he has not discharged the burden of proof on him. Hence the decision reported by the counsel for the appellant has no application. Tribunal looked into all the aspects and found that the AO as well as the first appellate authority failed to give credit to the amount which was shown in the sale deed and thereby it was partly allowed reducing the total income - we are of the opinion that the substantial questions of law are answered against the appellant.
Issues:
1. Assessment of undisclosed income based on cash deposit in the bank account. 2. Burden of proof on the assessee to substantiate the source of cash deposit. 3. Interpretation of sale deed value versus actual consideration received. 4. Application of legal precedents in determining burden of proof in income tax cases. Analysis: Issue 1: Assessment of undisclosed income based on cash deposit The appellant, an individual employed in a company, disclosed an income in the return for the assessment year but faced scrutiny due to a cash deposit of Rs.30,00,000 in the bank account. The Income Tax Officer passed an assessment order directing payment of a balance tax of Rs.12,29,570 as the appellant failed to explain the source of the cash deposit. Issue 2: Burden of proof on the assessee The appellant contended that the cash deposit represented the sale proceeds of land belonging to his wife, supported by a sale deed. However, despite ample opportunities, the appellant failed to establish a clear correlation between the sale price of the land and the cash deposit. The burden of proof shifted to the appellant to substantiate the source of income, which he failed to do adequately. Issue 3: Interpretation of sale deed value vs. actual consideration The Tribunal partially allowed the appeal, giving credit of Rs.3,35,700 disclosed in the sale deed against the cash deposit of Rs.30,00,000. The appellant argued that the actual consideration for the sale was Rs.31,00,000, with an advance of Rs.1,00,000. However, the value in the sale deed was significantly lower, leading to discrepancies in the assessment of undisclosed income. Issue 4: Application of legal precedents The appellant relied on a legal precedent to shift the burden of proof to the Income Tax Officer, emphasizing the need for verification from the purchaser of the property to confirm the source of funds. However, the respondent highlighted the failure of the appellant to provide cogent evidence linking the cash deposit to the sale proceeds, leading to the dismissal of the appeal. In conclusion, the High Court upheld the decision against the appellant, emphasizing the failure to adequately prove the source of the cash deposit despite assertions regarding the sale proceeds. The judgment underscores the importance of substantiating claims with concrete evidence in income tax assessments to avoid assessments of undisclosed income.
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