9911796707
TMI Blog2025 (2) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant details being available on record. In view of the above, we hold that the assessee has duly discharged the primary onus under Section 68 of the Act concerning the cash deposit of ₹ 1.57 crore in Andhra Bank. Since the Revenue has not controverted this explanation through independent inquiry or contrary evidence, we hereby set aside the findings of the lower authorities and direct the AO to delete the addition of ₹ 1.57 crore. Cash Deposits in Chartered Sahakari Co-operative Bank and Karnataka State Apex Co-operative Bank - We observe that the assessee has made cash withdrawals from these banks throughout the year. Similarly, we also note that there was balance cash receipt of Rs. 50 lacs (200 lacs less 150 lacs) against the sale of the property discussed above. The aggerate of all these cash is sufficient to justify the deposit of cash discussed above. At the same time, the revenue has not brought anything on record suggesting that the amount of cash available in his hands discussed above has been utilised for any other purposes i.e. personal expenses or investments other than the deposit in the impugned bank accounts. Given these facts and circumstances, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while doing so CIT(A) has failed to appreciate: a) that the explanation given by the assessee for an amount of Rs. 1,50,00.000/- was received by the assessee as an amount of advance from Mr. Chandra Kaladhar Reddy on account of proposed sale of immovable property owned by the assessee as it was evident from the payment made out of the said amount of Rs. 1,0,00,000/- for purchase of two immovable properties for a total sum of Rs. 1,62,43,992/- for which the payment was made immediately from the same bank account and share of Mr. Chandra Kaladhar Reddy was a sum of Rs. 1,21.33,185/- and for assessee it was only a sum of Rs. 41.10,807/- and assessee's own investment in purchase was a sum of Rs. 28.66,815/-. The explanation furnished by the assessee is supported by documentary evidence and is plausible, therefore, has been wrongly rejected by the AO and CIT(A) just for making and upholding the addition. b) Ld. CIT(A) has failed to appreciate that the other amount of Rs. 72,48,000/- (amount of cash deposits being Rs. 2,22,48,000/- (-) Rs. 1,50,00,000/- being received from Mr. Chandra Kaladhar Reddy) was nothing but was either from cash withdrawals from the bank accounts or own s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... controverted and nothing has been brought on record to show that the cash withdrawals were utilized somewhere else, therefore, addition has wrongly been upheld in this regard. 5. That under the facts and circumstances of the case. Ld. CIT(A) has erred in law as much as in fact in upholding the addition of Rs. 12,45,000/- comprising of Rs. 10,00.000/- being on account of alleged unaccounted commission received from KR Shelters Pvt. Ltd. and also a sum of Rs. 2,4.000/-. The addition is prayed to be deleted. 6. That under the facts and circumstances of the case. Ld. AO has erred in law as much as in fact in levying interest under section 234A. 2343. and 234C of the Act. 7. That appellant craves to leave, alter, amend or modify the grounds of appeal before or during the hearing of the appeal. 8. That each ground is independent and without preju dice to ether." 3. The interconnected issue raised by the assessee vide ground Nos. 1 to 4 is that the learned CIT(A), erred in confirming the addition of cash deposit in the banks aggregating to Rs. 2,22,48,000/- as unexplained under section 68 of the Act. 4. The facts, in brief, are that the assessee is an individual earning income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92/- only. Accordingly, on the same day (06-06-2013), the assessee issued a pay order for ₹ 1,62,43,992/- from his bank, funded by the cash deposit of ₹ 1.5 crore. In this transaction, the assessee's share of the property cost amounted to ₹ 41,10,807/-, while Shri Chandra Kaladhara Reddy's share stood at ₹ 1,21,33,185/-. Therefore, out of the ₹ 1.5 crore received from Shri Chandra Kaladhara Reddy, ₹ 1,21,33,185/- was refunded through payment towards the purchase cost of the new property, leaving a balance of ₹ 28,66,815/-. 11. As Shri Chandra Kaladhara Reddy had agreed to retain ₹ 37 lakh as an advance for the future purchase of the assessee's property, but only ₹ 28,66,815/- remained from the original advance, Shri Chandra Kaladhara Reddy made an additional cash payment of ₹ 8,33,185/- to fulfill the agreed advance amount. This additional cash payment was subsequently utilized for making cash deposits in Andhra Bank amounting to ₹ 7 lakhs over time. 12. Based on the above explanation, the assessee contended that the cash deposit of ₹ 1.57 crore in Andhra Bank during the year was duly explained. 13. Rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. No attempt has been made in the submission to explain the source of such huge amount received from him. Under the circumstances, the AO has correctly treated the amount of Rs. 1,50,000/- as unexplained. 12.4 Other deposit of Rs. 7,00,000/- in Andhra Bank: These deposits were made on 17.09.2013, 2.11.2013 and 05.03.2014 in amounts of Rs. 1,00,000/- Rs. 1,00,000/- and Rs. 5,00,000/- respectively. As per the AO's Remand Report, the appellant has not given any details in the submission. However, the appellant has stated that explanation is already provided in para 11 of the written submission. On perusal of the said submission, it is seen that the source of the same is cash of Rs. 8,33,185/- received from same Mr. Chandra Kaladhara Reddy. No explanation regarding the source of Mr. Chandra Kaladhara Reddy has been given by the appellant. Therefore, the explanation is not acceptable and the addition made by the AO is sustained. 12.5 The appellant has explained that there is a mistake in AO's order regarding the amount of cash deposit in Chartered Sahakari Co-op. Bank. The cash deposit is mentioned as Rs. 52,48,000/- which is actually Rs. 13,00,000/- whereas the cash deposit of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Shri Chandra Kaladhara Reddy, it was impractical to obtain a confirmation from him regarding the source of the funds. However, the authorities failed to conduct any independent inquiries with Shri Reddy and instead summarily rejected the explanation provided by the assessee. 17.4 The learned AR also emphasized that a significant portion of the cash deposits was immediately utilized for the purchase of property, which substantiated the genuineness of the source of funds. 17.5 Additionally, the assessee challenged the addition of ₹ 7,00,000/- in Andhra Bank, arguing that a proper explanation had been provided but was disregarded by the authorities. Similarly, with respect to the deposits of ₹ 52,48,000/- in Karnataka State Apex Co-operative Bank and ₹ 13,00,000/- in Chartered Sahakari Co-operative Bank, the assessee asserted that these amounts originated from prior withdrawals, a claim that had not been disproved by the revenue authorities. Therefore, the assessee argued that treating these deposits as unexplained was unjustified. 17.6 On the contrary, the learned DR before us submitted that it is the onus upon the assessee to justify the source of cash dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection that the assessee failed to return the entire advance to Shri Chandra Kaladhara Reddy is misplaced. Consequently, treating the entire cash deposit as unexplained cash credit is grossly unjustified given the facts and circumstances of the case. The funds were not retained by the assessee for personal use but were instead utilized for a property transaction in which Shri Chandra Kaladhara Reddy was the primary beneficiary. 18.4 The fact that the money was used for the stated purpose, as corroborated by official sale-purchase documents, validates the genuineness of the assessee's explanation. Therefore, in our considered opinion, no addition to the extent of ₹ 1,21,33,185/- should be made in the hands of the assessee concerning the cash deposit of ₹ 1.5 crore for the reasons stated above. 18.5 With regard to the question raised by the AO and the learned CIT(A) regarding why the entire amount was not returned, it is noted that the assessee explained that, as per the new proposal, Shri Chandra Kaladhara Reddy agreed to purchase the assessee's property in the future and that an advance of ₹ 37 lakh was agreed upon. After adjusting ₹ 1,21,33,185/- from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of the property discussed above. The aggerate of all these cash is sufficient to justify the deposit of cash discussed above. At the same time, the revenue has not brought anything on record suggesting that the amount of cash available in his hands discussed above has been utilised for any other purposes i.e. personal expenses or investments other than the deposit in the impugned bank accounts. Given these facts and circumstances, we are inclined to set aside order of the learned CIT-A with the direction to the AO to delete the addition made by him on account of cash deposits in the bank. Accordingly, the assessee's grounds of appeal concerning the additions made on account of cash deposits in Chartered Sahakari Co-operative Bank and Karnataka Apex Co-operative Bank are hereby allowed. 20. The next issue raised by the assessee is that the learned CIT(A) erred in confirming the addition of Rs. 12.45 Lakh. 21. During the assessment proceedings, the AO observed that the assessee's bank account with Andhra Bank was credited with ₹ 10 lakh from M/s KR Shelter on account of commission, which was not offered to tax. Similarly, the Andhra Bank account was credited with ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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