MEERA DUBEY,HYDERABAD vs. ITO, WARD - 4(3), HYDERABAD, HYDERABAD

Brief facts of the case are that the assessee is an individual and filed her return of income for the assessment year 2017-18 on 02/03/2018, declaring gross total income of Rs. 8,86,387/- as Income from House Property and Income from Other Sources. It was found that there was a deposit of Rs. 15 lakhs and Rs. 1,43,500/- in the bank accounts of the assessee during the demonetization period and the assessee explained that the sources of the cash deposits of Rs. 15,00,000/- was amount received as advance against sale of agricultural land and Rs. 1,43,500/- is from cash in hand available at home. Learned Assessing Officer accepted the deposit of Rs. 1,43,500/-, but added Rs. 15 lakhs under the suspicion that agreement of sale dated 27/01/2015 and the deposit was made on 19/11/2016 after a long lapse of time which does not appear to be normal.

When the assessee challenged this addition before the learned CIT(A), learned CIT(A) found as a matter of fact that the assessee made the cash deposit of Rs. 15,00,000/- in AP Mahesh Co-op Bank Urban Ltd. and explained the source of cash deposit of Rs. 15 Lakhs, as amount received as advance for sale of agricultural land; and that the assessee relied upon case of co-owner, allowed at the level of learned CIT(A). However, according to the learned CIT(A), it was rightly observed by the learned Assessing Officer that while the said sale agreement was executed on 27/01/2015 and that too by her late husband, the cash deposit was made 21 months later on 19/11/2016, and, therefore, in view of the huge gap between the receipt of money and the deposit, in the absence of any cogent evidence, the same cannot be believed. Learned CIT(A) accordingly dismissed the appeal. Hence the assessee is in this appeal.

Learned AR submitted that the receipt of advance sale consideration in cash is well supported by the documents like the agreement of sale and the sale deed and, therefore, the cash receipt cannot be doubted. He further submitted that the husband of the assessee died after a long sufferance with kidney problem and, therefore, there was a need to keep huge amounts of cash to meet any medical emergency and finally he succumbed to death. He submitted that keeping cash in business families is not something new and this fact is well recognized by the judicial pronouncement in the case of Vijaya Lakshmi Kammela vs. ITO in by order dated 14/07/2022, wherein the Co-ordinate Bench of the Tribunal took cognizance of the fact that it is common in our society that the old ladies sometimes keep cash with them for various reasons, including for medical emergencies.

Per contra, learned DR submitted that there was no reason for the assessee to keep such huge cash with her and the long gap between the receipt of cash and the deposit is not justified by any cogent evidence and, therefore, the same was rightly disbelieved by the authorities below.

I have gone through the record in the light of the submissions made on either side. On a perusal of the agreement of sale dated 27/01/2015, sale deed dated 04/05/2016, and the order dated 24/02/2020 in the case of one Beena Devi Dubey, one of the co-owners passed by the learned CIT(A), I find that in the sale deed dated 04/05/2016, there is a clear reference to the payment of cash to the tune of Rs. 75 lakhs towards advance and the agreement of sale dated 27/01/2015 reads that a sum of Rs. 15 lakhs was paid to the husband of the assessee. The sale deed is dated 04/05/2016 and it is long prior to the date of filing of the return of income by the assessee. Further, both the authorities below observed that the assessee has been filing the returns of income regularly.

Apart from this, the learned Assessing Officer never doubted the sale transaction nor the husband of the assessee receiving the advance in cash. It is only on suspicion based on the long gap between the receipt of cash and depositing the same, learned Assessing Officer doubted the genuineness of the cash deposit. It shall not be lost sight of that the sale was concluded only on 04/05/2016 falling in the assessment year 2017-18. Assessee declared this amount in the return of income. In these circumstances, the receipt of cash cannot be doubted.

Similar question had arisen in the case of Smt. Beena Dubey, one of the co-owners and recipient of the cash component to the tune of Rs. 15 lakhs. The learned CIT(A) observed that when she undoubtedly receives Rs. 15 lakhs towards part sale consideration under the agreement of sale dated 27/01/2015, it is not for the learned Assessing Officer to doubt the reasons for her keeping such amount with her, without depositing the same into the bank immediately. Learned CIT(A) rightly observed therein that the learned Assessing Officer cannot get into the shoes of the assessee as to what is to be done with her own money. He observed that a person with medical history has a right to hold the cash as there is no law barring such holding. According to me, this observation in the case of Smt. Beena Dubey is applicable to the facts of the case on all its fours, since the disputed Rs. 15 lakhs in both the cases emanate from the agreement of sale dated 27/01/2015.

For all these reasons, I hold that the authorities below are not justified in making and sustaining the addition and the same has to be deleted. Learned Assessing Officer is, therefore, directed to delete the same. Grounds are accordingly allowed.

In the result, appeal of the assessee is allowed.