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Facts
The Assessing Officer (AO) treated cash deposits of Rs. 13,64,000/- made by the assessee as unexplained income under Section 69A, rejecting the assessee's explanation that the funds came from the sale of a house. The AO's decision was based on the statement of the purported buyer, Shri Mukesh Joshi, who denied the purchase.
Held
The Tribunal noted that the assessee had booked a property with Sahara and sold the booking right to Shri Rajendra Kumar Jain, with Shri Mukesh Joshi acting as a broker. The assessee's initial representation that Shri Mukesh Joshi was the buyer was due to a misunderstanding. New evidence, including a confirmatory certificate from Sahara, supported this corrected version.
Key Issues
Whether the cash deposits in the bank account were unexplained income, or if they represented the sale proceeds of a property booking right, and the validity of the AO's rejection of the assessee's explanation based on a third party's statement.
Sections Cited
147, 143(3), 148, 143(2), 142(1), 133(6), 131, 69A
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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first appeal dated 14.02.2025 passed by learned Commissioner of Income-Tax (Appeals)-Addl/JCIT(A)-Bengaluru [“CIT(A)”] which in turn arises out of assessment-order dated 26.11.2018 passed by learned ITO-1(4), Bhopal [“AO”] u/s 147 r.w.s. 143(3) of Income- tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2011-12, the assessee has filed this appeal.
The background facts leading to present appeal are such that the AO, on the basis of information in his possession from AIR revealing that the assessee deposited cash of Rs. 13,64,000/- in a/c with SBI, issued notice Page 1 of 6
Narmada Prasad Malviya ITA No. 341/Ind/2025 – AY 2011-12 dated 28.03.2018 u/s 148 to make assessment u/s 147. In response to
such notice, the assessee filed his return of income declaring a total income
of Rs. 1,86,250/-. Thereafter, the AO issued notices u/s 143(2)/142(1) in
response to which the assessee made submissions. The AO also called
details directly from SBI u/s 133(6). In so far as the source of deposits of Rs.
13,50,000/-, the assessee submitted that he sold his house situated at
2/5B-5, M/s Sahara India Commercial Corporation Limited [“Sahara”],
Bhopal, to one Shri Mukesh Joshi for Rs. 15,00,000/- and received
consideration of Rs. 9,50,000/- on 20.06.2010 (+) Rs. 5,50,000/- on
15.08.2010, which was utilized for making deposits in bank a/c. The
assessee also filed cash flow statement to AO [Para 4 of assessment-order].
The AO considered assessee’s submission and examined Shri Mukesh Joshi
u/s 131. The statements of Mukesh Joshi were recorded by AO which are
re-produced on Page 6 of assessment-order. Shri Mukesh Joshi denied
having made any purchase of house from assessee. Ultimately, after taking
into account statements of Shri Mukesh Joshi, the AO rejected assessee’s
submission and treated the cash deposits of Rs. 13,64,000/- in bank a/c as
unexplained money u/s 69A, accordingly made addition and completed
assessment. Aggrieved, the assessee went in first-appeal but did not get any
success. Now, the assessee has come in next appeal before us.
During hearing before us, Ld. AR for assessee made following
submissions:
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Narmada Prasad Malviya ITA No. 341/Ind/2025 – AY 2011-12 (i) That, the assessee booked/purchased a house/unit No. 2/5B-5 with
Sahara. The assessee sold/transferred his booking right to Mr.
Rajendra Kumar Jain through broker Shri Mukesh Joshi. However,
the assessee, due to his limited understanding, got impression that
the said house/unit was sold to Shri Mukesh Joshi. Hence, there was
no sale to Shri Mukesh Joshi, the sale was to Mr. Rajendra Kumar
Jain. To establish this correct fact, the assessee has filed a
Confirmatory Certificate dated 14.10.2010 issued by Sahara wherein
Sahara has confirmed that the assessee’s booking was transferred in
the name of Mr. Rajendra Kumar Jain. Further, a payment of 2% of
unit price was also made to Sahara towards transfer fee. The Payment
Schedule of Sahara is also filed. These documents are filed at Pages 1-
3 of Paper-Book.
(ii) That, the assessee was under distressed circumstance since his son
suffered from a serious disease (and unfortunately expired also
untimely) and hence the booking of house/unit was sold to arrange
finance. Further, assessee’s wife Smt. Asha Malviya has also expired
adding more challenges to assessee.
Therefore, Ld. AR submitted, the case of assessee requires a fresh
adjudication by AO taking into account correct facts. Ld. AR prayed to
restore this case to the file of Jurisdictional Assessing Officer (JAO). He
assured that the assessee shall extend full co-operation to JAO and make an
effective representation.
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Narmada Prasad Malviya ITA No. 341/Ind/2025 – AY 2011-12 5. Ld. DR for revenue though dutifully supported the orders of lower
authorities but ultimately, considering the facts of case and compelling
circumstances being faced by assessee, left the matter to the wisdom of
bench without raising any objection against remand to JAO.
We have heard both the sides and carefully perused the material on
record. The core dispute revolves around cash deposits of Rs. 13,64,000/-
made by the assessee in his SBI bank account during AY 2011-12, which
the AO treated as unexplained money u/s 69A. The AO's rejection of the
assessee's explanation was primarily based upon the statement of Shri
Mukesh Joshi recorded u/s 131 wherein Shri Mukesh Joshi categorically
denied having purchased any house from assessee. However, a crucial fact
has now emerged before us, which was not brought to the attention of the
lower authorities in the correct perspective at the relevant time. As per the
clarification now advanced by Ld. AR, the assessee had booked/purchased a
house/unit No. 2/5B-5 from Sahara and the said booking-right was
subsequently transferred/sold not to Shri Mukesh Joshi personally, but to
one Shri Rajendra Kumar Jain, with Shri Mukesh Joshi acting merely as a
broker/middleman facilitating the transaction of sale. The assessee, due to
limited understanding of real estate transaction procedures, erroneously
represented before AO that the house was sold to Shri Mukesh Joshi, which
naturally led Shri Mukesh Joshi to deny any purchase having been made
from assessee. In support of this corrected version of facts, the assessee has
placed on record certain documents as narrated by us in earlier para 3(i) of
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Narmada Prasad Malviya ITA No. 341/Ind/2025 – AY 2011-12 this order. Those documents emanating from Sahara itself, a third-party
corporate entity, carry significant evidentiary weight and prima facie
corroborate the assessee's revised and clarified explanation regarding the
source of the impugned cash deposits.
We further observe that the AO has not assessed the capital gain
which arose to assessee from impugned transaction of transfer/sale of
house/unit. On a query raised by bench, Ld. Representatives of both sides
accepted that the resultant capital gain has to be assessed.
Furthermore, the Ld. DR for the Revenue, while dutifully supporting
the orders of the lower authorities, did not raise any specific objection to the
matter being remanded to the file of the JAO for fresh adjudication in light
of the fresh/clarified facts and documentary evidence now available on
record.
In view of foregoing, we are of the considered opinion that the matter
warrants a fresh adjudication by JAO. The JAO shall examine the
documents filed by assessee. He may also make necessary enquiries from
Shri Rajendra Kumar Jain regarding purchase of the impugned house/unit
from assessee. Thereafter, the JAO shall pass a fresh order in accordance
with law after affording assessee a reasonable opportunity of being heard.
The assessee, through his Ld. AR, has assured full co-operation and
effective representation, and we expect that such assurance shall be
honoured. Accordingly, the matter is restored to the file of the JAO for a
Page 5 of 6
Narmada Prasad Malviya ITA No. 341/Ind/2025 – AY 2011-12 fresh adjudication in light of the observations made hereinabove, keeping all
issues open.
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 17/04/2026
Sd/- Sd/-
(PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER
Indore
िदनांक/Dated : 17/04/2026
Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order E COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
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