KAMALKUMAR RAMANBHAI PATEL,UNITED KINGDOM vs. DCIT (INT. TAX), VADODARA, VADODARA

The present appeal preferred by the Assessee is directed against the Order, dated 19/07/2024, passed by The Commissioner of Income Tax, Appeals, Ahmedabad-13 [hereinafter referred to as the 'CIT(A)'] whereby Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 05/12/2019, passed under Section 143(3) r.w.s 147 of the Income Tax Act, 1961 [hereinafter referred to as 'the Act'], for the Assessment Year 2012-2013. 2. With the consent of both the sides, we condone the delay of 42 days in filing the appeal taking into consideration the explanation given in application seeking condonation of delay and proceed to adjudicate the following grounds raised by the Assessee:

The Ld. CIT(A) erred in law and facts by upholding the assessment order passed by the assessing officer under section 147 which was without passing mandatory draft assessment order u/s 144C of the Income Tax Act.

The Ld CIT(A) erred in law and facts by upholding the addition regrading cash deposited in bank accounts amounting to Rs 25,50,000/-.

When the appeal was taken up for hearing the Learned Authorised Representative for the Assessee pressed into service Ground No. 2 raised by the Assessee in the present appeal challenging the order passed by the Learned CIT(A) confirming the addition of INR.25,50,000/- in respect of cash deposits made in the bank accounts maintained by the Assessee in India. We have heard both the sides on this issue.

The relevant facts, in brief, are that the Assessee is a non-resident. During the relevant previous year cash aggregating to INR.25,50,000/- (INR.8,00,000/- and INR.17,50,000/-) was deposited in the two bank account of the Assessee in India. Reassessment proceedings were initiated in the case of the Assessee for the Assessment Year 2012-2013. In response to notice issued under Section 148 of the Act, the Assessee filed return of income declaring income of INR.75,880/-. The Assessing Officer asked the Assessee to explain the nature and source of cash deposits. In response the Assessee explained that the cash deposits represented personal/family savings, money received from relatives/friends, amounts connected with agricultural activities and funds brought to India on visits from abroad. In support the Assessee placed before the Assessing Officer (a) bank account statements of the concerned accounts, (b) copies of land revenue records such as 7/12 extracts and Form No.8A, (c) confirmation letters from family members along with PAN copies, affidavits, declarations from certain relatives/acquaintances, and (d) copy of passport. However, the Assessing Officer was not satisfied with documents furnished by the Assessee. According to the Assessing Officer there were infirmities in the documents and that the Assessee had failed to establish proper nexus between the claimed sources of cash with the cash deposits actually made in the bank accounts. The Assessing Officer rejected the explanation offered by the Assessee and concluded that the source of the cash deposits had remained unexplained. Therefore, addition of INR.25,50,000/- was made in the hands of the Assessee.

In appeal, the Ld. CIT(A) confirmed the addition concurring with the Assessing Officer. The Ld. CIT(A) held that the Assessee had failed to produce reliable corroborative material to substantiate the explanation regarding the source of cash deposits and therefore, has failed to discharge the burden cast upon him. The Ld. CIT(A) further held that though the Assessing Officer had not expressly referred to the section under which the addition was made, the nature of the addition justified its confirmation under section 69A of the Act.

Being aggrieved, the Assessee carried the issue in appeal before the Tribunal as Ground No. 2 raised in the present appeal.

Before us, the Learned Authorised Representative for the Assessee submitted that the lower authorities erred in rejecting the explanation furnished by the Assessee without properly appreciating the material already placed on record. It was submitted that the Assessee was a non-resident for many years and had no business activity in India. It was further submitted that the documents furnished by the Assessee constituted the primary material available in support of the explanation and that the authorities below failed to appreciate the same.

Per contra, the learned Departmental Representative relied upon the orders of the lower authorities and submitted that the Assessee had failed to establish the source of the cash deposits by reliable and verifiable evidence. According to the Learned Departmental Representative, the evidence furnished by the Assessee did not satisfactorily prove the claimed sources and, therefore, it was submitted that the addition was rightly sustained by the Learned CIT(A).

We have considered the rival submissions and have perused the material on record. It is admitted position that the Assessee is a non-resident for many years. It is also not disputed that the Assessee had furnished material in support of the explanation for cash deposits, namely bank statements, land records, confirmations, affidavits/declarations and passport copy. While some infirmities were pointed out by the Learned Assessing Officer, no inquiry/verification was carried out by the Assessing Officer to check the veracity of the documentary evidence furnished by the Assessee. In any case, we are of the view that the infirmities pointed out by the Assessing Officer were not sufficient to reject the documents. The Assessee had explained that the Assessee was a non-resident and on visits to India Assessee carried money which was kept with family and relatives. In support of travel to India, the Assessee filed his passport. This has not been disputed by Revenue. There is nothing on renderecord to suggest that the Assessee had any unaccounted income from any source in India. While the Assessee had placed before the Assessing Officer land records and affidavits to support that the Assessee received funds as agricultural income. Therefore, in view of the facts and circumstances of the present case, accepting the explanation offered by the Assessee in relation to nature and source of cash deposits in the two bank accounts in India, we delete the addition of INR.25,50,000/- made by the Assessing Officer. Thus, Ground No.2 raised by the Assessee is allowed. Ground No. 1 is dismissed, both, as having been rendered infructuous and not pressed.

In result, appeal preferred by the Assessee is partly allowed.

""यथ"/ The Respondent. 3. संबंिधतआयकरआयु"/ Concerned CIT 4. आयकरआयु"(अपील) / The CIT(A) 5. िवभागीय"ितिनिध, आयकरअपीलीयअिधकरण/ DR, ITAT, 6. गाड"फाईल /Guard file. आदेशानुसार/BY ORDER, उप/सहायकपंजीकार (Dy./Asstt.