MANMEET SINGH SAHNI,DELHI vs. ITO WARD-29(3), DELHI

Brief facts of the case are that the assessee has filed his return of income on 27.07.2017, declaring total income of INR 3,93,260/-.

Aggrieved by the said order, the assessee preferred appeal before Ld. CIT(A) who dismissed the same by treating the details filed by the assessee as additional evidences and in absence of separate application for admission of additional evidence, has not accepted the contention of the assessee.

Aggrieved by the order of Ld. CIT(A), the assessee is in appeal before the Tribunal by taking various Grounds of appeal mentioned Page | 2

During the course of hearing, the assessee has taken additional grounds of appeal wherein he has challenged the additions by stating that the AO has exceeded the jurisdiction in asking the assessee for source of source of the deposits.

Heard the contentions of both the parties at length and perused the material available on record. At the outset, it is observed that the assessee has filed details before the AO regarding the immediate source of funds for acquisition of immovable property and further filed copy of cash book in support of the cash deposited during the demonetization period which were not considered by AO properly. Before Ld. CIT(A), the assessee again filed the same, comprising of bank statements, cash book and purchase deed etc. however, the Ld. CIT(A) at page 6 of its order, has observed that assessee has not filed any application for admission of additional evidences and thus, he has confirmed the additions made on the basis of material available on record. The claim of the assessee was that since all these documents were filed before the AO and no new evidence was filed before Ld. CIT(A) only copies of the certain judgments relied upon were filed thus, there was no occasion to file the prayer for admission of additional evidence. From the perusal of the reply filed before the AO, in response to notice u/s 142(1) dated 14.09.2019 placed at page 16 to 72 of the Paper Book, it is observed that assessee has filed all Page | 3

Since all the details were filed before AO, the observations of Ld. CIT(A) that these are additional evidences is not correct and are ignored and excluded while deciding the issues on merits.

Coming to the first addition of INR 2,91,50,000/-, it is observed that the assessee has filed copy of Gift Deed executed on 22.06.2017 placed at pages 25 to 27 of Paper Book and copy of bank statement of his mother which is placed at pages 28 to 43 of Paper Book. It is further observed that in the Gift Deed, mother of the assessee has admitted to made absolute gift of INR 2,91,98,775/- out of natural love and affection to the assessee on various dates through Account Payees cheques of different dates and amounts which all are debited from her bank account and credited in the bank account of the appellant during the Financial Year 2016-17 relevant to AY 2017-18 i.e. the year before us. Thus, the observation of the Ao that the gift was received by the assessee in subsequent assessment year is not correct. It is further observed that sufficient balance was available in the bank account of the mother of assessee when funds were transferred to the assessee. The gift has been accepted by the mother and immediate source of the same in the hands of the mother of the assessee is further established as there were sufficient balance in her bank accounts. Moreover, all the funds were transferred through

In view of overall discussion made herein above and considering the facts available on record, we are of the considered opinion that both the lower authorities were not correct in holding the gifts as not pertained to the year under appeal and immediate source of purchase of property remained unexplained. Once the assessee has successfully demonstrated that immediate source is out of the gifts received from his mother and the copy of her bank account alongwith the Gift Deed are filed before the lower authorities, which remained uncontroverted and no doubts were raised about the availability of the funds and genuineness of the same, the source for purchases of property stood explained. Therefore, the addition made of Rs. 2,91,50,000/- towards the investment in acquisition of property is hereby, deleted. Accordingly, the Grounds of appeal No. 2 & 3 raised by the assessee are allowed.

Second issue raised by the assessee in Grounds of appeal Nos. 4 to 6 is with respect to the addition of INR 14 Lakhs of cash deposited in SBN in his bank account.

With respect to the availability of the cash, assessee has filed copy of cash book placed at pages 45 to 48 of Paper Book, as per which cash in SBN was available with the assessee when the same was deposited in the bank account. From the perusal of the said cash Page | 5

From the perusal of the cash book, it is observed that as on 01.01.2017 i.e. after the demonetization period, assessee has cash balance of INR 13,70,065/- and during the period of demonetization, cash in SBN of INR 14 Lakhs was deposited in bank. It is further observed that assessee has withdrawn cash in new currency in the month of November and December, 2016 of INR 1,30,000/-. It is hardly to believe that the cash in hand as at 01.01.2017 of INR 12,40,065/- excluding new currency of INR 1,30,000/- withdrawn was of the currency notes other than SBN. It appears that assessee in the cash book taken the opening balance of INR 21,84,365/- without any basis since he was maintaining regular books of accounts nor statutorily required to maintain the same. Claim of the assessee that cash was kept by him due to fear of attachment on account of Court cases pending, but the assessee was acquiring the immovable property in his name of around INR 3.00 crores thus such claim appears to be contradictory. This clearly shows that cash book prepared by the assessee was without any basis and to justify the availability of the cash. Thus, no credit could be allowed for the opening cash balance as claimed by the assessee.

Under these circumstances, out of total cash withdrawal made of INR 9,20,200/- upto 08.11.2026, as reduced by cash re-deposited of INR 4,39,500/-, the remaining amount of INR 4,86,700/- could be treated as cash available in SBN with assessee which was deposited during the demonetization period thus, we delete the addition of Rs. 4,85,700/- and the remaining addition of INR 9,19,300/- is hereby, upheld. The grounds of appeal No. 4 to 6 are pertly allowed.

The remaining Grounds of appeal are general in nature.

In the result, appeal of the assessee is partly allowed. Order pronounced in the open Court on 15.05.2026.