CIT vs. DHARAM PAL BINDAL

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ITA - 950 / 2011HC Delhi11 August 20111 pages
For Petitioner: ABHISHEK MARATHA
AI SummaryDismissed

What did the High Court hold?

The High Court held that the CIT(A) and ITAT had made pure findings of fact. These authorities accepted the assessee's explanation that the cash deposits were his own funds, withdrawn from his bank account for the purchase of immovable property, and subsequently redeposited when the deal did not materialize. The Tribunal's finding was that each deposit was preceded by one or more withdrawals of equal or greater amounts, which were sufficient to explain the deposits. Since these were pure findings of fact, no question of law arose for consideration under Section 260A of the Income-Tax Act, 1961. Therefore, the appeal filed by the Revenue was dismissed.

What were the facts?

The Assessing Officer (AO) initiated reassessment proceedings under Section 147 of the Income-Tax Act, 1961, for assessment year 2005-06. The AO noted that the assessee deposited ₹37,30,000 in cash into his Savings Bank Account with Canara Bank during the financial year, which he believed had escaped assessment. The assessee contended that the amount was his own, withdrawn from his bank account for the purchase of immovable property. As the deal did not materialize, he redeposited the funds. The AO, however, did not accept this explanation for deposits totaling ₹30,01,452 and made an addition under Section 68 as unexplained cash credit. The CIT(A) and ITAT deleted this addition, accepting the assessee's explanation.

What were the issues?

1. Whether the High Court should entertain an appeal on a question of law when the lower authorities (CIT(A) and ITAT) have made pure findings of fact regarding the explanation of cash deposits, as per Section 260A of the Income-Tax Act, 1961. Assessee's Contention: The assessee argued that the deposits were his own funds, withdrawn for a property purchase that did not materialize, and subsequently redeposited. The lower authorities accepted this explanation, finding that each deposit was preceded by withdrawals of equal or greater amounts, which were sufficient to explain the deposits. Revenue's Contention: The revenue contended that the deposits were unexplained cash credits and therefore liable for addition to the assessee's income under Section 68. The AO did not accept the assessee's explanation for the deposits totaling ₹30,01,452.

Which sections of the Income-tax Act were involved?

Section 147,Section 68,Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . 11.08.2011 . Present: Mr. Abhishek Maratha, Sr. Standing Counsel for the Revenue. . + ITA 950/2011 . The Assessing Officer had reopened the assessment proceedings while initiating action under Section 147 of the Income-Tax Act in respect of the assessment year 2005-06 on the ground that the assessee had deposited the amount of `37,30,000/- in cash in his Saving Bank Account with Canara Bank from time to time in the said financial year relevant to assessment year 2005-06 and according to the Assessing Officer had escaped assessment. The assessee explained that the aforesaid amount belonged to him only. He had withdrawn the same from his bank account for the purchase of some immovable property and since the deal did not materialize, he had deposited the amount back. The Assessing Officer did not accept the aforesaid explanation qua deposits in the sum of ` 30,01,452/- and made addition of that amount to the income of the assessee under Section 68 of the Act as unexplained cash credi t. The CIT (A) as well as ITAT have deleted the said addition accepting the explanation of the assessee and giving a finding of fact that the assessee was right in contending that he intend to purchase the property for which the amounts were withdrawn. It is also recorded by these authorities below that each deposit is preceded by one or more withdrawals of equal or more amounts and decision are taken depending upon the requirement. The aforesaid withdrawals were sufficient to explain the deposits. These are pure findings of fact and no question of law arises. The appeal is accordingly dismissed. . . A.K. SIKRI, J. . M.L. MEHTA, J. AUGUST 11, 2011 skb . 3#

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