BALRAM DAHIYA,GURGAON vs. ITO WARD - 1(3), GURGAON

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ITA 3979/DEL/2019Status: DisposedITAT Delhi31 January 2022AY 2011-125 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the authorities below did not consider the assessee's contention of receiving a gift from his father who sold agricultural land. The Assessing Officer also did not present any contrary material. Therefore, the Tribunal directed the Assessing Officer to delete the addition.

What were the facts?

The assessee deposited Rs. 13,59,000/- in cash into his bank account. The Assessing Officer made an addition of Rs. 7,59,000/- as unexplained cash credit. The CIT(A) partly allowed the appeal, reducing the addition by Rs. 3,00,000/-.

What were the issues?

Whether the addition made under Section 68 for cash deposits in the bank account was justified, considering the assessee's explanation of receiving a gift and the applicability of the peak credit theory.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI

Before: SHRI KUL BHARAT

For Respondent: Shri Om Parkash, Sr.DR
Hearing: 20.01.2022Pronounced: 31.01.2022

ORDER PER KUL BHARAT, JM :

This appeal filed by the assessee for the assessment year 2011-12 is directed against the order of Ld. CIT(A)-1, Gurgaon dated 12.02.2019. The assessee has raised following grounds of appeal:-

1.

“That the Ld. CIT(Appeals) order is bad in law as well as on the facts and circumstances of the case.

2. That the Ld. CIT(Appeals) has erred in law as well as on the facts by confirming the addition of income of Rs 4,59,000/- out of Rs 7,59,000/- being cash deposited in the bank account of the appellant for which addition under section 68 of the Act was made by the AO. He ought to have applied peak credit theory based on the facts and circumstances of the case.

3. That the Ld CIT(Appeals) has erred in law in confirming the addition to the tune of Rs/4,59,000/- without accepting the explanation of the appellant and without finding anything contrary to the various judicial pronouncements relied upon by the appellant.

4. That the Ld CIT(Appeals) has erred in law in confirming the addition only on surmises and conjectures contrary to the evidence on record. 5. That the Ld CIT(Appeals) has erred in law by granting partial relief against the additions made by AO as appellant had already offered detailed explanations and gift affidavits explaining the source of peak credit balance which were accepted by the AO and now there was nothing left to be added as unexplained cash credit u/s 68 of the Act. 6. That the appellant has every right to make, add, delete, modify or alter any ground of appeal at the time of hearing.”

2.

At the time of hearing, no one appeared on behalf of the assessee. The notice sent by speed post was duly served upon the assessee as the acknowledgement due is on record. Therefore, the appeal is taken up for hearing in the absence of the assessee.

3.

Facts giving rise to the present appeal in this case are that the assessment was re-opened and notice u/s 148 of the Income Tax Act, 1961 (“the Act”) was issued on 16.03.2018 and duly served upon the assessee. In response to the same, the assessee filed return of income for Assessment Year 2011-12 on 02.11.2018 declaring an income of Rs.3,74,470/-. During the course of assessment, the assessee was asked to explain the source of cash deposit of Rs.13,59,000/- in his bank account maintained with Oriental Bank of Commerce (“OBC”) during the year under consideration. In response to the same, the assessee filed his reply. It was stated before the Assessing Officer Page | 2 that out of cash deposited of Rs.9 Lakhs was received as a gift from his father who had sold an agricultural land. The Assessing Officer asked to file cash flow statement. In response thereto, the assessee furnished the cash flow statement. However, the Assessing Officer after considering the reply, made addition of Rs.7,59,000/-.

4.

Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, partly allowed the appeal and reduced the addition by Rs.3 Lakhs.

5.

Aggrieved against this, the assessee preferred appeal before this Tribunal.

6.

Ld. Sr. DR supported the order of Ld.CIT(A) and submitted that Ld.CIT(A) has justifiably reduced the addition by considering the submissions of the assessee.

7.

I have heard the Ld. Sr. DR and perused the material available on record and gone through the orders of the authorities below. Before Ld.CIT(A), it was stated that maximum peak balance credit in the bank account of the assessee during the year was Rs.4,18,870/- and since the assessee had offered explanation and filed affidavit explaining the source of cash credit, nothing left to the Revenue to prove the fact that Rs.7,59,000/- remained explained. I find that Ld.CIT(A) has partly decided the issue in favour of the assessee by observing as under:-

3.3. “I have carefully considered the submission of the appellant. I have also perused documents filed by the appellant. As per the cash flow statement filed by the appellant it is seen that there were large number of cash withdrawals and cash deposits in the bank account. The appellant has contended the cash deposits were partly made from amounts withdrawn from the bank. The A.O has rejected this contention on the ground that the cash withdrawn are very small in amounts and do not justify the availability of cash in the hands of appellant. Perusal of the documents filed by the appellant reveals that there is a cash withdrawal of Rs.l,85,000/- on 26.10.2010. The availability of this amount for subsequent cash deposit cannot be denied as there is no evidence of the appellant having used this amount. Further, keeping in view the facts that the appellant is a salaried employee working as a teacher, some amount of savings can be accepted. In the given facts and circumstances I deem it fair and reasonable to estimate the availability of cash amounting to Rs. 3,00,000/- from cash withdrawal of Rs. 1,85,000/- and family savings, which amount could have been deposited by the appellant in the bank account.”

8.

I find that the authorities below have not considered the contention of the assessee that he had received gift from his father who had sold agricultural land. Moreover, the Assessing Officer has not brought any contrary material refuting the claim of the assessee that he received gift from his father who had sold agricultural land in the month of April, 2011 located in Budhera, Gurgaon. Therefore, considering the material available on record and finding of the authorities below, I hereby direct the Assessing Officer to delete the addition. Thus, grounds raised by the assessee are allowed.

9.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open Court on 31st January, 2022.

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