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Facts
The assessee, an individual trading coconuts, purchased a property for Rs. 11,00,000 and paid Rs. 9,00,000 as a cash advance in AY 2018-19. The AO reopened the assessment under Section 148 and added Rs. 9,00,000 under Section 69, which the CIT(A) reduced to Rs. 8,00,000, accepting only Rs. 1,00,000 of the assessee's explanation (past savings, wife's salary, parents' money).
Held
The Tribunal found that the assessee, a long-time coconut trader, could explain Rs. 4,50,000 of the cash advance from business savings, despite being a non-filer of income tax returns. However, the claim of receiving money from his wife and parents was unsubstantiated due to lack of evidence. Consequently, the Tribunal reduced the addition from Rs. 8,00,000 (confirmed by CIT(A)) to Rs. 4,50,000.
Key Issues
Whether the addition made under Section 69 for unexplained cash advance for property purchase was justified, considering the assessee's business savings and unsubstantiated claims of loans from family.
Sections Cited
147, 144, 144B, 148, 69
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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2018-19 arises out of the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 08.08.2024 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s 144 r.w.s 144B of the Income-tax Act, 1961 (hereinafter “the Act”) on 26.03.2023.
There is a delay of 09 days in filing the appeal by the assessee.
The assessee has filed condonation petition/ stating the reasons for delay in filing the appeal. We have considered the petition/affidavit of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is hereby condoned.
The only ground of appeal in this appeal of assessee is against confirming the addition of Rs.8,00,000/- in respect of purchase of immovable property in cash.
The assessee is an individual engaged in the business of buying and selling of Coconut. The assessee has purchased a property for a sum of Rs. 11,00,000/- on 27.10.2017 and has paid an advance of Rs. 9,00,000/- in cash . Assessee has not filled return of income, therefore the A.O. reopened assessment by issuing notice u/s 148. In response to notice u/s. 148 of the Act, the assessee filed return of income by admitting total income of Rs. 2,99,560/-. The assessee , during assessment proceeding has explained the source of cash for making advance as a saving from business for past six years.
However, the A.O did not accept the assessee’s explanation and made addition of Rs. 9 Lakhs u/s. 69 of the Act. The assessee before the Ld. CIT(A) has explained the source of advance of Rs. 9,00,000/- as past savings, salary from his wife and money given by the parents.
The Ld. CIT(A) accepted the explanation to the extent of Rs. 1,00,000/- and confirmed addition of Rs. 8,00,000/- Lakhs.
The Ld. Authorized Representative (A.R) of the assessee before us has submitted income tax computation from 2011-12 to 2017-18 and cash flow statement explaining the source of cash from his business income and amounts given by wife and parents. The assessee has submitted his net income from buying and selling of coconut as under:
S.No. Previous Assessment Net Income year Year (Profit) as per profit and loss a/c. 1 2011-12 2012-13 1,47,000 2 2012-13 2013-14 1,73,000 3 2013-14 2014-15 1,71,000 4 2014-15 2015-16 2,19,000 5 2015-16 2016-17 1,95,000 6 2016-17 2017-18 2,07,000 7 2017-18 2018-19 2,99,560
As regard to source of cash deposit, the assessee has shown loans from his wife and parents.
The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities and argued that assessee has not submitted any documentary evidence to support his claim.
We have heard the rival submissions, and perused the materials available on record. The assessee has explained source of cash of Rs. 9,00,000/- to purchase the immovable property from his Coconut business and loan from wife and parents. We find that the assessee has been non filler of return of income and therefore, his explanation cannot be accepted in full. However, considering the fact that the assessee has been running business of buying and selling coconuts for long time, cash saving to the extent of Rs.4,50,000/- can be accepted. As of Ld AR’s submission about sum received from wife and parents, assessee has not been able to submit any evidence in support of the claim therefore, the same cannot be accepted. We accordingly sustain the addition to the extent of Rs 4,50,000 as against Rs 8,00,000 confirmed by the Ld CIT(A). In light of the above, the appeal filed the assessee is partly allowed.
In the result, the appeal filed the assessee is partly allowed. Order pronounced on 14th March, 2025.