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Facts
The Assessing Officer made an addition of Rs. 11,38,000/- to the assessee's income, comprising Rs. 8,00,000/- by cheque and Rs. 3,38,000/- in cash, alleging unexplained payments to a builder. The CIT(A) upheld this addition, finding the sources of payment unsatisfactorily explained. The assessee argued the cash payment was from domestic savings, wife's pin money, and contributions from parents/relatives.
Held
The Tribunal noted that the cheque payments were not in dispute. Regarding the Rs. 3,38,000/- cash payment, considering its diminutive nature and the specific circumstances presented, the Tribunal ruled that the addition made by the Assessing Officer was not justified and should be deleted.
Key Issues
Whether the addition of Rs. 3,38,000/- made by the Assessing Officer under Section 69 for unexplained cash payment to a builder was justified, and whether the consequential interest and penalty charges were valid.
Sections Cited
69, 234A, 234B, 234C, 234D, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
1. This appeal is filed by the Assessee against the appellate order dated 19.03.2025 passed by the Commissioner of Income Tax (Appeals)National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2011-12.
The assessee has raised the followings grounds of appeal:
The order passed by the lower authorities is bad in law and required to be quashed.
Asst. Year : 2011-12 - 2– 2. Ld.JCIT(A) erred in law and on facts in confirming action of AO of reopening of Assessment.
3. Ld.JCIT(A) erred in law and on facts in making addition of Rs.11,38,000/- by invoking section 69 ignoring submission of the appellant.
4. Both lower authorities erred in proceeding without providing material relied on and consequential cross examination.
Both lower authorities ought to have consider the fact that mere declaration before settlement commission by builder/developer without any tangible evidence does not warrants any addition.
Charging of interest u/s.234A, 234B, 234C, 234D are unjustified.
Initiation of penalty u/s. 271(1)(c) of the Act is unjustified.
From the records, we find that the Assessing Officer made an addition of Rs.11,38,000/–, being the amount paid by the assessee to the builder of Rs.8,00,000/– by cheque and Rs.3,38,000/– in cash. The Ld. CIT(A) affirmed the action of the Assessing Officer by holding that the sources of the payments had not been satisfactorily explained. On perusal of the material available before us, it is noted that the assessee had paid Rs.4,00,000/– to Dharamdev Infrastructure Limited vide cheque no. 222361 dated 17.12.2010, and an equivalent amount of Rs.4,00,000/– vide cheque no. 222362 dated 15.01.2011. The sources of these cheque payments are not in dispute, leaving only the cash payment of Rs.3,38,000/– to be examined. Before us, the assessee explained that the said cash payment was made out of domestic savings, the pin money of the wife, and small contributions received from parents and relatives. Considering the absoluteness and diminutive nature of the cash amount involved, and in view of the specific circumstances of the case, we are of the opinion that the
In the result, the appeal of the assessee is allowed.