DAI CHAND,KAITHAL vs. INCOME TAX OFFICER, KAITHAL

That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in charging interest u/s 234A and 234B of the Income Tax Act, 1961.

Brief facts of the case are that the assessee had filed his return of income declaring a small taxable income. During the scrutiny assessment, the Assessing Officer noticed cash deposits aggregating to Rs.45,82,500/- in the bank account of the assessee. When called upon to explain, the assessee submitted that the deposits represented part of the consideration received from the sale of ancestral agricultural land. It was contended that the sale deed clearly recorded that the assessee had received Rs.55,00,000/- in cash from the purchaser. 2.1 The Assessing Officer, however, was not satisfied. In the absence of independent verification of the sale deed and considering that the assessee had failed to establish a direct nexus between the deposits and the land sale, the AO treated the sum of Rs.45,82,500/- as unexplained income under section 69A of the Act.

Aggrieved, the assessee carried the matter before the CIT(A). The learned CIT(A), after considering the submissions, observed that the assessee had not furnished cogent evidence before the Assessing Officer to establish that the bank deposits were out of land-sale consideration. The CIT(A) was of the view that the mere assertion of receipt of cash would not suffice unless substantiated with reliable documentation and verification. Accordingly, the addition made by the Assessing Officer was confirmed.

Against the order of the Ld. CIT(A) the assessee preferred an appeal before the Tribunal.

Before us, the Ld. AR reiterated that the registered sale deed categorically records receipt of Rs.55,00,000/- in cash by the assessee. It was argued that once a registered instrument evidences receipt of sale consideration, the source of deposits is explained.