Loading judgment…
Facts
The assessee, an agriculturist, had cash deposits in his bank account which were treated as income from undisclosed sources. The assessment was reopened under Section 147 of the Act. The assessee claimed these were redeposits of previously withdrawn amounts.
Held
The Tribunal held that the bank statements, though initially claimed as unreadable by the revenue, were indeed understandable and explained the source of deposits. The assessee had provided sufficient evidence regarding the withdrawals and redeposits.
Key Issues
Whether cash deposits in the assessee's bank account represented income from undisclosed sources when the assessee provided bank statements explaining the same as redeposits of withdrawn funds.
Sections Cited
147, 148, 142(1), 144
AI-generated summary — verify with the full judgment below
Order This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), NFAC, dated 18.09.2023, for the assessment year 2011-12.
Background The assessee is an agriculturist and an illiterate person residing in a remote village. The assessment was reopened under section 147 of the Act. During assessment proceedings, the Assessing Officer noticed cash deposits of ₹25,25,000/- in the assessee’s bank account with Sarva Haryana Gramin Bank. Since the assessee did not comply with notices issued under sections 148 and 142(1) of the Act, the assessment was completed ex-parte u/s 144 treating the cash deposits as income from undisclosed sources. The CIT(A), NFAC, confirmed the addition for want of verifiable evidence.
Submissions of the Assessee 3.1 The learned Authorised Representative (AR) submitted that the cash deposits in the Sarva Haryana Gramin Bank were not income but redeposits of cash withdrawn from the assessee’s own bank accounts. It was submitted that the assessee had withdrawn ₹36,00,000/- from his SBI account on 10.04.2010, out of which ₹20,40,000/- was deposited on 15.04.2010 into the Sarva Haryana Gramin Bank. Similarly, further withdrawals of ₹12,00,000/- were made in February 2011, and part thereof was redeposited as ₹3,40,000/- and ₹1,45,000/- on 24.02.2011 and 11.03.2011, respectively.
3.2 It was further argued that the assessee had filed bank statements evidencing the above withdrawals and deposits. However, being an agriculturist and an illiterate person, and due to the difficulties faced during the COVID-19 pandemic, the assessee was unable to present certified copies of accounts or pursue hearings before the NFAC properly. It was thus pleaded that in the interest of natural justice, the matter may be remanded to the Assessing Officer for verification of the bank statements.
Submissions of the Revenue (DR)
4.1 The learned Departmental Representative (DR), on the other hand, supported the orders of the lower authorities. It was submitted that despite repeated opportunities before the Assessing Officer and the NFAC, the assessee did not furnish legible certified copies of the bank accounts or any corroborative evidence regarding the receipt of compensation from HUDA on account of land acquisition.
4.2 The DR submitted that the pandemic situation of COVID- 19 cannot be taken as a blanket excuse, since the assessee was given notices both prior to and after that period through electronic mode. It was contended that the assessee’s conduct shows negligence in compliance and therefore the addition sustained by the CIT(A) requires no interference.
Findings and Decision
I have considered the rival submissions and perused the material available on record. Upon reviewing the copies of the bank statements, which are available at pages 27 to 30, it is obviously clearly that the amount of Rs. 36,38,041/- were credited in the bank account on 9.2.2010 on maturity of the FDR. Thereafter, the Assessee had withdrawn the amount of Rs. 36,00,000/- from the account on maturity of FDR. The Assessee, had thereafter deposited the amount of Rs. 20 lacs into his bank account at Sarva Haryana Gramin Bank account on 15.4.2010. Similarly, the Assessee had also deposited the amount of Rs. 3,40,000/- on 24.2.2011 and Rs. 1,15,000/- on 11.3.2011. Thus, from the bare perusal of the bank statements which are available on record, (albite) as per Revenue, this bank statements were not readable, it is clear that the Assessee had explained the source of the investment / deposit made in his account to my satisfaction. In view of the above, no addition can be made in the hands of the Assessee. With respect to the documents not considered by the Revenue as mentioned herein above, these documents are readable without any effort’s and, therefore, this ground for rejecting the bank statements is without any basis. Furthermore, this very bank statements were available with the Assessing Officer and on the basis of these bank statements only, the Assessee officer has made the additions in the hands of the Assessee. In view of the above, the lower authorities have erred in making the addition in the hands of the Assessee. Further, the so-called failure to produce the evidence of receiving the compensation from HUDA has no significance as the receipts are very much after in the bank account of the Assessee showing receipts of the amounts from m the HUDA. In the light of the above, I do not find any reason to sustain the order passed by the Ld. CIT(A). Accordingly, the order passed by the Ld. CIT(A) is reversed and the additions made by the AO and confirmed by CIT(A) are deleted.