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Facts
The assessee, an agriculturist who did not file a return, deposited Rs. 67,90,000 in his bank account. He claimed this was from his father's sale of agricultural land, providing his father's affidavit and sale deeds as additional evidence. The Assessing Officer (AO) and Commissioner of Income Tax (Appeals) (CIT(A)) confirmed the addition of this amount as unexplained money under Section 69A.
Held
The Tribunal held that the AO failed to examine the documents and affidavits in the correct perspective and the CIT(A) wrongly upheld the AO's order. The Tribunal set aside the order and remanded the matter back to the AO for re-examination after evaluating the additional evidence.
Key Issues
Whether the CIT(A) erred by confirming the addition of unexplained cash deposits without properly adjudicating on the additional evidence provided by the assessee and without giving the AO an opportunity to examine it.
Sections Cited
69A, 144, 133(6), 46A(1)(b)
AI-generated summary — verify with the full judgment below
Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 21/02/2024 pertaining to Assessment Year 2012-13. 2. In the present appeal Assessee has raised the following grounds:
1 On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeal) while referring to the provisions of section 69A of the Income Tax Act, 1961 has erred in confirming the addition of Rs.67,90,000/- made by the Assessing Officer as unexplained money found in possession of the appellant in his bank account whereas the appellant has specifically filed a disclaimer during appellate proceedings that cash found in his bank account does not belong to him and that it was his father who deposited the money in appellant's bank account after selling his land.
That the appellate order passed by the Ld. CIT(A) is perverse to the law and to the facts of the case, thereby not adjudicating upon the additional evidence of sale deeds of land executed by his father along with his affidavit and of his brothers under Rule-46A(1)(b) of the Income Tax Rules, 1962 on 17.01.2021 and again on 10.10.2023 thereby reconciling the cash deposit of Rs.67,90,000/- in his bank account. The Ld. CIT(A) has erred in law in confirming the addition without allowing an opportunity to the Assessing Officer to examine the documents and to produce any evidence to the contrary nor examined the additional evidence himself.
Briefly the facts of the case are that the assessee is an agriculturist. He did not file his return of income for the year under consideration. His case was 2 reopened to verify the source of cash deposit of Rs.2,03,70,000 and time deposit of Rs.1,2 0,00,000 in his Canara Bank account. In response to a notice issued under section 133(6), the appellant vide his letter dated 19.03.2019 admitted that he is an agriculturist and is maintaining a bank account with Canara bank. In his letter he admitted that he deposited cash of Rs. 67,90,000 in his bank account and invested Rs.60,00,000 in time deposit out of agricultural income. However, he did not file any documentary evidence in support of his agricultural income. Accordingly, the assessing officer completed the assessment under the provisions of section 144 of the Income Tax Act, 1961 and charged the actual amount of cash deposit of Rs.67,90,000/- and accrued interest of Rs.1,81,326 on time deposit to tax.
3.1 It is also submitted that cash was deposited in bank account out of sale proceeds of agricultural land sold by Sh. Bhajan Singh, father of the appellant; however, no documentary evidence was furnished during assessment proceedings in this regard.
Against the order of the Ld. AO the assessee went in appeal before the Ld CIT(A) who has since dismissed the appeal of the Assessee by observing in para 5.4 to 5.8 which read as under:
5.4 The submissions made by the appellant have been duly considered. The appellant filed additional evidence in the form of affidavit from his father Mr. Bhajan Singh and requested to consider the same. The additional submissions filed by the appellant are admitted and considered in the interest of justice. 5.5 It is noticed that in the submissions filed, the appellant has claimed that the cash deposited in his bank accounts were cash received by his father on account sale of property. The appellant has submitted an affidavit from his father in this regard and also claimed that he is not the real owner of the cash and hence additions cannot be made in his case. It is also claimed that the provisions of Section 69A of the Act are not applicable this case as he is not the real owner of the case deposited. 5.6 The submissions filed by the appellant and the assessment order passed are duly considered. It is noticed that the additional evidence submitted during the assessment proceedings is only an affidavit from Mr. Bhajan Singh, who is the father of the appellant. The contents of the affidavit are not corroborated with any independent documentary evidence. The contents of the affidavit are a self serving document and cannot be relied in the absence of any other concrete evidence. The Appellants claim that he in not the real owner of the money is misplaced. It is not disputed that cash 3 amounting to Rs. 67,90,000/- were deposited in the bank account maintained and owned by the appellant, hence the onus is the appellant to satisfactorily explain the sources of cash deposits in his bank accounts. The case of the assessee is clearly hit by provisions of Section 69A of the Act, as the appellant is the owner of the bank account in which cash is deposited and failed to explain the sources of the same. The case law relied by the appellant are also found inapplicable as the appellant failed to justify his claim that the cash does not being to him. 5.7 In view of the above, I am of the considerate view that the sources and nature of cash deposits made remained un-explained. The A.O in the assessment proceedings gave sufficient opportunities to explain the sources of cash deposits made, however the appellant failed to justify the same. During the appellate proceedings as well, the appellate failed to explain the sources of cash deposits made by way of supporting evidences. Since, the appellant failed to explain the sources of cash deposits made, additions made in the assessment order are sustained. 5.8 Accordingly, the grounds of appeal raised by the appellant are dismissed.
5. Feeling aggrieved by the order of the Ld. CIT(A), the assessee came up in appeal before us.
During the course of hearing the assessee submitted that the cash deposited in his bank accounts were cash received by his father on account sale of property. The assessee has submitted an affidavit from his father in this regard and also claimed that he is not the real owner of the cash and hence additions cannot be made in his case. It is also claimed that the provisions of Section 69A of the Act are not applicable this case as he is not the real owner of the case deposited.
Per contra the Ld. DR has relied on the order passed by the Ld. CIT(A).
We have considered the rival submissions and perused the material available on the record. In the present case we find that the AO has failed to examine the documents and affidavits submitted by the assessee in right perspective. And we also find that the Ld. CIT(A) wrongly upheld the order of the AO. Therefore the order of the Ld. CIT(A) is set aside and the matter is remand back to the file of the AO with the direction to re-examine the case after evaluating the additional evidence. If the AO finds the explanation of assessee is satisfactory. Then the addition under Section 69A shall be 4 deleted. If not, a reasoned order must be passed addressing the evidence filed by the assessee, giving the reasons as to why 69A can be invoked.
The above noted exercise shall be carried out by the AO, after affording the opportunity of hearing to the assessee. Assessee is also directed to file all the evidence / documents at the earliest.
In the result, appeal of the Assessee is allowed for statistical purposes.