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Facts
The appellant deposited Rs. 14,00,000/- in cash during the demonetisation period, claiming it was derived from rental income and repayment of a loan from Mr. V.K. Nazir. The AO made an addition of Rs. 6,97,244/- as unexplained money, which the CIT(A) confirmed, disbelieving the appellant's explanations regarding both sources.
Held
The Tribunal found no material on record to rebut the assessee's explanation for the cash deposits. It concluded that the lower authorities should have accepted the explanation and treated the entire cash deposits as explained, thereby directing the AO to delete the addition of Rs. 6,97,244/-.
Key Issues
Whether the CIT(A) was justified in confirming the addition of unexplained cash deposits made during demonetisation, despite the assessee's explanation of cash rental income and loan repayment.
Sections Cited
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 27.11.2024 for Assessment Year (AY) 2017-18.
Brief facts of the case are that the appellant is an individual. The return of income for AY 2017-18 was filed on 20.07.2017 declaring total income of Rs. 8,93,450/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-2(3), Kozhikode (hereinafter called "the AO") vide order dated 04.12.2019at a total income of Rs. 15,90,690/-. While doing so, the AO made addition of Rs. 6,97,244/- being the amount of cash deposited in bank during
During demonetisation period the appellant made cash deposit in South Indian Bank Ltd., Kasaragod of Rs. 12,00,000/- on 14.11.2016 and also deposited Rs. 2,00,000/- with HFC Bank Ltd., Kasaragod. The appellant submitted that the appellant received a total rent of Rs. 81,25,810/- out of which a sum of Rs. 74,23,054/- was subject to TDS. The AO presumed that the income which is subject to rental was received through cheque. Thus, only an amount of Rs. 7,02,756/- was considered as explained and the balance of Rs. 6,97,244/- was brought to tax.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO holding that the appellant had failed to substantiate with evidence that the appellant received rent amount of Rs. 15,50,110/- in cash. The CIT(A) also disbelieved the explanation that the amount of Rs. 9,00,000/- was received from Mr. V.K. Nazir as repayment of loan.
Being aggrieved, the appellant is in appeal before us in the present appeal.
When the appeal was called nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, we proceeded to dispose of the appeal after hearing the learned Sr. DR.
The issue in the present appeal is whether the CIT(A) was justified in confirming the addition of cash deposit made during demonetisation period. During the demonetisation period the appellant made total cash Sameer Moidu deposit of Rs. 14,00,000/- in the specified bank notes out of which the AO has accepted the explanation with regard to the amount of Rs. 7,02,756/- and the balance was brought to tax as unexplained money of the appellant. The appellant offered a explanation in respect of the cash deposit, stating that the appellant received the rental income in cash of Rs. 15,58,110/- and the same was deposited in the bank account. It was further stated that the loan of Rs. 9,00,000/- was repaid by one Mr. V.K. Nazir. There is no material brought on record to rebut the explanation of the assessee. In the circumstances the lower authorities should have accepted the explanation and treated the entire cash deposits as explained. Therefore, I direct the AO to delete the addition of Rs. 6,97,244/-.
In the result, the appeal filed by the assessee stands allowed.
Order pronounced in the open court on 10th February, 2025. 9.