ANIL CHAUDHARY,GHAZIABAD vs. ITO, WARD-72(5), NEW DELHI

The assessee is mainly aggrieved by addition of Rs. 10,35,000/- made u/s 68 on account of amounts deposited in the saving bank account of mother of the assessee Smt. Nirmala Chaudhary. This is a second round of proceedings in pursuance of order dated 12.7.2013, where by the ITAT directed the AO to adjudicate the issue afresh on the issue of cash deposits. Relevant observation of the Tribunal reads as under:- “8. We have heard the Ld. Departmental Representative and have gone through the material placed on record. We· find that assessee only once appeared before the Ld. Assessing Officer and explained the source of deposit of cash from sale. of agricultural

land held by his mother. The Assessing Officer observed that sale consideration was received through cheques, therefore, cash deposit was not explained. On further inquiry by Ld. Assessing Officer regarding cash deposit, assessee did not appear despite various notices. The Assessing Officer then observed that as per sale deed the assessee had received sale consideration through cheques and, therefore, cash deposited in Dena Bank was not explained with the sale of agricultural land and, therefore, he made the addition. The Ld. CIT (A) without making a finding of fact and without finding cash element in the sale deed deleted the addition on the basis of computation of income of his mother where the sale of agricultural land was declared. However, the question remained unanswered as to whether sale deed contained certain cash component also or not. The Ld. CIT (A) has not considered this aspect. Therefore, in the interest of justice, we are of the opinion that the case of assessee be re-adjudicated by Assessing Officer. Needless to say that necessary opportunity will be given to assessee of being heard.”

In the first appellate proceedings Ld. CIT (A) too has confirmed the said addition holding that it has not been conclusively prove that assessee’s mother has earned Rs. 31 lacs from the sale of the land and from that source sum of Rs.10 lac was deposited which is not disclosed in the sale deed. Assessee being the first holder in joint account, the onus was upon the assessee to prove the cash deposit in the account.

Before us Ld. Counsel submitted that, first of all assessee’ mother is separately assessed to tax having PAN and before the authorities below she has filed a confirmation that she had sold agricultural land belonging to her father and received money from sale of cash which has been deposited to joint account in the bank wherein she has joint account holder of her son. She has also filed an affidavit deposing on oath the said transaction. Further, in support the copy of her income tax return was filed and our attention was drawn towards her bank account in Dena Bank and Nainital Bank, wherein sale proceeds of land has been deposited in her various bank accounts. Further in support, he has drawn our attention to all her bank statements wherein similar cash has been deposited in March, 2008. Thus, no addition could have been made in the hands of the assessee. Further assessee had also filed a valuation report wherein the fair market value of the land sold has been valued at Rs. 40 lacs admeasuring 641.26 sq. mt. and once it has been stated by assessee’s mother that she has sold land for Rs. 31 lacs and also produced entire passbooks, then no addition should have been made in the case of the assessee.

On the other hand Ld. DR strongly relied upon the order of the Ld. CIT (A).

From the perusal of the relevant findings given in the impugned orders as well as material referred to before me at the time of hearing, I find that right from first stage itself, assessee has been contending that the cash deposited in the bank account was from the sale proceeds of land sold by his mother which belonged to her by way of inheritance and is separately assessed to tax. She has duly given her confirmation to the AO along with sworn affidavit clearly stating that all the transactions during the period 1.4.2007 to 31.3.2008 belongs to her and does not have any relation with her son. She sold a piece of land inherited by her from her father which she deposited in various bank accounts details of which are as under :-