Loading judgment…
Facts
The assessee, an 80-year-old agriculturist, sold agricultural land on two occasions, receiving one payment through banking channels and the other in cash. Due to the demonetization scheme, he deposited all his cash, including the sale proceeds, into a newly opened bank account. The Assessing Officer added the cash deposits to the assessee's income.
Held
The Tribunal held that the assessee, being an old agriculturist with no prior banking experience, had sufficiently explained the source of the deposits. The cash was explained by the sale of agricultural land and past savings, and the deposit was made due to the demonetization policy.
Key Issues
Whether the addition of cash deposits made in the bank account during the demonetization period was justified when the source of the cash was explained as sale proceeds of agricultural land and past savings.
Sections Cited
Section 250 of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PATNA “SMC” BENCH, VIRTUAL HEARING AT KOLKATA
Before: SRI SANJAY GARG
order : 13.02.2025 ORDER The captioned appeal has been preferred by the assessee against the order dated 29.07.2024 of the Ld. Commissioner of Income Tax (Appeal), National Faceless Appeal Centre, Delhi [hereinafter referred to as Ld. ‘CIT(A)’] u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for Assessment Year (AY) 2017-18.
The assessee in this appeal is aggrieved by the action of the Ld. CIT(A) in confirming the addition of Rs.10,75,000/- made by the Assessing Officer on account of unexplained cash deposits in the bank account of the assessee during demonetization period.
At the outset, the Ld. Counsel for the assessee has invited my attention to copies of two registered sale deeds dated 24.05.2016 and 09.07.2016. The Ld. Counsel for the assessee has demonstrated that vide sale deed dated 24.05.2016, the assessee had sold his agricultural land for Rs.3,36,000/-. Further, vide sale deed dated 09.07.2016, the assessee had received a sum of Rs.6,26,000/- for sale of his agricultural land. The Ld. Counsel for the I.T.A. No.: 604/PAT/2024 Shankar Singh, AY : 2017-18 assessee has submitted that though the amount of Rs.3,36,000/- was received through banking channel, however, the amount of Rs.6,26,000/- was received in cash as mentioned in sale deed. The Ld. Counsel for the assessee has further submitted that the assessee is 80 years old agriculturist and did not do financial transactions through banks etc. That he used to keep his cash at his home. However, due to demonetization scheme declared by the Government, the assessee was forced to deposit his cash in the bank account and, therefore, he opened his bank account in the month of November, 2016 and deposited the entire cash lying with him in the bank account including the aforesaid amount received from sale of agricultural land and also a meagre amount of Rs. 1 lac lying with him out of his past savings.
The Ld. DR, however, submitted that there is a time gap between the receipt of the amount from sale of land and the deposit of the amount in the bank account.
I have considered the rival submissions. In my view, the assessee has duly explained the source of the deposit in the bank account. It has also been explained that the assessee is a rural, 80 years old, agriculturist and was not having any bank account. Under the circumstances, I am convinced that the assessee has duly explained the source of deposit, therefore, the additions made by the lower authorities in this case are unjustified and the same are accordingly ordered to be deleted.
In the result, the appeal of the assessee stands allowed.