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Facts
The assessee appealed against an addition of Rs. 8 lakhs to income for unexplained cash deposits under section 68, and a penalty of Rs. 9.5 lakhs under section 271D for allegedly violating section 269SS by accepting cash loans. The assessee contended that the cash, received from a relative (Shri Bhoop Singh) who was a co-executor of a sale deed, represented his share of cash sale consideration from that deed.
Held
The Tribunal condoned the delay in filing the appeals. It held that the lower authorities erred in sustaining the addition of Rs. 8 lakhs, finding the assessee's explanation of receiving cash sale consideration plausible. Consequently, the penalty of Rs. 9.5 lakhs levied under section 271D was also deleted, as the amount was deemed cash sale consideration and not a loan, thus not violating section 269SS.
Key Issues
Whether cash deposits representing sale consideration can be treated as unexplained cash credits under Section 68 and whether penalty under Section 271D for violation of Section 269SS is attracted for such transactions.
Sections Cited
Section 68, Section 143(3), Section 147, Section 148, Section 269SS, Section 271D
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
O R D E R PER SATBEER SINGH GODARA, JM: These assessee’s twin appeals & 121/Del/2023 for assessment year 2010-11 arise against Commissioner of Income-tax Appeals)-1, & Commissioner of Income-tax Appeals)-2,Gurgaon’s as many orders dated 31.05.2019 & 31.01.2019 passed in case nos. 111/2018-19 & 429/17-18, in proceedings u/s 271D and 143(3) read with section 147 of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
Heard both the parties at length. Case files perused.
Delay of 1269 and 1389 days in filing of the instant twin appeals is condoned as per the assessee’s condonation averments and keeping in mind the fact that the same also include time period from 15.3.2020 to 19.10.2020 , which has already been directed to be excluded for all purposes by the hon’ble apex court in its land mark decision in Cognizance For Extension Of Limitation, In re. (2022) 441 ITR 722 (SC).
I now proceed to deal with the relevant facts wherein the assessee is aggrieved in quantum appeal that both the learned lower authorities have erred in law and on facts in taking recourse to section 148/147 proceedings, thereby treating cash deposits of Rs. 8,00,000/- deposited in his bank account as unexplained u/s 68 of the Act. The penalty appeal 271D penalty of Rs. 9.50 lakhs on the ground that he had violated section 269SS of the Act in accepting cash loans.
Both the parties could hardly dispute the clinching fact that the entire issue has arisen on account of the assessee having claimed to have availed cash loans of Rs. 17.50 lakhs from one Shri Bhoop singh. There is no denial to the fact that the said person had duly put in appearance during scrutiny and deposed in assessee’s favour to have given the entire amount of Rs. 17.50 lakhs, which stood restricted to Rs. 9.5 lakhs only on the ground that his share in the sale deed could prove only 9.5 lakhs. I note in this factual backdrop that the said person had co-executed the sale document and both of them received cash sale consideration amounting to Rs. 17.50 lakhs, which in turn, was stated to be given to his relative i.e. the assessee. All these facts sufficiently indicate that both the lower authorities have rejected the assessee’s foregoing explanation going by the said relative’s share only than the entire explanation which had to be considered in the light of given probabilities and the relation between the parties. I, thus, see no reason to sustain the impugned addition of Rs. 8 lakhs in assessee’s quantum appeal ITA no. 121/Del/2023. This appeal succeeds in very terms.
Coming to the assessee’s penalty appeal 271D penalty of Rs. 9.5 lakhs representing cash loans from one Shri Bhoop singh, I find that the same represents cash sale consideration and, therefore, it would not attract violation of section 269SS of the Act, deleted accordingly. This appeal is accepted.
No other ground or argument has been pressed. Copy of this common order be placed in respective case files. Order pronounced in open court on 29.11.2024