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Facts
The assessee, Pankaj Kumar, did not file an income tax return for AY 2014-15. Information from AIR showed a cash deposit of Rs. 1,06,50,000/- and interest income of Rs. 94,094/- in his bank account. After reopening the assessment, the assessee claimed these deposits were his share of sale proceeds from ancestral property, but failed to provide satisfactory evidence to the AO and CIT(A), leading to an ex-parte assessment and dismissal of appeal by CIT(A).
Held
The Tribunal found the assessee's explanation regarding the source of cash deposits as sale proceeds of ancestral property to be unsubstantiated, noting the lack of proper documentation and confirmation from co-owners. The Tribunal set aside the order of the CIT(A) and remanded the case back to the Assessing Officer for reconsideration, directing to provide the assessee with another opportunity of being heard.
Key Issues
Whether the lower authorities were justified in making additions for an unsubstantiated cash deposit in the assessee's bank account and whether the assessee adequately explained the source of these deposits as sale proceeds of ancestral property.
Sections Cited
Section 250, Section 147, Section 148A(b), Section 142(1), Section 144, Section 148
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Income Tax Appellate Tribunal, : GAUHATI BENCH : GUWAHATI
Before: SHRI MANOMOHAN DAS, HON’BLE & SHRI SANJAY AWASTHI, HON’BLE
ORDER
PER MANOMOHAN DAS, JM
The assessee filed this appeal against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as the (“CIT(A)” dated 22.05.2025 passed under Section 250 of the Income Tax Act, 1961 Page 1 of 5 Pankaj Kumar-Vs- The ITO, Ward-1 (2), Guwahati AY: 2014-15 (hereinafter referred to as the ‘Act’) and pertains to the Assessment Year 2014-15.
The brief facts of the case are that, the assessee is an individual and not filed his return of income for AY 2014-15. As per the information available in AIR, it is noticed by the Assessing Officer that the assessee had deposited cash amounting to Rs. 1,06,50,000/- in his bank account and also earned interest income of Rs. 94,094/-. Since, the return of income for the relevant year was not furnished, the case was reopened after initiating proceedings u/s 147 of the Act after obtaining prior approval from the competent authority. Notice u/s 148A(b) of the Act was issued and served upon the assessee. The assessee, in response, filed the return of income on 14.04.2021 declaring total income at Rs. 2,93,590/-. During the course of assessment proceedings, the AO issued notice u/s 142(1) and show cause notice. However, the assessee failed to respond the same. The assessee did not furnish any details. Therefore, the AO completed the assessment u/s 144 of the Act by assessing the total income as Rs. 1,10,87,934/- thereby raising the tax demand of Rs. 1,00,75,680/-. Being aggrieved, the assessee filed 1st appeal before the ld.
CIT(A). The ld. CIT(A) vide order dated 22.05.2025 dismissed the appeal of the assessee.
Being aggrieved, the assessee filed the present appeal before the Tribunal.
The lower authorities have not satisfied on the explanation of the assessee that, the shares of the sale proceeds of the immovable properties have been handed over to the assessee for depositing in a separate bank account. The reason given by the ld. AO which is upheld by the ld. CIT(A) are as under: “ 6.2. Therefore, the logic behind that the shares are deposited in assessee’s bank account and that to a new account opened for the Page 2 of 5 Pankaj Kumar-Vs- The ITO, Ward-1 (2), Guwahati AY: 2014-15 purchase of new agricultural land is not accepted. In general practice, on the sale of ancestral properties, the sale consideration are deposited in their respective accounts of the co-owners. When all the co-owners were having bank accounts, the reason for opening a new bank account and to deposit that too in cash is found to be illogical and cannot be accepted in toto. 6.3 Further, after the cash deposit, assessee had converted the cash deposit into F.D. and earned interest too. As mentioned supra, no original return of income was furnished by the assessee. In the return of income filed in response to notice u/s 148 of the Act, assessee furnished return of income declaring salary income and assessee has also offered interest income of Rs. 94,094/-. If the cash deposit is not assessee’s then the F.D. should have been made in the name of his father and his three uncles. 6.4 On verification of the Bank account it is noticed that subsequently, the assessee was withdrawn the amount in cash. No details of the withdrawal were submitted. Assessee is also silent on the subsequent withdrawal made. Assessee did not furnish any proof regarding the alleged claim purchase of new agricultural land, for which the alleged bank new bank opened. No confirmation from his father or uncles were furnished. As mentioned supra, the immovable property is a capital asset, no details of capital gains, whether the capital gains are offered to tax by his father & uncles, copy of return of income filed, PAN etc. were furnished. No evidence / confirmation from the respective parties that the cash deposited in the PNB bank account is out of the sale consideration received from the sale of above referred lands. Without any supporting documents, merely submitting on the paper that the cash deposit is out of the sale consideration and that to of his father and uncles cannot be accepted. The onus is on the assessee to furnish all the details along with supporting evidences regarding the claim which he failed squarely.
Page 3 of 5 Pankaj Kumar-Vs- The ITO, Ward-1 (2), Guwahati AY: 2014-15 7. Again, the ld. CIT(A) observed that, the appellant has submitted the confirmation letter, PAN card copy, Aadhar card copy, bank statement and affidavits signed by his family members. The submissions made by the assessee during the course of appeal proceedings are only after thought. The assessee is trying to create evidences with the help of his family members. The assessee’s contention that he has nothing to do with the credits in his bank account is not acceptable since he was unable to substantiate any evidences as to why a new bank account was created and why the cash was deposited in the appellant’s account when all the co-owners have their individual bank accounts. In view of the above discussion the contention of the appellant is found not tenable. Hence, the ground of appeal is dismissed.
8. We observe that, the deposit of the cash amount which was the sale proceeds of the immovable properties in the new bank account of the assessee by the sellers of the properties is difficult to accept. The sellers of the properties can tell the truth.
9. Secondly, the copies of the sale deeds may not be treated that, the sellers were the owners of the properties. The title deeds of the properties may be required to be examined so as to ascertain who were / are the owners of the property. Further, whether the sellers of the properties are the legal heirs of the original owner (s) of the properties have to be considered. Here legal heirs certificate may be required if the sellers of the properties have sold their ancestral properties.
10. In view of these of our observations on the matter, we think it proper to remand the case to the ld. AO for reconsideration of his assessment order dated 21.03.2022 and for this purpose we set aside the order of the ld. CIT(A) dated 22.05.2025. We direct the ld. AO to reframe the assessment after giving the assessee an opportunity of Page 4 of 5 Pankaj Kumar-Vs- The ITO, Ward-1 (2), Guwahati AY: 2014-15 being heard. Thus, we allow the appeal of the assessee for statistical purposes only.
In the result, the appeal of the assessee is allowed for statistical purposes only.