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Facts
The assessee appealed against an addition of Rs. 60,00,500/- made by the Assessing Officer and confirmed by the CIT(A) for unexplained cash deposits. The assessee claimed the funds originated from the sale of agricultural land jointly owned by him, his father, and his uncle, with the uncle's share deposited in the assessee's account due to the uncle lacking a bank account. Despite the assessee submitting various documents, the AO made the addition, and the CIT(A) confirmed it without proper representation from the assessee.
Held
The Tribunal noted that both parties agreed the documents filed by the assessee required re-examination by the AO. Consequently, the Tribunal restored the appeal to the file of the AO for de novo adjudication, directing that the assessee be given a reasonable opportunity of being heard and allowed to furnish fresh evidence. Grounds related to the merits of the addition (5 to 10) were allowed for statistical purposes.
Key Issues
Confirmation of an addition of Rs. 60,00,500/- as unexplained cash deposits, procedural lapses in assessment including lack of natural justice, and the need for proper examination of evidence regarding the source of funds from agricultural land sale.
Sections Cited
147, 143(3), 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “G”: NEW DELHI
Before: SHRI C. N. PRASAD & SHRI M. BALAGANESH
O R D E R PER M. BALAGANESH, A. M.: The appeal in AY 2011-12, arises out of 1. the order of the National Faceless Appeal Centre (NFAC), New Delhi [hereinafter referred to as „ld. CIT(A)‟, in short] in Appeal No. ITBA/NFAC/S/250/2023-24/1060166301(1) dated 27.01.2024 against the order of assessment passed u/s 147/143(3) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 17.07.2018 by the Assessing Officer, ITO, Ward-3(3), Noida (hereinafter referred to as „ld. AO‟).
The assessee raised the following grounds before us:- 2.
“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs.60,00,500/- made by the ITO.
Sandeep Khatana 2. The CIT(A) has erred in facts and in law in upholding the reopening of assessment even though the jurisdictional preconditions for reopening of assessment were not met.
The CIT(A) has erred in facts and in law in upholding the reopening of assessment even though the reasons for reopening were not provided to the Appellant before passing the assessment order in violation of the binding decision of the Delhi High Court in Sabh Infrastructure Ltd. v. ACIT.
The CIT(A) has erred in facts and in law in holding that the AO had duly followed the procedure prescribed in GKN Driveshafts.
The CIT(A) has erred in facts and in law in passing the order in undue haste, without providing a proper opportunity to the Appellant in violation of the principles of natural justice.
The CIT(A) has erred in law in not appreciating that failure of the A.O. to grant cross examination of parties on whose statements the additions were made is fatal to the case of revenue.
The CIT(A) has erred in facts and in law in not disposing of the appeal on its merits and ignoring the glaring inconsistencies on record: 7.1. in relying on the order of the AO to sustain the addition even though the amount added had already been returned to the actual owner of the money, the uncle of the Appellant. 7.2. in relying on the order of the AO even though the statement of a witness, Dharamveer Singh has been dismissed as being self- serving, without any basis. 7.3. in relying on the order of the AO even though the evidence filed before the AO was ignored in totality.
The CIT(A) has erred in facts and in law in upholding the addition of Rs. 60,00,500/- without appreciating that the AO had discarded the statement of the key witness, Dharamveer is interested party, without any basis and without allowing the Appellant to cross examine the witness.
That the CIT(A) has erred in facts and in law in not appreciating the fact that the reliance of the AO in the self-serving statement of the seller is contrary to all logic.
That the CIT(A) has erred in facts and in law in sustaining the addition made u/s 69 of the Act without satisfying the ingredients of the same.
That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”
Ground Nos. 2, 3 and 4 were stated to be not pressed by ld AR at 4. the time of hearing and the same is reckoned as a statement made from the bar and accordingly dismissed as not pressed.
Ground Nos. 5 to 10 raised by the assessee are only challenging a 5. single addition of ₹60,00,500/- made on account of cash deposits on the ground that sources was not properly explained by the assessee.
We have heard the rival submissions and perused the material 6. available on record. It is not in dispute that there were cash deposits of ₹60,00,500/- in bank account by the assessee during the year under consideration. The source for the same was explained by the assessee to have arisen on account of sale of agriculture land. The sale consideration reflected in the registered sale deed on sale of agricultural land was ₹51,50,000/-. The assessee claimed that the agricultural land was sold for Rs. 1,25,09,500/- being the money received as per agreement. It is not in dispute that agricultural land was held by father and uncle of the assessee and the same was sold. It was submitted by the assessee that since his uncle did not have any bank account, the sale consideration received by his uncle in cash was deposited in the bank account held by the assessee. In support of this, assessee filed details of sale consideration received in cash by his father, uncle, filed registered and unregistered agreement to sell, affidavit from the family members, etc before the ld AO. Despite these documents, the ld AO proceeded to make addition of ₹60,00,500/- as unexplained money in the hands of the assessee herein. Before the ld CIT(A), there was no proper representation by the assessee.
Sandeep Khatana Both the parties before us fairly agreed that the documents filed by 7. the assessee requires to be re-examined by the ld AO and accordingly it would be fit and appropriate to restore this issue to the file of the ld AO. Considering the same, we restore this appeal to the file of the ld AO for de novo adjudication in accordance with law. Needless to mention that the assessee be given reasonable opportunity of being heard. The assessee is also at liberty to furnish fresh evidences, if any, in support of his contentions. Ground Nos. 5 to 10 raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is partly allowed for 8. statistical purposes.
Order pronounced in the open court on 28/08/2024.