Loading judgment…
Facts
The assessee received compensation for compulsory land acquisition and withdrew Rs. 10,79,000/- in cash to purchase another land. When the second purchase did not materialize, the amount was redeposited into the bank within 3-4 months. The Assessing Officer treated this as an unexplained cash deposit and made an addition, which was upheld by the CIT (A).
Held
The Tribunal found the assessee's explanation credible, noting that the cash was withdrawn from his own bank account, for a specific purpose (land purchase), and redeposited when that purpose failed. Concluding that the assessee had a cogent ground, the Tribunal set aside the orders of the lower authorities and decided the issue in favor of the assessee.
Key Issues
1. Validity of assessment despite claims of lack of jurisdiction and non-service of notice under Section 148 of the Income Tax Act. 2. Justification of addition for unexplained cash deposit which was withdrawn from own bank for land purchase and subsequently redeposited.
Sections Cited
Section 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ : NEW DELHI
Before: SHRI SHAMIM YAHYA
This appeal by the assessee is directed against the order of the ld. CIT (Appeals)/National Faceless Appeal Centre (NFAC) dated0 15.09.2023 for the assessment year 2012-13.
Grounds of appeal taken by the assessee read as under :-
“1. On the facts and in circumstances of the case and in law, ld. CIT (Appeal) has erred in upholding the validity of assessment which is without jurisdiction. It is prayed that the impugned assessment may kindly be quashed. 2. On the facts and in circumstances of the case and in law, ld. CIT (Appeal) erred in upholding the validity of assessment without service of notice u/s 148 of the Act. It is prayed that the impugned assessment order may kindly be quashed.”
In this case, in an ex-parte order, AO made addition of unexplained cash deposited amounting to Rs.10,79,000/-. Before the ld. CIT (A),
assessee pleaded that the amount was actually withdrawn from assessee’s own bank which was received by the assessee against compulsory acquisition of land. Assessee has withdrawn that money for purchase of another land and since the second purchase did not materialise it had to deposit back the amount with the bank. Ld. CIT (A) dismissed this ground taken on account of his observation that there was not need to withdraw the cash by the assessee.
Against this order, assessee is in appeal before me. I have heard both the parties and perused the records.
I find that it is the submission of the assessee’s counsel that assessee has received compensation for compulsory acquisition of land. Assessee has withdrawn the amount for purchasing another land. Since the second purchase did not materialise assessee deposited back the amount in 3 – 4 months time. In my considered opinion, the assessee has a cogent ground in this regard. Hence, I set aside the orders of authorities below and decide the issue in favour of the assessee.
In the result, the appeal of the assessee is allowed. Order pronounced in the open court on this 6th day of March, 2024.