What did the Tribunal hold?

The Tribunal held that the claim regarding the mother's sale of land needed substantiation with documentary evidence like the sale deed. Therefore, the matter was remitted back to the Assessing Officer for re-examination.

The assessee deposited a significant amount in their bank account. The Assessing Officer accepted a portion of the deposit as explained by the sale of land but added back the remaining amount. The assessee claimed this remaining amount was from the sale of land by their mother.

What were the issues?

Whether the addition made by the Assessing Officer on account of cash deposits in the bank, which the assessee claimed was from the sale of land by his mother, was justified without proper substantiation.

Shri Ramachandran Lakshmanan vs DCIT | ITAT Chennai 2017

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN

For Respondent: Smt. C. Yamuna, JCIT

Hearing: 03.07.2017Pronounced: 06.09.2017

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -5, Chennai, dated 31.08.2016 and pertains to assessment year 2012-13.

The only issue arises for consideration is addition of `69,80,994/- towards cash deposit in the bank.

Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee has deposited `106 lakhs in ICICI Bank account.

The assessee has produced evidence to the extent of the deposit of `36,49,064/- for cash deposit. According to the Ld. counsel, the assessee claimed that `36,49,064/- was from sale of land, therefore, the Assessing Officer accepted the explanation of the assessee. With regard to the balance amount of `69,80,994/-, the assessee claimed before the Assessing Officer that this was from sale of land by assessee’s mother. According to the Ld. counsel, the assessee claimed before the Assessing Officer that the amount received by the assessee’s mother on sale of land was also deposited in his account. The Assessing Officer disbelieved the claim of the assessee and made addition. According to the Ld. counsel, in fact, the sale consideration received by the assessee’s mother was deposited in the assessee’s account, therefore, an opportunity may be given to the assessee to substantiate the claim before the Assessing Officer.

On the contrary, Smt. C. Yamuna, the Ld. Departmental Representative, submitted that the assessee’s mother has one more account along with the assessee in the very same bank.

Therefore, according to the Ld. D.R., there was no reason to deposit the sale consideration of the assessee’s mother in the assessee’s account. If at all the assessee’s mother received any sale consideration, it should have been deposited only in the joint account of the assessee’s mother. Moreover, according to the Ld. D.R., the assessee has not produced any documentary evidence for sale of land, therefore, the CIT(Appeals) has rightly confirmed the addition made by the Assessing Officer.

We have considered the rival submissions on either side and perused the relevant material available on record. The assessee has deposited `106 lakhs in his account held with ICICI Bank. The Assessing Officer accepted the claim of the assessee to the extent of `36,49,064/-. However, rejected the explanation of the assessee to the extent of `69,80,994/-. The assessee claimed that the sale consideration received by his mother was deposited in his bank account. When the assessee claims that the sale consideration received by the assessee’s mother was deposited in his bank account, this Tribunal is of the considered opinion that the matter may be established by producing necessary copy of sale deed.

Therefore, the matter needs to be re-examined by the Assessing Officer. Accordingly, the orders of the authorities below are set aside and the addition of `69,80,994/- is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter in the light of the material that may be produced by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

SHRI RAMACHANDRAN LAKSHMANAN,CHENNAI vs. DCIT, CHENNAI

What did the Tribunal hold?

What were the facts?

What were the issues?

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