ITO, REWARI vs. SH. HARI RAM, REWARI

This appeal was taken up for consideration on 15.09.2016, but none appeared on behalf of the assessee, despite having knowledge about the date of the hearing of appeal. Since the hearing was adjourned on the last occasion at the request of the assessee and none appeared on behalf of the assessee on the fixed date, I have no option but to hear the appeal ex parte. Accordingly the ld. DR was heard.

The controversy involved in this appeal is with regard to addition of Rs.45,05,000 made by the Assessing Officer on account of unexplained cash deposit in the bank account.

The facts in brief are that on the basis of AIR information the Assessing Officer noted that assessee has deposited cash of Rs.49,55,000 in Savings Bank A/c No. 01190001334 with SBI, Dharuhera and issued notice u/s. 148 of the Income-tax Act, 1961 [“the Act”] having invoked the provisions of section 147 of the Act.

In order to explain the source of deposits, the ld. Counsel for the assessee has stated that from the total cash deposits, a sum of Rs.45 lakhs was deposited in the bank on 10.03.2007, out of the token money received from Lt. Surender Singh, S/o. Shri Manohar Singh vide agreement dated 5.3.2007. Since the assessee could not produce Lt. Surender Singh with whom he has executed agreement to sell, though copy of agreement was placed on record, the Assessing Officer made an addition of Rs.45,05,000 as unexplained deposit in the bank.

The assessee preferred appeal before the CIT(Appeals) with the submission that the assessee has executed agreement of sale of property on 5.3.2007 for a total price of Rs.3,40,00,000, out of which he had received Rs.50,00,000 as earnest money, after execution of the sale agreement. The sale agreement was witnessed by Shri Dharamveer Singh and Lt. Shamsher Singh. Since the assessee has duly discharged his onus by producing the witnesses before the Assessing Officer, the Assessing Officer should have accepted the claim of assessee. It was also further contended that the purchaser Lt. Surinder Singh could not be produced before the AO as he had expired on 21.04.2008, but one of the survivor witness Shri Dharamveer Singh was produced before the Assessing Officer during the remand proceedings. The sole witness had admitted execution of sale agreement and advance received by the assessee. Since the deal could not be materialised, the entire money was refunded to Lt. Surinder Kumar.

The CIT(Appeals) re-examined the claim of assessee and being convinced with the explanation, he deleted the addition.

Now the revenue is in appeal before the Tribunal and placed reliance upon the order of Assessing Officer.

Having carefully examined the orders of authorities below and documents placed on record, I find that the assessee has successfully proved the source of deposit in the bank by placing the relevant evidence on record. But the purchaser of the property could not be produced as he was not alive, whereas the other witness was produced for examination. During the course of his examination, he admitted the factum of advance given to the assessee on account of sale transaction. Since the relevant evidence was placed on record and in view of that, I am of the view that no addition on account of unexplained source of deposits can be made. I accordingly find myself in agreement with the order of CIT(Appeals) and I confirm the same.

In the result, the appeal by the revenue is dismissed.