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Facts
The assessee, a senior citizen, did not file their income tax return for AY 2017-18. The case was selected for limited scrutiny due to substantial cash deposits in their bank account. The assessee claimed the source of these deposits was from the sale of property and a sum received from their son.
Held
The Assessing Officer made an addition of Rs. 32,00,500/- under section 69A of the Act. The CIT(A) upheld this addition without verification. The Tribunal noted that the AO did not conduct necessary verification for the cash deposits, despite documentary evidence provided by the assessee.
Key Issues
Whether the Assessing Officer and CIT(A) erred in making additions to the income without proper verification of the source of cash deposits.
Sections Cited
69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC-‘B’ BENCH : BANGALORE
Before: SMT. BEENA PILLAI
Date of Hearing : 27-06-2024 Date of Pronouncement : 27-06-2024 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal arises out of order dated 31.03.2024 passed by NFAC, Delhi for A.Y. 2017-18.
Brief facts of the case are as under: 2.1 The assessee is a Senior Citizen and accordingly has not filed his return of income Assessment Year 2017-18. Based on information available with the department with respect to substantial cash deposits in the Bank Account of the assessee
Page 2 of during the year under consideration, the case was selected for limited scrutiny.
2.2 During the course of scrutiny, the Ld.AO sought for source of deposits in the bank account of the assessee, for which the assessee stated that, the source is from the sale of property entered by and between the assessee and his family members with one Sri. Muniyappa D Naveen vide registered sale agreement dated 11/12/2014. It was submitted that the assessee along with his other family members agreed to sell the land situated at Survey Number 102/1, MR No. 9/08-09, situated at KADA Agrahara Village, Bidrahalli Hobli, Bengaluru East Taluk, measuring 13 guntas for a total agreed consideration of Rs. 50,00,000/. A copy of the registered sale agreement dated 11/12/2014 entered by and between the assessee and his family members with one Sri. Muniyappa D Naveen was furnished by the assessee.
2.3 The assessee further submitted that, out of the said agreed sale consideration of Rs.50,00,000/- the assessee received sum of Rs. 26,50,000/-, that was paid in cash, on the date of registered sale agreement, and the balance amount of Rs. 23,50,000/- was payable to the assessee by the purchaser.
2.4 It was also submitted that the assessee had also received a sum of Rs. 4,50,000/- from his eldest son Sri. Pradeep and the same constituted the source for the deposit of amount in the bank account of the assessee. The Ld.AO however completed the assessment by passing order under section 144 of the Act on Page 3 of 06.12.2019 with the addition of Rs. 32,00,500/- under section 69A of the Act.
2.5 Aggrieved by the order of the Ld.AO, the assessee preferred appeal before the Ld.CIT(A).
2.6 The Ld.CIT(A) without carrying out any verification upheld the addition made in the assessment order.
2.7 Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before the Tribunal.
The Ld.AR submitted that the issue needs to be verified based on the evidences. 3.1 On the contrary, the Ld.DR relied on the orders passed by authorities below and submitted that there is no error in the order of the first appellate authority.
I have perused the submissions advanced by both sides in the light of records placed before us.
It is noted that the Ld.AO found cash deposits in the bank account of the assessee made during the demonetisation period and other than demonetisation period for which necessary verification was not carried out by the authorities. Considering the fact that the assessee has documentary evidences in support of the cash deposits, the entire issue deserves to be looked into once again based on the following CBDT instructions issued for verification of the demonetised cash deposited into the accounts.
Page 4 of The 1st instruction was issued on 21/02/2017 by instruction number 03/2017. b) The 2nd instruction was issued on 03/03/2017 instruction number 4/2017. c) The 3rd instruction was in the form of a circular dated 15/11/2017 in F.No. 225/363/2017-ITA.II and the last one dated 09/08/2019 in F.no.225/145/2019-ITA.II.
The assessee is directed to furnish all the relevant information and details in support of the claim, based on which, the assessing officer is directed to carry out necessary verifications. In the interest of justice, the issues are remanded back to the Ld.AO, to consider the claim afresh and to pass a detailed order on merits. Needless to say that proper opportunity of being heard must be granted to the assessee. Accordingly, the grounds of appeal raised by assessee stands allowed for statistical purposes. In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 27th June, 2024.