DCIT, TRICHY vs. R.RAVISHANKAR, TRICHY

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) – 1, Tiruchirapalli, dated 20.05.2015 and pertains to assessment year 2011-12.

Shri S. Renga Rajan, the Ld. Departmental Representative, submitted that the assessee made deposit in the bank account to the extent of `84,67,000/-. The assessee explained before the Assessing Officer that the deposits are made from the business income. The assessee has also explained before the Assessing Officer that the sale consideration of land was also deposited in the bank account. The entire cash deposits, according to the Ld. D.R., were not explained before the Assessing Officer. When the cash deposits were made in the bank account, the onus is on the assessee to prove the source of income. Since the assessee failed to prove the source, according to the Ld. D.R., an addition of `84,67,000/- was made under Section 69A of the Income-tax Act, 1961 (in short "the Act"), therefore, the CIT(Appeals) is not justified in allowing the claim of the assessee.

Referring to order of the CIT(Appeals), the Ld. Departmental Representative submitted that the assessee has realized `2.3 Crores from the sale proceeds of land. According to the Ld. D.R., the assessee is one of the co-owners and transferred the land through a power of attorney agent. The assessee has also received some amount as advance and physical possession of property was handed over. On perusal of ledger account, it was mentioned as “to be audit”. The CIT(Appeals) however, allowed the claim of the assessee on the ground that that the assessee had sufficient funds to deposit in the bank account. According to the Ld. D.R., the CIT(Appeals)’s order is based upon unaudited ledger copies of bank account, therefore, it cannot be justified.

On the contrary, Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the Assessing Officer made an addition of `84,67,000/- on the ground that there are unexplained cash credits in the bank account of the assessee. The ledger account produced before the Assessing Officer contained all the information about the cash deposits. According to the Ld. counsel, cash book was part of computer print outs which contained the information regarding cash deposits. The deposits are reflected in the ledger account as contra entries, which means the cash has already been withdrawn from cash book and deposited in the bank. According to the Ld. counsel, the cash book was part of computer print outs, which was maintained in the Tally account package. The assessee has also realized sale proceeds to the extent of `2.3 Crores. Even though the assessee is one of the co-owners, the entire amount was received by the assessee. Therefore, according to the Ld. counsel, the Revenue cannot dispute the availability of cash balance with the assessee as held by Punjab & Haryana High Court in CIT v. Smt.

We have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that there was a deposit of `84,67,000/- in the bank account of the assessee. The Assessing Officer made addition on the ground that the assessee could not explain the source of deposit.

In the result, the appeal filed by the Revenue is dismissed.