SHAIK MAHAMMADADIL,KADAPA vs. INCOME-TAX OFFICER, WARD-1, KADAPA

Brief facts of the case are that the assessee had deposited substantial cash of Rs.10,14,500/- in bank account during demonetization period, but had not filed any return of income for the assessment year 2017-18. As the assessee had not filed any return of income for the assessment year 2017-18, a notice under section 142(1) of the Income tax Act, 1961 (“the Act”) was issued on 22/03/2018. As the assessee failed to explain the sources for the cash deposit, the learned Assessing Officer treated the entire amount of Rs.10,14,500/- as unexplained money and made addition under section 69A of the Act.

Aggrieved by the order of the learned Assessing Officer, assessee preferred an appeal before the learned CIT(A), but the learned CIT(A) confirmed the addition made by the learned Assessing Officer and dismissed the appeal of the assessee.

Against which, assessee preferred appeal before the Tribunal. At the outset, taking my attention to sale deed executed on 29/08/2016, learned AR submitted that assessee’s father, Shri Shaik Abdul Khader along with his brother, Shri Shaik Abdul Kareen sold a property situated at Kadapa for a consideration of Rs.18,38,000/- and gifted an amount of Rs.10,00,000/- to the assessee from his share, out of love and affection. Assessee deposited the entire amount in his HDFC account during demonetization period.

Learned AR furnished a petition filed by the assessee for admission of additional evidence in the form of sale deed and confirmation cum affidavit received from his father and pleaded to admit the same as it forms basis for his source of cash deposit, which could not be filed by the assessee during the assessment and appellate proceedings.

I have heard the rival contentions and perused the material on record in the light of submissions made on either side. It is undisputed fact that the assessee deposited an amount of Rs.10,14,500/- during the demonetization period. Though the assessee could not substantiate his sources for the cash deposits during the assessment and appellate proceedings, he filed a petition for admission of additional evidence in the form of sale deed executed on 29/08/2016 and confirmation letter cum affidavit from his father and pleaded to admit the same for adjudication of his appeal as it forms basis for his source of cash deposit. Keeping in view the foregoing facts and circumstances of the case and the principles of natural justice, I admit the additional evidence filed by the assessee as per Rule 46 of the Income Tax Rules. On perusal of the same, I find that the assessee had deposited the cash in his HDFC account during the demonetization period and the source being the gift amount received from his father out of his share of sale consideration. As the source is properly explained by the assessee with credible evidence for depositing the cash in his HDFC account, I direct the learned Assessing Officer to delete the addition made.

In the result, the appeal of the assessee allowed.