MANGAT RAM ,YAMUNA NAGAR vs. INCOME TAX OFFICER WARD 5 , YAMUNA NAGAR

is relating to the quantum additions, whereas, is relating to the & 481/CHD/2024 Mangat Ram v. ITO 2 penalty levied u/s. 271(1)(c) of the Income Tax Act, 1961 (in short ‘the Act’) in respect of the aforesaid quantum additions made by the Assessing Officer (in short “AO”)

The sole issue involved in the present appeal is relating to the confirmation of the addition made by the Assessing Officer of Rs. 3,74,572/- on account of unexplained cash deposits in the Bank account of the assessee.

At the outset, the ld. counsel for the assessee has submitted that the assessee had sold agricultural land and received sale consideration of Rs.12.50 lacs. However, the Assessing Officer noticed that the assessee had 6/7 share in the sold property. He therefore, calculated the share of the assessee in the sale consideration accordingly and held that the source of deposits to the extent of Rs.10,71,428/- stood explained. He, however, made the addition of the remaining amount of Rs.3.74 lacs as cash deposits from unexplained sources of income. The ld. CIT(A) confirmed the addition so made by the Assessing Officer.

I have heard the rival contention and gone through the records. The ld. counsel for the assessee has submitted that the entire sale consideration was deposited in the Bank account of the assessee.

The ld. DR, however, has submitted that since the assessee could not explain the source of deposits of Rs.3.74 lacs, therefore the lower authorities have rightly made/confirmed the impugned addition.

I have considered the rival submission. In my view, the assessee has duly explained the source of deposits to the extent of Rs.12.50 lacs being the sale consideration received from the sale of agricultural land. So far as, the meager amount of Rs.1.96 lacs is concerned, considering the smallness of the amount, it can be well assumed that the said amount was out of the agricultural income of the assessee. In view of this, the impugned addition made by the Assessing Officer is not sustainable and the same is ordered to be deleted.

The appeal of the assessee is treated stands allowed.

The appeal is time barred by 159 days. The ld. counsel for the assessee has submitted that the assessee was not aware of that the penalty appeal has been decided by the ld. CIT(A), even prior to the decision given in the quantum appeal. The assessee came to know of the impugned order of the ld. CIT(A) after the decision in the quantum appeal, resulting in the aforesaid delay. Considering the above submission, the delay in filing the above appeal is hereby condoned.

The impugned penalty assailed in this case is based upon the quantum additions. As discussed above, while adjudicating in since, the quantum addition stands deleted, hence, the very basis for which the penalty was levied as ceased to exist. The impugned penalty, thus has not legs to stand, hence, the same is ordered to be deleted.

In the result, both the above appeals are allowed.