What did the Tribunal hold?

The Tribunal held that the assessee had sufficiently explained the sources of the cash credits. Therefore, no addition was warranted by the Assessing Officer.

The assessee, a salaried employee, had cash credits totaling Rs. 5,69,500/- in his bank account. These credits included amounts from his brother, sister, sale proceeds of a house, and cash deposited by his wife.

What were the issues?

Whether the assessee provided satisfactory explanations for the cash credits appearing in his bank account, and if the additions made by the Assessing Officer were justified.

Mukesh Tandon, Moradabad vs ITO | ITAT Delhi 2023

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: Dr. B. R. R. Kumar

Hearing: 15.05.2023Pronounced: 20.06.2023

ORDER The present appeal has been filed by assessee against the order of National Faceless Appeal Centre (NFAC), Delhi dated 08.02.2023.

Following grounds have been raised by the assessee:

“1. The Ld. CIT(A) is as such bad in law and on facts and circumstances, on both, while confirming the action of Ld. AO for addition of Rs. 569500/-.

2. That the Ld. CIT(A) has erred in law and on facts, on both, while confirming the addition of Rs. 29500/- (9500/- + 20000/-) made by the Ld. AO by alleging that the appellant has not mentioned anything about the sources of the payees; without going through the documents furnished by the assessee as well as without asking anything in this regard from us.

3. That the Ld. CIT(A) has erred in law and on facts, on both, while confirming the additions of Rs. 240000/-, made by the Ld. AO, by alleging that the appellant did not mention anything about the source Mukesh Tandon of Rs. 240000/- deposited in cash, by his wife, with supporting evidence. Therefore, the appellant has not been able to explain the sources of Rs. 240000/- satisfactorily; without appreciating the facts that she is an income tax payee as well as it is a well known fact that every lady kept some savings for sudden needs as well as without asking anything in this regard from us.

That the Ld. CIT(A) has erred in law and against the facts and circumstances of the case, on both, while confirming the addition of Rs. 300000/-, made by the Ld. AO, by alleging that the appellant has not mentioned that the relevant information, regarding transfer of sales proceeds of house by purchaser - Smt. Tripti Kumari, was provided to the assessing officer; so under the circumstances, it is not possible to allow relief to the appellant in respect of the deposit of Rs. 300000/- also without going through the records available with the department wherein in computation of income; the full details of its sales consideration have been given as well as the bank statements wherein the sum under consideration was deposited was filed before the Ld. AO and also full discussion on computation of capital gain of this property has been made by the Ld. AO in his order & out of which he has made some addition, however the same was deleted by the Ld. CIT(A) and also without asking anything in this regard from us.”

The assessee is a salaried employee filed return of income declaring total income of Rs.5,32,740/-.

Mukesh Tandon 4. The AO made addition of Rs.5,69,500/- on account of cash credits. The explanation of the assessee with regard to the cash credits is as under:

SI. Date of Credit Amount Remarks No. Entry a. 20/05/2013 9,500/- Ch. No. 997934 drawn by Shri Rakesh Tandon (Brother) on IOB, in favour of Mukesh Tandon. Drawer of the Cheque Sri. Rakesh Tandon has been expired. Hence, Statement of account could not be obtained. b. 11/06/2013 20,000/- Ch. No. 946880 drawn by Smt. Sushma Kapoor (sister) on Indian Bank, in favour of Mukesh Tandon. (Bank Certificate is enclosed). c. 09/10/2013 3,00,000 Credit by transfer of sale proceedings of house by purchaser Smt. Tripti Kumari (Bank Cirtificate is enclosed). d. 11/03/2014 2,40,000/- Cash deposited by the wife of the assessee Smt. Renu Tandon for purchasing of FDR. (Bank Certificate is enclosed).

From the above, it can be concluded that the assessee has duly explained the sources. With regard to the amount of Rs.9,500/- drawn by Sh. Rakesh Tandon brother of the assessee who since expired, confirmation would not be filed. Keeping in view the entire facts and circumstances of all the four entries, we hold that no addition is called for.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 20/06/2023.

MUKESH TANDON,MORADABAD vs. ITO, WARD 1(1), MORADABAD

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