The Income Tax Appellate Tribunal (ITAT), Delhi Bench has held that cash deposit by a real estate agent is sustainable, not confirmed by an investor or builder.
The appellant, Mayank Kumar Garg, is engaged in the business of monitoring and maintenance of advertising panels. During scrutiny assessment the Assessing Officer added cash deposits of Rs. 62,09,900/- as unexplained income alleging that the assessee failed to explain the source of the cash deposits.
On appeal, the CIT (A) found that out of a total unexplained deposit of Rs. 62,09,900/-, the assessee was able to explain the deposits received from certain persons who confirmed that they had paid money by way of cash to the Assessee who used to book the flats in their names. However, a sum of Rs. 11,01,317/- was found still unexplained and to that extent, the addition was sustained.
The Tribunal observed that the assessee is an inter-mediatory between the investors and the builders and some part of the admitted payments made by these investors were confirmed, the remaining amounts not confirmed by the builder can be explained, by the assessee, if these unconfirmed amounts totaling 11,01,371, were deposited by way of cheques to the respective builders, who failed to confirm.
Hence, the Coram of G.S.Pannu, President, and Mr. Anubhav Sharma, Judicial Member directs the CIT(A) to allow the assessee to establish the amount paid to the two builders by way of cheques or other banking mode and if the assessee succeeds to establish the fact, the remaining addition of Rs. 11,01,317/- as sustained by the CIT(A) shall stand deleted.
Adv. Mr. Anil Kumar Jain and Mr. Sumit Kumar Verma appeared on behalf of the appellant and the revenue.
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