Cash Deposit from Sale of Property of Father is not taxable : ITAT quashes Addition [Read Order]
ITAT – Cash Deposit – Sale of Property – taxscan
ITAT – Cash Deposit – Sale of Property – taxscan
The Amritsar bench of Income Tax Appellate Tribunal (ITAT) ruled that the assessee is not liable for payment of tax related to sale of property which belongs to his father. Thus, the bench quashed the addition.
The bench opined that the source of cash deposited in bank accounts is well explained considering the cash trial of the assessee. However, the Assessing Officer (AO) had only considered the cash deposit.
The assessee filed the appeal against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi against the order passed under Section 250 of the Income Tax Act, 1961.
The assessee’s representative submitted that the addition was made by the AO for depositing the cash total amount of Rs.1,98,58,499 in two bank accounts of the assessee. Considering the disclosed business income Rs.3,10,540, the addition was confirmed to Rs. 1,95,47,959 and the assessment was completed under Section 144 of the Income Tax Act.
The assessee asserted that the source of the cash deposit was from sale of the immovable properties, loan from the father of the assessee.
Further, the assessee is the power of attorney holder of the property (land) which was owned by his father. So, the entire amount related to sale of land would not be taxed in the hands of the assessee.
The bench observed the affidavit submitted by the assessee and his father. In the affidavit the father accepted that the said amount was related to him and he is ready to pay the tax on the said amount. The Permanent Account Number (PAN) and Aadhaar was also submitted before the revenue authorities.
Further reviewing the AO's remand report revealed that the AO believed the assessee to be a "deemed owner" in respect to the sale of his father's property. The assessee's representative, however, clarified throughout the hearing that the assessee does not count as a presumed assessee under section 159 of the Income Tax Act.
However, the bench of Dr. M.L. Meena and Anikesh Banerjee ruled that the concept of the deemed assessee cannot be sustained as per the explanation of section 159 and 160 read with Section 2(7) of the Income Tax Act.
Finally, the tribunal declared that the source of the cash deposit is adequately explained and upheld the arguments and supporting documentation offered by the assessee. The assessee has no tax liability because the deposit came from the sale of a father's property.
To Read the full text of the Order CLICK HERE
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