Insufficient Evidence for Unexplained Cash Deposits Contradicts Registered Sale Deed: ITAT Dismisses Appeal [Read Order]

The Raipur Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal of the assessee, due to insufficient evidence supporting the claim of unexplained cash deposits.

Bisauha Ram Verma,the appellant-assessee, had his assessment for Assessement Year(AY) 2011-12 reopened based on AIR information. A notice under Section 148 was issued on March 30, 2018, but the assessee did not file a Return of Income ( ROI ). Reminder letters and notices under Sections 142(1) and 271(1)(b) were sent, yet the assessee remained non-responsive.

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A final show cause notice indicated that an ex-parte assessment could be made under Section 144. Due to the lack of response, the assessment was completed under Section 144. The Assessing Officer ( AO ) noted a cash deposit of Rs.34,00,000 in the assessee's bank account, which was treated as unexplained investment and added to the total income. An interest income of Rs.40,156 was also included, resulting in a total taxable income of Rs.34,40,156.

The assessee, dissatisfied with the additions, appealed to the Commissioner of Income Tax (Appeals)[CIT(A)], with hearings on May 25, 2021, and December 7, 2023. Despite submitting a reply on December 22, 2023, the CIT(A) upheld the order under Sections 144 and 147, dismissing the appeal. The CIT(A) observed that the assessee deposited Rs.34,00,000 in his SBI account without providing a full explanation for its source.

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While the assessee claimed it was from the sale of agricultural land, key details such as the sale value and date were missing. Due to incomplete documentation, the CIT(A) rejected the explanation and confirmed the addition.

The assessee dissatisfied with the decision of the CIT(A) filed an appeal before the tribunal.

The tribunal noted that the assessee deposited Rs.34,00,000 in his SBI account on 08.10.2010, two days after selling agricultural land. The registered sale deed only mentioned a sale consideration of Rs.3,12,000, with no reference to the remaining Rs.32,88,000 claimed as on-money. The assessee failed to provide any evidence to support this claim.

Although the assessee counsel referred to an inspector's report stating the deposit came from the land sale, the tribunal held that this report alone was insufficient without corroborating evidence. The presumption of the registered sale deed's accuracy was not rebutted by the assessee.

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The bench, following the principles laid down by the Supreme Court in Rattan Singh & Ors. and the Punjab & Haryana High Court in Paramjit Singh vs ITO, held that in the absence of evidence to challenge the registered sale deed, the contents of the document, including the sale consideration, cannot be disputed based on oral claims.

The two member bench comprising Ravish Sood ( Judicial Member ) and Arun Khodpia( Accountant Member ) dismissed the assessee's appeal, finding it to lack merit.

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