The Income Tax Appellate Tribunal (ITAT), Delhi Bench deleted the addition for unexplained Cash transaction as duly explained by Assessee through sale of land reflected in bank account.
The assessee,Sukhdev Singh’s case was selected on the basis of AIR information of cash deposited in the bank account of the assessee. Assessee deposited Rs.36,90,000/- in the savings bank account which was received by the assessee from sale of agricultural land and other agricultural income as well as sale proceeds. The Assessing Officer issued notice to the assessee vide notice under Section 147 and 148 of the Income Tax Act, 1961 (the Act).
As per the assessment order the notice was returned back with the postal remark that the same was not accepted. Therefore, the Assessing Officer passed an assessment order under Section 144 of the Act treating the cash transaction amounting to Rs.36,90,000/- as unexplained deposit and treated the same as income under Section 69A and made addition accordingly.
Mr. Ankit Gupta, the counsel for the assessee submitted that the assessee is an Individual–agriculturist and the only source of income is agricultural income. For the year under consideration the assessee has not filed any return of income for the reason that the assessee has only agricultural income and the same is exempt under the Income Tax Act. For the year under consideration the assessee sold the agricultural land of Rs.36,90,000/- in cash which has been deposited by the assessee in his bank account. The assessee received Rs.5,90,000/- and Rs.31,00,000/-whereas the assessee after registering the sale deed at Rs.26,20,000/. On the basis of AIR information the Assessing Officer issued the verification notice on the wrong address. The assessee could not make compliance as the same letter was never served on him.
Mr.Sanjeev Mahajan, the counsel for the assessee submitted that the Assessing Officer has made additional ex- parte as the assessee has received the notice but refused the same. The CIT (Appeals) has given substantial relief to the assessee as the assessee could not establish the reasoning about cash deposit to the extent of Rs.26,20,000/-.
As regards penalty order, Mr. Mahajan submitted that the Assessing Officer has rightly imposed a penalty and notice under Section 274 read with Section 271(1)(c) of the Income Tax Act is valid.
The coram of Judicial Member Anil Chaturvedi and Accountant Member Suchitra Kamble found that the explanation given by the assessee relating to sale of land was duly reflected in his bank account. The CIT (A)’s stand that no explanation was offered relating to the remaining cash deposit to the extent of Rs.26,20,000/- is not correct. The cash deposits were made according to the sale deed and the amount was received which was properly reflected in assessee’s bank account. Therefore, the CIT (Appeals) was not right in sustaining the remaining amount of cash deposit to the extent of Rs.26,20,000/-.
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