The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT)deleted the addition of Rs. 52.4 lakh made under Section 69 of the Income Tax Act,1961, confirming the legitimacy of cash deposits linked to a land sale.
Keshavlal Ishwardas Thakkar,appellant-assessee,was a 93-year-old agriculturist in Gujarat. He received Rs. 81 lakhs in multiple payments from Shri RM Goti for the sale of his land between July 2012 and September 2013. A final payment of Rs. 1 lakh was made in September 2016, and the land was registered on 15.08.2016.
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The Assessing Officer(AO) added Rs. 52,40,000 under section 69 of the Act based on cash deposits in the assessee’s bank account. This addition, linked to deposits made during the demonetization period, was upheld by the Commissioner of Income Tax(Appeals)[CIT(A)].
Dissatisfied by the order of the CIT(A) the assessee appealed before the tribunal.
The tribunal found that the assessee sold agricultural land for Rs. 93,75,000, receiving Rs. 85 lakhs in cash by 16.07.2012. The remaining Rs. 8,75,000 was still to be paid. The government later acquired 42% of the land for the Ahmedabad-Bhavnagar Express Highway, which was not disputed.
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Despite receiving the cash, the land was not transferred to the buyer, Shri RM Goti, who filed a police complaint in 2016. The final sale deed was executed on 15.09.2016, detailing all payments made.
The appellate tribunal noted that the assessee was about 80 years old when he received the cash, and the sale of land was undisputed. It also recognized the land’s partial acquisition by the government. It concluded that the cash was received from Shri RM Goti and that the assessee had valid reasons to keep the cash until the sale was finalized.
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The two member bench comprising Dr.BRR Kumar(Vice President)and Siddhartha Nautiyal(Judicial Member) dismissed the Revenue’s suggestion that the money should have been deposited in fixed deposits. Based on these facts, it deleted the addition of Rs. 52,40,000 made under Section 69 of the Act.
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