The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) while deleting the addition made by the assessing officer held that source for cash deposit in savings bank account is made out of sale proceeds of flat.
The Assessee Siddharth Mehta deposited Rs. 29 lakhs in his savings bank account. This information was obtained by the AO under AIR. The AO on receipt of the said information issued notice to the assessee on 27.03.2018 which was duly served upon him asking the source for the said deposits. No response was filed by the assessee for the same. No return of income was also filed by the assessee for AY 2011-12.
Accordingly the AO concluded that income of the assessee to the extent of Rs. 29 lakhs representing cash deposit in bank had escaped assessment warranting reopening of assessment.
Aggrieved by the order assesee filed an appeal before the CIT(A). The CIT(A) dismissed the appeal filed by the assessee. Thereafter the assessee filed an appeal before the tribunal.
During the adjudication Ranjan Chopra, the counsel for assessee argued that the assessee sold a flat for Rs. 43 lakhs.among this 29 lakhs was received by way of cash and the balance amount received through cheque.
Om Prakash, Department representatives argued that the assessee could not produce the confirmation from the buyer of the property that he had paid Rs. 29 lakhs in cash for the property. Henec there was no nexus between alleged receipt of sale consideration in cash of Rs. 29 lakhs and the cash deposit made in the bank account by the assessee and thus the source for cash deposit remains unexplained.
The tribunal observed that the assessee in the return filed in response to notice under Section 148 of the Income Tax Act had declared income of Rs. 5,27,050/- which is nothing but the salary income. Hence assessee did not have any other source of income except salary which is only Rs. 5.27 lakhs.
Considering this fact the bench concluded that explanation given b the assessee that he had received Rs. 29 lakhs in cash on sale of property is to be believed and assessee faithfully had deposited the said sum in his bank account within short span of time
After analyzing the submission of both parties the single bench of M. Balaganesh, ( Accountant Member ) held that source for cash deposit for Rs. 29 lakhs in the bank account is made out of sale proceeds received in cash is to be believe as there is no other source of income available to the assessee.
Therefore the bench allowed the appeal filed by the assessee.
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