Case Number: ITA 1135/DEL/2021
Appellant: Dharm Singh, Meerut
Respondent: Income Tax Officer, Ward-1(2), Meerut
Assessment Year: 2012-13
Case Filed On: 2021-09-16
Order Type: Final Tribunal Order
Date of Order: 2022-06-22
Pronounced On: 2022-06-22
In this appeal, the assessee, Shri Dharm Singh, challenged the addition of Rs. 8 lakhs made by the Assessing Officer (AO) to his income for the assessment year 2012-13. The primary contention was that the source of the cash deposit in his bank account was the sale of agricultural land, which was jointly sold by the assessee and his brother. The assessee’s brother did not have a bank account, so the entire sale consideration was deposited in the assessee’s account.
The Tribunal noted that a notice was sent to the assessee, which was returned by the postal authorities. Following the judgment of the Hon’ble Supreme Court in the case of PCIT vs. M/s. I Ven Interactive Ltd., the Tribunal held that the AO was justified in sending notices to the address mentioned in the PAN database. Consequently, the Tribunal proceeded ex-parte, i.e., without the presence of the assessee.
The Tribunal observed that the main contention was the addition of Rs. 8 lakhs due to the sale of agricultural land. The CIT(A) accepted the sale of the land and granted partial relief but confirmed the addition of Rs. 8 lakhs, stating that there was no proof of the non-encashment of the cheque involved.
The Tribunal, after considering the rival submissions, noted that the assessee was not given a proper opportunity of hearing by the AO. The CIT(A) also dismissed the assessee’s request for a remand report and for additional evidence.
The Tribunal found that the assessee and his brother sold agricultural land for Rs. 18,96,000, and since the brother did not have a bank account, the entire amount was deposited into the assessee’s account. The Tribunal held that the CIT(A) was not justified in confirming the addition without issuing a show-cause notice to the assessee regarding the non-encashment of the cheque.
The Tribunal concluded that the addition of Rs. 8 lakhs was not sustainable as the CIT(A) did not provide the assessee with an opportunity to prove his case. Consequently, the Tribunal directed the AO to delete the addition of Rs. 8 lakhs.
In the result, the appeal of the assessee was allowed.
Order pronounced in the open Court on 22.06.2022.
Judicial Member: Shri Chandra Mohan Garg
For Assessee: None
For Revenue: Sh. Om Prakash, Sr. DR
Date of Hearing: 09.06.2022
Date of Pronouncement: 22.06.2022
The Tribunal’s decision highlights the importance of providing adequate opportunity to the assessee to present their case. In this instance, the Tribunal found that the addition made by the AO and confirmed by the CIT(A) was not justified due to the lack of proper notice and opportunity for the assessee to explain the source of the cash deposit. The deletion of the addition underscores the need for a thorough and fair assessment process.
Dharm Singh, Meerut vs ITO, Ward-1(2), Meerut: 2012-13 – Source of Cash Deposit Explained
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform