This article provides a detailed analysis of the proceedings and final judgment in ITA No. 1878/DEL/2020, involving Jasmer Singh Mann, Bhiwani, and the Income Tax Officer (ITO), Ward-5, Hisar. The case pertains to the Assessment Year (AY) 2014-15, was filed on November 20, 2020, and the final order was pronounced on May 5, 2022.
Jasmer Singh Mann, the appellant, contested the addition of Rs. 34,15,725 made by the Assessing Officer (AO) on account of alleged unexplained cash deposits in his bank account. The appellant also challenged the direction given by the CIT(A) to reopen his case for AY 2013-14 under section 150(1) of the Income Tax Act.
The appellant, represented by Sh. Rajesh Popli, Advocate, argued that the cash deposits in question were from the sale of land to various persons. The appellant provided a cash flow statement demonstrating that the cash deposits were sourced from the sale proceeds and the opening cash balance from the previous financial year. The cash flow statement, supported by sale deeds, showed an opening cash balance of Rs. 30,62,450 as on April 1, 2013.
The respondent, represented by Sh. Om Prakash, Sr. DR, supported the AO’s action. The AO had calculated the peak amount of deposits by allowing the benefit of cash withdrawals, ultimately making the addition of Rs. 34,15,725 under section 68 of the Income Tax Act.
The Income Tax Appellate Tribunal (ITAT), presided over by Shri C.M. Garg, Judicial Member, reviewed the facts and arguments presented. The tribunal noted that neither the AO nor the CIT(A) had considered the appellant’s cash flow statement, which demonstrated the source of the cash deposits.
The tribunal found the appellant’s explanation plausible and sustainable. It directed the AO to recalculate the disallowance under section 68 by giving credit for the Rs. 24,45,000 received from the sale of land. This amount was supported by the sale deeds and the opening cash balance of Rs. 30,62,450. Consequently, the tribunal sustained an addition of Rs. 9,70,725.
The final order, pronounced on May 5, 2022, reads:
In the result, the appeal of the assessee is partly allowed.
Signed by:
Shri C.M. Garg, Judicial Member
This judgment highlights the importance of maintaining proper documentation and providing a detailed cash flow statement to substantiate the source of cash deposits.
ITA No. 1878/DEL/2020 – Jasmer Singh Mann vs ITO Ward-5, Hisar: Unexplained Cash Deposits
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