Case Number: ITA 1572/DEL/2020
Appellant: Tejpal Singh, Bahadurgarh
Respondent: ITO Ward-5, Rohtak
Assessment Year: 2011-12
Case Filed On: 2020-09-09
Order Type: Final Tribunal Order
Date of Order: 2022-11-16
Date of Pronouncement: 2022-11-16
This appeal by the assessee is directed against the order dated 27.01.2020 of the learned Commissioner of Income Tax (Appeals), Rohtak, for the assessment year 2011-12. The primary issue in this case is the addition of Rs. 7,50,000/- sustained by the CIT(A) as undisclosed income.
Tejpal Singh, the appellant, is a resident individual. Based on AIR information available on record, the Assessing Officer (AO) found that during the year under consideration, the appellant had deposited cash amounting to Rs. 10,50,000/- in his savings bank account with the State Bank of India. The AO was of the view that the appellant had not offered the aforesaid income to tax, resulting in the escapement of income. Consequently, the AO reopened the assessment under section 147 of the Act.
During the assessment proceedings, the AO called upon the appellant to furnish necessary evidence to explain the nature and source of the cash deposits in the bank account. Allegedly, the appellant did not respond to the notices issued under sections 148 and 142(1) of the Act. Therefore, the AO proceeded to complete the assessment ex parte to the best of his judgment by invoking the provisions of section 144 of the Act. The AO added back the amount of Rs. 10,50,000/- as income from undisclosed sources.
Contesting the addition, the appellant preferred an appeal before the learned Commissioner (Appeals). During the proceedings before the first appellate authority, the appellant furnished an explanation and supporting evidence to explain the source of the cash deposits. Partly accepting the appellant’s explanation, the learned Commissioner (Appeals) granted relief to the extent of Rs. 3,00,000/- and sustained the addition for the balance amount of Rs. 7,50,000/-.
The appellant’s counsel, Ms. Rano Jain, Advocate, restricted her arguments on the merits of the addition sustained of Rs. 7,50,000/- by the learned Commissioner (Appeals). The primary grounds of the appeal were:
The ITAT, comprising Shri Saktijit Dey, Judicial Member, heard the case on 25.08.2022 and pronounced the order on 16.11.2022. The Tribunal observed the following:
Based on the material placed on record, the appellant had claimed that an amount of Rs. 4,50,000/- was received towards the sale consideration of an old car sold to one Shri Satish Kumar. The appellant furnished a copy of the registration certificate of the vehicle in the name of Shri Satish Kumar, his Aadhar Card, and a delivery receipt confirming the purchase. A cash receipt evidencing payment of sale consideration of Rs. 4,50,000/- was also provided. These evidences, prima facie, established the appellant’s claim of receiving Rs. 4,50,000/- towards the sale consideration of the old car.
Regarding the appellant’s claim of receiving a gift of Rs. 2,00,000/- from his brother, the learned Commissioner (Appeals) allowed a gift to the extent of Rs. 50,000/-. The appellant also claimed that the balance amount was out of earlier withdrawals, for which the learned Commissioner (Appeals) allowed a benefit to the extent of Rs. 2.5 lacs.
Upon perusal of the cash flow statement and other supporting documents, the Tribunal found that the appellant’s explanation regarding the source of cash deposits in the bank account was believable. The part addition sustained by the learned Commissioner (Appeals) appeared to be purely on conjecture and surmises without any substantial reason for not accepting the appellant’s explanation in entirety.
In conclusion, the Tribunal deleted the addition of Rs. 7,50,000/- sustained by the learned Commissioner (Appeals). The appeal by Tejpal Singh was allowed to the extent indicated above.
Order signed by:
[SAKTIJIT DEY] – JUDICIAL MEMBER
Date: 16.11.2022
Location: Delhi
ITA 1572/DEL/2020: Tejpal Singh vs ITO Ward-5, Rohtak – Dispute over Cash Deposits in Bank Account
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