Gajendra Yadav, GHAZIABAD V. ITO WARD - 1(2), GHAZIABAD

ITA 8556/DEL/2019

AI Insights

The case involves an appeal by Gajendra Yadav against the order of the Commissioner of Income-Tax (Appeals), Ghaziabad, which confirmed the addition of Rs.57,00,000 to the assessee's income as unexplained investment under Section 69 of the Income-Tax Act, 1961. The addition was initially made by the Assessing Officer after reopening the assessment under Section 147, based on information that the assessee had deposited a substantial amount of cash in his bank account. The assessee argued that the deposits were made by his father from the sale proceeds of ancestral land. The Tribunal found that the issue had not been properly examined at the assessment stage or by the first appellate authority and thus restored the matter to the Assessing Officer for a detailed factual verification.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 300809 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-11-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2019
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Section: 147; 69; 148; 144; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA No.8556/Del/2019 Assessment Year: 2010-11 Gajendra Yadav, S/o. Shri Jaipal Singh, 201 near GAIL, Village: Shahpur, Bamhera, Ghaziabad. Vs. ITO, Ward -1(2), Ghaziabad. PAN :ACYPY0810E (Appellant) (Respondent) ORDER This is an appeal by the assessee against order dated 08.08.2019 of learned Commissioner of Income-Tax (Appeals), Ghaziabad for the assessment year 2010-11. 2. Though, the assessee raised grounds both on the issue of validity of the assessment order passed under Section 144 read with section Assessee by S/Shri Somil Agarwal & Deepesh Gard, Adv. Respondent by Shri Toufel Tahir, Sr. DR Date of hearing 22.11.2022 Date of pronouncement 28.12.2022 2 ITA No.8556/Del/2019 147 of the Act as well as merits of the addition made of Rs.57,00,000. However, at the time of hearing, he restricted his arguments only on the merits of the addition made of Rs.57,00,000 under Section 69 of the Income-Tax Act, 1961. 3. Briefly the facts are, the assessee is a resident individual. Based on AIR information indicating that in the year under consideration, the assessee had deposited cash amounting to Rs.57,00,000 in his savings bank account maintained in Dena Bank, the Assessing Officer formed a belief that income chargeable to tax has escaped assessment. Accordingly, he reopened the assessment under Section 147 of the Act. As alleged by the Assessing Officer, the assessee did not comply with the notices issued under Section 148 as well as 142(1) of the Act. Therefore, due to repeated non-compliance by the assessee, the Assessing Officer proceeded to complete the assessment to the best of his judgment by invoking the provisions of section 144 of the Act. While doing so, in absence of any explanation from the assessee regarding source of cash deposit in the bank account, the Assessing Officer treated it as unexplained investment under Section 69 of the Act and added back to the income of the assessee. The assessee 3 ITA No.8556/Del/2019 contested the aforesaid addition before learned Commissioner (Appeals). For explaining the source of cash deposit, the assessee furnished certain additional evidences before learned Commissioner (Appeals). After getting the additional evidences examined through the Assessing Officer and perusing the report of the Assessing Officer, learned Commissioner (Appeals) ultimately did not find any merit in the submission of the assessee. Accordingly, he confirmed the addition. 4. Before me, learned counsel appearing for the assessee submitted that the savings bank account in Dena Bank is jointly held by the assessee with his father. He submitted, assessee’s father Shri Jai Pal Singh was joint holder of ancestral agricultural land. He submitted, in the year under consideration, assessee’s father along with his brother sold a plot of land and received total sale consideration of Rs.80,00,000 comprising of cash component of Rs.30,00,000 and cheque of Rs.50,00,000. He submitted, amount received in cash was deposited by assessee’s father in the joint account. He submitted, assessee’s father and his brother entered into an agreement to sell with another person for sale of another plot of land and received advance of 4 ITA No.8556/Del/2019 Rs.35,00,000. He submitted, the said amount was also deposited in the bank account. In this context, he drew my attention to copies of sale deed and agreement to sell placed in the paper book. Thus, he submitted, source of cash deposit was duly explained by the assessee with supporting evidence. However, he submitted, without properly appreciating the evidences brought on record, learned Commissioner (Appeals) has confirmed the addition. He submitted, since, the assessee did not get opportunity before the Assessing Officer and the evidences furnished at the first appellate stage were not properly examined, the issue may be restored back to the Assessing Officer for fresh adjudication after verifying the evidences. Learned Departmental Representative agreed for restoration of the issue to the Assessing Officer. 5. I have considered rival submission and perused the material available on record. 6. Undisputedly, in course of assessment proceedings, the assessee failed to appear and explain the source of cash deposits in the bank account. However, before the first appellate authority, the assessee did appear and furnish additional evidences to explain the source of cash 5 ITA No.8556/Del/2019 deposits. Undisputedly, the savings bank account in Dena Bank wherein the cash deposits were found is held jointly by the assessee along with his father Shri Jai Pal Singh. It is the case of the assessee before the first appellate authority as well as before me that the cash deposits of Rs.57,00,000 was made by his father out of the sale- proceeds received in cash in respect of an ancestral plot of land held jointly by his father along with his brother and advance received from another person by virtue of an agreement to sell for sale of another plot of land jointly held by his father along with his brother. 7. Apparently, learned Commissioner (Appeals) has disbelieved assessee’s claim. However, on perusal of sale deed dated 13.11.2009, a copy of which is placed in the paper book, it is observed that assessee’s father along with his brother had sold a plot of land and received sales consideration of Rs.80,00,000 out of which an amount of Rs.50,00,000 was received through cheque and Rs.30,00,000 in cash. It is the contention of the assessee that the entire cash component of Rs.30,00,000 was taken by his father Shri Jai Pal Singh and deposited in the bank account jointly held with father. It is further observed, assessee’s father along with his brother entered into an 6 ITA No.8556/Del/2019 agreement to sell with another person on 24.11.2009 and received advance in cash amounting to Rs.35,00,000, which according to the assessee was deposited by his father in the very same joint account. A copy of agreement to sell dated 24.11.2009 has also been placed on record. However, on a query from Bench, learned counsel for the assessee submitted that the agreement to sell ultimately did not fructify and the amount was returned back to the concerned person. From the documents placed on record, including, the sale deed and agreement to sell, there appears to be some truth in the claim of the assessee. However, assessee’s claim needs proper factual verification, which has not been made either at the assessment stage or by the first appellate authority. On perusal of remand report of the Assessing Officer furnished at the first appellate stage, it is observed that he has not made any inquiry with regard to assessee’s claim that the cash deposits were made by his father out of the cash available from transactions relating to sale of land. No inquiry has been made with assessee’s father to ascertain the veracity of assessee’s claim. 8. In view of the aforesaid, I am inclined to restore the issue to the Assessing Officer for factually verifying assessee’s claim after making 7 ITA No.8556/Del/2019 proper inquiry, if necessary, even with assessee’s father for ascertaining the correctness of assessee’s claim that the cash deposits were made by his father from consideration received towards sale of land. 9. Needless to mention, assessee must be provided due opportunity of being heard before deciding the issue. 10. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 28 th December, 2022. Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER Dated: 28 th December, 2022. Mohan Lal Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi