Case Law Details
Gagandeep Singh Bakshi Vs ITO (ITAT Pune)
ITAT Pune held that addition on account of cash deposits unsustainable as reasonable and plausible explanation given by the assessee.
Facts- The appellant is an individual deriving income under the head “salaries”, “capital gain” and “income from other sources”. ROI for A.Y. 2014-15 was filed on 02.07.2014 declaring total income of Rs.6,66,050/-. Against the said ROI, the assessment was completed ex-parte by the Assessing Officer passed u/s 144 of the Income Tax Act, 1961 after making addition on account of unexplained cash deposits in the bank account of assessee of Rs.20,00,000/- and capital gains on sale of property of Rs.33,84,000/-.
Conclusion- It is evident there is no material to disbelieve the explanation given by the assessee and, therefore, the explanation tendered by the assessee cannot be said to be unreasonable and is a plausible explanation. Therefore, we do not see any reason to reject the explanation of the assessee. In the circumstances, we are of the considered opinion that the ld. CIT(A) ought not to have rejected the explanation of the assessee. Therefore, we direct the Assessing Officer to delete the addition of Rs.15,00,000/- made on account of cash deposits.
FULL TEXT OF THE ORDER OF ITAT PUNE
This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)- 1, Pune [‘the CIT(A)’] dated 13.03.2019 for the assessment year 2014-15.
2. Briefly, the facts of the case are that the appellant is an individual deriving income under the head “salaries”, “capital gain” and “income from other sources”. The Return of Income for the assessment year 2014-15 was filed on 02.07.2014 declaring total income of Rs.6,66,050/-. Against the said return of income, the assessment was completed ex-parte by the Income Tax Officer, Ward- 4(1), Pune (‘the Assessing Officer’) vide order dated 19.12.2016 passed u/s 144 of the Income Tax Act, 1961 (‘the Act’) after making addition on account of unexplained cash deposits in the bank account of assessee of Rs.20,00,000/- and capital gains on sale of property of Rs.33,84,000/-.
3. Being aggrieved by the above assessment order, an appeal was filed before the ld. CIT(A). During the course of proceedings before the ld. CIT(A), the appellant filed explanation in support of the sources of the cash deposits of Rs.20,00,000/-. It was also submitted that the cash deposits of Rs.20,00,000/- was made out of cash withdrawal from the father’s bank account of the appellant of Rs.15,00,000/- and cash of Rs.3,00,000/- was received on sale of property. The appellant also filed the bank statement of his father, Shri Balwant Singh Bakshi held in Punjab and Sind Bank, Dehradun and filed the confirmation from his father. Considering this evidence, the ld. CIT(A) rejected the explanation of receipt of cash from father of the appellant in the absence of any nexus.
However, the ld. CIT(A) accepted the explanation of the appellant in respect of Rs.3,00,000/- cash received from his father and benefit of Rs.2,00,000/- out of cash withdrawn of Rs.7,00,000/- and confirmed the balance addition of Rs.15,00,000/-.
As regards to the addition under the head “capital gains”, the appellant had filed the statement of computation of short term capital gains in respect of sale of property of Rs.7,27,500/-, the ld. CIT(A) had called for the remand report from the Assessing Officer, wherein, the Assessing Officer had accepted the computation of Rs.11,39,500/- by disallowing cost of improvement of Rs.4,12,000/-for want of evidence. Accordingly, the ld. CIT(A) confirmed the addition of Rs.11,39,500/- under the head “short term capital gains”.
4. Being aggrieved by the decision of the ld. CIT(A), the appellant is in appeal before us in the present appeal.
5. At the outset, there is a delay in filing of the present appeal by 1058 days. The order of the ld. CIT(A) was served on appellant on 12.04.2019. The appeal is required to be filed on or before 11.06.2019. However, the appeal was filed on 19.03.2022. The delay period from 15.03.2020 to 28.03.2022 was covered by the decision of the Hon’ble Supreme Court in the case of Cognizance for Extension of Limitation, In re (2022) 441 ITR 722 (SC) dated 10.01.2022, wherein, the limitation prescribed by various statutes was suo motu extended on account of difficulties faced by the citizens of the country on account of Pandemic Covid-19.
As regards to the delay in filing of the present appeal between 11.06.20019 to 15.03.2020, the appellant had filed the petition stating that the delay had occurred because of wrong advice given by the counsel. He also relied upon the certain judicial precedents in support of proposition that wrong advice given by the counsel can be considered a reasonable cause for delay.
6. Having regard to the explanation given by the assessee for condonation of delay, we are of the considered opinion that it is a fit case for condonation of delay. Accordingly, the delay is condoned. Now, we proceed to dispose of the appeal.
7. When the matter was called on, none appeared on behalf of the appellant-assessee despite due service of notice of hearing.
8. We heard the ld. Sr. DR and perused the material on record. Ground of appeal no.1 challenges the addition on account of cash deposits of Rs.15,00,000/- as confirmed by the ld. CIT(A). We had carefully gone through the explanation tendered by the appellant during the course of proceedings before the ld. CIT(A), which is extracted by the ld. CIT(A) in para 5 of his order. We also find that the ld. CIT(A) also extracted the entries in the bank statement of father of the appellant, wherein, cash withdrawals of Rs.18,00,000/-were shown. The appellant also filed the conformation letter from his father stating that he had given cash of Rs.15,00,000/- out of withdrawals made by him. It is evident there is no material to disbelieve the explanation given by the assessee and, therefore, the explanation tendered by the assessee cannot be said to be unreasonable and is a plausible explanation. Therefore, we do not see any reason to reject the explanation of the assessee. In the circumstances, we are of the considered opinion that the ld. CIT(A) ought not to have rejected the explanation of the assessee. Therefore, we direct the Assessing Officer to delete the addition of Rs.15,00,000/- made on account of cash deposits. Thus, the ground of appeal no.1 stands allowed.
9. Ground of appeal no.2 challenges the addition on account of cost of improvement of Rs.4,12,000/-, we find that the appellant had failed to produce any evidence in support of the cost of improvement. Accordingly, we confirmed the addition. Thus, the ground of appeal no.2 stands dismissed.
10. In the result, the appeal filed by the assessee stands partly allowed.
Author Bio
