Shashi Vasant Shastri Vs ACIT (annual)
Can every amount credited to Bank Account or reflecting in the Annual Information System (AIS) be taxed as Income ? The answer is a clear ‘No’- yet, in prcatice , this fundamental principle is often overlooked.
The Nagpur Branch of the Tribunal in Shashi Vasant Shastri v. ACIT, Central (2026) (ITA NO. 360 (NAG) 2025/ AY 2013-14,order dated 27 March 2026, reaffirmed that mere receipt of money, without it bearing the the character of income- cannot be brought to tax under the Income Tax Act.
Facts of the case:
- The assessee entered into an Agreement to Sale dated 14.02.2013 with an educational society for a total consideration of about Rs. 3.80 crores.
- An advance of Rs. 94.76 lakhs was received (about Rs. 17 lakhs by cheque and about Rs. 77.76 lakhs in cash).
- The buyer (education society) failed to fulfil payment terms ; consequently , the sale deed was never executed.
- The assessee had not filed a return for FY 2013-14.
- Based on Investigation Wing input , reassessment proceedings were initiated under section 147.
The AO completed reassessment under section 143(3) r.w.s. 147 and treated the amount of about Rs. 94.76 lakhs received by the assessee as taxable under the head ‘Income from Other Sources’.
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