Sonam Tshering Bhutia Vs ITO (ITAT Kolkata)
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) heard the assessee’s appeal against the order of the National Faceless Appeal Centre (NFAC) for Assessment Year 2017-18.
At the outset, the Tribunal condoned a delay of 100 days in filing the appeal after finding sufficient cause in the affidavit submitted by the assessee.
The assessee, a resident individual, was selected under Operation Clean Money (OCM) because cash deposits of ₹17,85,000 had been made in the bank account during the demonetisation period and no return of income had been filed for Assessment Year 2017-18. Despite issuance of notice under Section 142(1) and opportunities granted during assessment proceedings, there was no compliance. The Assessing Officer completed the assessment under Section 144 and made an addition of ₹56,73,199 as unexplained money under Section 69A of the Income-tax Act.
On appeal, the CIT(A) called for a remand report from the Assessing Officer. During the remand proceedings, the assessee furnished a cash flow statement, cash withdrawal statement, cash book and other documents. After considering the remand report and the material produced, the CIT(A) deleted a substantial part of the addition but sustained an addition of ₹17,85,000.
Before the Tribunal, the assessee contended that the sustained addition represented cash generated from the sale of two plots situated in the State of Sikkim. The assessee relied upon two registered sale deeds, one recording consideration of ₹10,50,000 and the other ₹10,00,000. It was submitted that both registered documents reflected the consideration amounts, dates of cash payments, signatures of the purchasers and sellers and registration before the Sub-Registrar, Gangtok, Sikkim. According to the assessee, the cash had been received between March and May 2016 and was retained because there was an intention to purchase another parcel of land near Gangtok. Since the proposed purchase did not materialise due to demonetisation, the cash was subsequently deposited into the bank account.
