Court/Forum: ITAT
Bench: Delhi Bench ‘B’, New Delhi, Sh. N. K. Billaiya, Accountant Member and Sh. Yogesh Kumar US, Judicial Member
Order Date: 2023-08-16
Outcome: Revenue
Sections: Section 68, Section 69
Additions cannot be deleted merely on technical grounds if the factual matrix is not commensurate with human probability.
The appeal of the assessee was dismissed, and the addition made by the AO under Section 68 was upheld by the ITAT.
Revenue
The central legal question was whether the addition under Section 68 was justified given that the assessee did not maintain any books of account and the cash was deposited in the bank account.
The assessee claimed that the cash deposits in her bank account were from the sale proceeds of land in Meghalaya, which were kept by her cousin since 1989. The AO questioned the genuineness of this claim and made an addition under Section 68.
The assessee argued that Section 68 does not apply as she does not maintain books of account and the source of cash was explained as sale proceeds of land.
The Revenue argued that the explanation provided by the assessee was not credible, and the manner of cash deposits was suspicious.
Section 68 - Unexplained cash credits; Section 69 - Unexplained investments.
The ITAT held that the peculiar facts of the case, including the unexplained delay and manner of cash deposits, did not justify any relief for the assessee, even if the AO mentioned Section 68 instead of Section 69.
No issues were explicitly left open or remanded.
Practitioners should ensure credible evidence is provided for cash deposits to avoid additions under Sections 68 or 69.
ITA No.3510/Del/2019 Assessment Year: 2007-08
Smt. Gloria Eugenia Rynjah Banerji, Beth-Eli Bungalow, B-16, Sector-30, Noida-201303 PAN No.AAJPB1084C Vs ITO Ward- 40 (2) New Delhi
Appellant by Sh. K. Sampath, Advocate Sh. V. Rajakumar, Advocate Respondent by Sh. Vivek Kumar Upadhyay, Sr DR
Date of hearing: 10/08/2023 Date of Pronouncement: 16/08/2023
This appeal by the assessee is preferred against the order of the CIT(A)-34, New Delhi dated 26.03.2019 pertaining to A.Y.2007-08.
2. The solitary grievance of the assessee is that the CIT(A) erred in confirming the addition made by the AO u/s. 68 of the Act amounting to Rs.2002801/-.
2 3. This is not the first round of litigation as in first round when the addition was made the CIT(A) deleted the addition and the revenue preferred an appeal before this Tribunal and this Tribunal in ITA No.316/Del/2012 restored the issue back to the files of the AO to decide the same in accordance with law.
4. In the fresh assessment proceedings the AR of the assessee furnished a copy of will which was different from what was filed in the first round of litigation. The AO questioned the genuineness of the will, the assessee replied as under : -
5. The assessee was further asked to explain the delay in sending the money to Delhi and why there were deposits in amounts less than Rs. 50,000/-. In so far as the first querry is concerned the assessee replied as under :-
3
5. In respect of the second querry it was replied that the bank charges, handling charges of cash deposit exceeding Rs.50,000/-, therefore, to avoid bank charges cash was deposited in amounts less than Rs.50,000/-. The explanation of the assessee did not find any favour with the AO who completed the assessment by making the addition of Rs.2002801/- u/s. 68 of the Act.
6. Assessee carried the matter before the CIT(A) but without any success.
7. Before us the Counsel for the assessee vehemently stated that the addition cannot be made u/s. 68 of the Act in as much as assessee does not maintain any books of account and the cash
4 was found to be deposited in the bank account, therefore, provisions of section 68 of the Act do not apply.
8. The Counsel reiterated that the amount of Rs.2002801/- emerged out of the sale proceeds of land at Meghalaya. It is the say of the Counsel that since the sources has been duly explained there is no reason for making the impugned addition.
9. The DR strongly supported the findings of the AO and read operative part of the assessment order.
10. We have given a thoughtful consideration to the orders of the authorities below. There is no dispute that some land was sold at Meghalaya in 1989 for a consideration of Rs.24.50 lacs. It is also not in dispute that the sale consideration was kept by the cousin brother of the assessee at Meghalaya. What is not understandable and is beyond the human probability that the brother of the assessee kept such a huge amount at Meghalaya since 1989 till 2006. It is also not understandable nor it has been proved before any authority including us as to how such a huge amount travelled in cash from Meghalaya to Delhi. The logic behind deposit of cash of Rs. 49,000/- each time in the bank account is also not justified. To sum up the factual matrix is not commensurate with the human probability. On such unbelievable facts the additions cannot be deleted merely on technical ground that the AO mentioned section 68 instead of section 69 of the Act.
5 The peculiar facts of the case discussed here in above do not justify any relief on this count.
11. We find no reason to interfere with the findings of the CIT(A). The appeal of the assessee is dismissed.
Order pronounced in the open court on 16.08.2023.
Sd/- Sd/-
Dated: .08.2023 *Neha* Copy forwarded to:
1. Appellant 2. Respondent 3. CITi
5. DR
Asst. Registrar ITAT, New Delhi