Appeal granted for sourced deposit, upheld for unexplained credit.

The Tribunal partially allowed the appeal by deleting the addition of the unexplained fixed deposit of Rs. 35,00,000, as it was found to be sourced from the proceeds of a property sale, supported by documentation. However, the treatment of Rs. 25,06,000 as an unexplained cash credit was upheld due to insufficient evidence provided by the assessee regarding the source of the amount transferred. The decision was rendered on April 9, 2018, in Chennai.

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Issues:
1. Addition of unexplained fixed deposit of Rs. 35,00,000
2. Treatment of Rs. 25,06,000 as unexplained cash credit

Issue 1: Addition of unexplained fixed deposit of Rs. 35,00,000
The assessee, a salaried employee, disclosed an income of Rs. 2,06,500 but during assessment proceedings, it was found that the assessee had made a fixed deposit of Rs. 35,00,000. The Assessing Officer rejected the explanation provided by the assessee for the source of the deposit, leading to the addition of Rs. 35,00,000. The Commissioner of Income Tax (Appeals) upheld this addition, stating that the assessee failed to provide a credible source for the sum claimed to have been paid for purchasing the property which was sold. However, the Authorized Representative argued that the deposit was made from the proceeds of the property sale, as evidenced by the sale deed and bank statements. The Tribunal found that the sum credited in the assessee's bank account was from the property sale, and the fixed deposit was explained from the same source. Hence, the addition was deleted for the assessment year 2014-15.

Issue 2: Treatment of Rs. 25,06,000 as unexplained cash credit
The Assessing Officer treated Rs. 25,06,000 as an unexplained cash credit in the assessee's bank account. The assessee claimed that the amount was transferred by a Non-Resident relative, Shri. Bhuma Ramakrishna Reddy, residing abroad. The Commissioner of Income Tax (Appeals) rejected this explanation as the assessee failed to provide details about Shri. Bhuma Ramakrishna Reddy's whereabouts or his income source. The Authorized Representative argued that Shri. Bhuma Ramakrishna Reddy was closely related to the assessee and the amount was transferred from his bank account. However, the Tribunal upheld the lower authorities' decision, stating that the assessee did not provide sufficient evidence or details regarding the source of the cash credit. Therefore, the addition of Rs. 25,06,000 was deemed justified and the grounds were dismissed.

In conclusion, the Tribunal partly allowed the appeal of the assessee by deleting the addition of the unexplained fixed deposit of Rs. 35,00,000 but upheld the treatment of Rs. 25,06,000 as an unexplained cash credit. The order was pronounced on April 9, 2018, at Chennai.

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