Tribunal overturns tax additions, approves appeal due to representative's sickness. Cash deposits explained.

The tribunal allowed the appeal, deleting all additions made by the AO and confirmed by the CIT(A). The delay in filing was condoned due to the authorized representative's sickness, and the appeal was admitted. The tribunal accepted explanations for cash deposits of Rs. 5,00,000 from agricultural income and Rs. 30,75,000 and Rs. 6,75,000 from land sale proceeds, overturning AO and CIT(A) decisions. As the additions were deleted on merits, the legal ground regarding Section 68 was not addressed. The decision was pronounced on 26th March 2021.

---

---

Issues Involved:
1. Condonation of Delay
2. Addition of Rs. 5,00,000
3. Addition of Rs. 30,75,000
4. Addition of Rs. 6,75,000
5. Legal ground regarding Section 68

Condonation of Delay:
This appeal was filed with a delay of 36 days due to the sickness of the authorized representative. The tribunal heard both parties and found no malafide intention behind the delay. Consequently, the delay was condoned, and the appeal was admitted.

Addition of Rs. 5,00,000:
The assessee deposited Rs. 5,00,000 in cash on 13.07.2013. The source was claimed to be agricultural income from a mango garden of 16 acres, owned by the assessee and family members. The assessee provided pattadar passbooks as evidence. The AO did not accept the explanation due to the absence of corroborative evidence and the fact that the amount was not transferred back to the family members. The CIT(A) upheld the AO's decision. However, the tribunal found that the AO did not dispute the ownership of the agricultural land or the potential income from it. The AO also failed to examine the family members. The tribunal concluded that the source of the cash deposit was adequately explained and deleted the addition.

Addition of Rs. 30,75,000 and Rs. 6,75,000:
The assessee deposited Rs. 30,75,000 on 28.12.2013 and Rs. 6,75,000 on 13.01.2014, claimed to be from the sale proceeds of land. The AO found discrepancies in the dates of payment and deposit as per the sale deed and vendor's bank account withdrawals. The AO disbelieved the receipts and added the amounts as unexplained cash credits under Section 68. The CIT(A) confirmed this, viewing the rectification deed provided by the assessee as an afterthought. The tribunal noted that the vendor confirmed the payments and a rectification deed was registered, which is a valid piece of evidence. The tribunal found no reason to disbelieve the assessee's explanation, especially since the AO did not examine the vendor. The tribunal deleted the additions.

Legal Ground Regarding Section 68:
The assessee argued that the AO erred in invoking Section 68 for unexplained cash deposits. Since the tribunal deleted the additions on merits, it did not find it necessary to adjudicate this legal ground.

Conclusion:
The tribunal allowed the appeal, deleting all the additions made by the AO and confirmed by the CIT(A). The decision was pronounced in open court on 26th March 2021.

---