Tribunal overturns CIT(A) decision, directs deletion of Rs. 15 lakh addition

The Tribunal allowed the appeal, overturning the Ld. CIT(A)'s decision and directing the deletion of the Rs. 15 lakhs addition. The Tribunal accepted the detailed submissions and purchase bills provided by the non-resident individual, emphasizing the substantiated explanation and confirmation from the purchasing party, M/s. Raj Coffee Curing Works. Despite delays in responses and challenges to the source of funds, the Tribunal found in favor of the assessee, highlighting the necessity to deposit cash post-demonetization and the lack of evidence discrediting the explanation.

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Issues:
1. Addition of Rs. 15 lakhs as cash deposited during demonetization period.

Analysis:
1. The assessee, a non-resident individual, deposited Rs. 15 lakhs during demonetization, attributing it to the sale proceeds of coffee seeds to M/s. Raj Coffee Curing Works. However, the AO disbelieved the claim due to meager declared agricultural income and sale of agricultural land. The Ld. CIT(A) upheld the addition under section 69 of the Act, leading to the appeal before the Tribunal.

2. The Ld. AR argued that the assessee provided detailed submissions and purchase bills to support the claim, emphasizing the non-resident status of the assessee during the relevant year. The response from M/s. Raj Coffee Curing Works, confirming the purchase of coffee seeds, was submitted post-assessment due to postal delays. Citing the decision in CIT Vs. Smt. P K Noor Jahan, the Ld. AR contended that the explanation should be accepted, as there was no scope for generating undisclosed income as a non-resident.

3. The Ld. DR countered, questioning the logic of the explanation given by the assessee, especially regarding the timeline of retaining coffee seeds post the sale of agricultural land. The application of the decision in the case of P K Noor Jahan was contested, urging the sustenance of the addition due to inadequate source explanation. Referring to the decision in Pavittar Singh Vs. CIT, the Ld. DR argued for upholding the AO's decision.

4. Upon review, the Tribunal noted the confirmation of the sale of coffee seeds by M/s. Raj Coffee Curing Works, supported by purchase invoices. Acknowledging the delay in response to the AO's notice, the Tribunal considered the non-resident status of the assessee and the necessity to deposit cash post-demonetization. Given the lack of additional evidence to discredit the explanation, the Tribunal concluded in favor of the assessee, directing the deletion of the Rs. 15 lakhs addition.

5. In conclusion, the Tribunal allowed the appeal, setting aside the Ld. CIT(A)'s order and instructing the AO to remove the disallowance of Rs. 15 lakhs, emphasizing the substantiated explanation provided by the assessee and the confirmation from the purchasing party.

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