2023 (12) TMI 53 - AT - Income Tax

Assessee's explanation for cash deposits accepted after providing affidavits from family members who sold land

ITAT Jodhpur allowed the assessee's appeal regarding undisclosed cash deposits. The assessee claimed gifts from grandmother and father who sold land, ... Undisclosed income - undisclosed cash deposits - information regarding cash deposited by the assessee in his bank account - onus to prove - assessee submitted to have received gift from his grand-mother and from his father who had sold some land during the year - HELD THAT:- In the case under consideration, the facts are identical to the case of Parimisetti Seetharamamma vs Commissioner Of Income- Tax [1965 (4) TMI 21 - SUPREME COURT] - in the case under consideration, assessee claimed that he had received gift from grand-mother and filed affidavit of grand-mother, therefore, the onus shifted on the department. The department has not brought on record any evidence to establish that facts mentioned in the affidavits were not true and hence, the income was taxable therefore, in these facts and circumstances of the case, we are of the opinion that assessee had explained source of cash deposits made in the assessment order. Ground of the assessee is allowed. Issues Involved:1. Legality of the order passed by the Income Tax Officer and sustained by the Commissioner of Income Tax (Appeals).2. Failure to cross-examine the contents of the affidavit submitted during the appeal.3. Failure to appreciate evidence and additional submissions.4. Request for awarding costs due to non-compliance with the law.5. Alleged breach of judicial decorum and discipline.6. Consideration of double entry and bank certificate.7. Explanation of the bank deposit.8. Legality of reopening the assessment under sections 147/148.9. Legality of charging interest.Summary:Issue 1: Legality of the OrderThe assessee contended that the order passed by the Income Tax Officer and sustained by the Commissioner of Income Tax (Appeals) was illegal, against the law, and without application of mind. The tribunal did not specifically adjudicate this issue but addressed the related issues in its findings.Issue 2: Cross-Examination of AffidavitThe Commissioner of Income Tax (Appeals) failed to cross-examine the contents of the affidavit submitted by the assessee. The tribunal noted that the CIT(A) merely rejected the affidavits without proper investigation or asking for further clarification, which was considered inappropriate.Issue 3: Appreciation of EvidenceThe assessee argued that the CIT(A) failed to appreciate the evidence and additional submissions. The tribunal observed that the CIT(A) did not properly consider the affidavits and other evidence provided by the assessee, which demonstrated the source of cash deposits.Issue 4: Awarding CostsThe assessee requested costs due to the CIT(A)'s failure to follow the law. The tribunal concluded that it was not a fit case to levy costs, as the issue was one of interpretation rather than non-consideration of evidence.Issue 5: Judicial Decorum and DisciplineThe assessee claimed that the order was against judicial decorum and discipline. The tribunal did not specifically address this issue but focused on the handling of evidence and affidavits.Issue 6: Double Entry and Bank CertificateThe tribunal found that the State Bank of India admitted a technical error causing a double entry of Rs. 5,00,000/-. The actual deposit was only Rs. 5,00,000/-, and the tribunal directed the AO to delete the addition of Rs. 5,00,000/-.Issue 7: Explanation of Bank DepositThe assessee explained the deposit as gifts from his grandmother and proceeds from the sale of land by his father. The tribunal held that the department did not provide evidence to disprove the affidavits and explanations, thus accepting the assessee's explanation.Issue 8: Legality of Reopening AssessmentThe assessee did not press this ground during the hearing, and it was dismissed as not pressed.Issue 9: Charging of InterestThe tribunal dismissed this ground as consequential and did not provide specific findings on the legality of charging interest.Conclusion:The tribunal allowed the appeal of the assessee partly, directing the deletion of the Rs. 5,00,000/- addition and dismissing other grounds as academic or not pressed. The order was pronounced on 10th August 2023.