Assessee wins appeal as cash deposits from ancestral land sale proceeds explained under sections 69A and 115BBE

ITAT Pune allowed the assessee's appeal against CIT(A)'s confirmation of Rs. 17 lakh addition under sections 69A and 115BBE for cash deposits during demonetization. The assessee explained the cash originated from his share of ancestral agricultural land sold in 2013 for Rs. 38 lakh, held by his brother until death in June 2016, then received from sister-in-law and deposited in November 2016. The Tribunal found the land sale undisputed and noted the AO failed to prove the cash was spent elsewhere or the explanation false. The addition was deleted as the availability of cash was established and its utilization satisfactorily explained.

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The ITAT Pune, per Vice President R.S. Syal, heard an appeal by the assessee against the CIT(A)'s confirmation of an addition of Rs. 17 lakh under section 69A read with section 115BBE of the Income Tax Act, relating to cash deposits made during the demonetization period. The Assessing Officer (AO) disbelieved the assessee's explanation that the cash originated from his share (Rs. 19 lakh) of ancestral agricultural land sold in 2013, noting the cash was deposited in 2016 and thus treating it as unexplained income.The Tribunal accepted that the sale of agricultural land for Rs. 38 lakh (shared with the brother) was undisputed and that the cash was held by the brother until his death in June 2016, after which the assessee received the cash from the sister-in-law and deposited it in November 2016. The AO failed to demonstrate that the cash was spent elsewhere or that the explanation was false. The assessee also satisfactorily explained monthly expenses and their sources.Holding that "once the availability of cash in hands was established and it was not shown by the AO that such cash was spent elsewhere, I am of the considered opinion that the explanation of the assessee as to its utilization has to be accepted," the Tribunal deleted the addition and allowed the appeal.

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