2023 (2) TMI 1407 - AT - Income Tax

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

Mrs. Usha Narayan Chaware, Legal heir of Late Narayan Dattatraya Chaware Versus ITO, Ward-4 (5), Pune

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 ... Addition u/s. 69A r.w.s. 115BBE - cash deposited by the assessee in his bank account during demonetization period - assessee submitted that he along with his brother sold certain agricultural land - AO refused to accept the source of cash deposit in bank account during demonetization period on the ground that the agricultural land was sold in 2013 and the cash was deposited in 2016. HELD THAT:- An admitted position that the assessee did sell its ancestral agricultural land in the year 2013 for a sum of Rs. 38.00 lakh along with his brother. The assessee’s share in such sale consideration was Rs. 19.00 lakh. The assessee submitted before the AO that his share of cash of Rs. 19.00 lakh was kept with his brother who was looking after the agricultural operations previously and both of them decided to purchase a new agricultural land in their joint name. Unfortunately, the brother passed away in the month of June, 2016 and his sister in law handed over his share of cash in the months of August and September, 2016, which was deposited in the bank account during November, 2016. The fact that the assessee along with his brother sold agricultural land for a sum of Rs. 38.00 lakh has not been denied by the AO. Once the availability of cash in hands was established and it was not shown by the AO that such cash was spent elsewhere, explanation of the assessee as to its utilization has to be accepted. Assessee also explained his monthly domestic expenses and also the sources thereof, which was also disputed by the AO - Assessee appeal allowed. 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.