TaxTMI 
TaxTMI 
2026 (4) TMI 1537
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.... under section 143(2) dated 09.08.2018 was issued. Thereafter, notices under section 142(1) were issued from time to time calling for details, which were complied with by the assessee through e-proceedings. 3. The case was selected for limited scrutiny on the issues of (i) cash deposits and transaction in property, (ii) capital gain or loss on sale of property, and (iii) cash deposits during the demonetization period. During the course of assessment proceedings, the Assessing Officer observed that the assessee had deposited cash amounting to Rs. 20,36,500/- in her bank account and called upon her to explain the source thereof. A show cause notice dated 14.06.2019 was issued in this regard. 4. In response, the assessee submitted that she had sold a property situated in J.K. Tower to Shri Sanjay B. Devrukhkar and had received total sale consideration of Rs. 74,50,000/-, comprising Rs. 49,00,000/- through cheque and Rs. 25,50,000/- in cash. The assessee also furnished a promissory note purportedly executed by the purchaser acknowledging payment of cash in instalments. However, the Assessing Officer noted that notice issued under section 133(6) to the purchaser remained un-compli....
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..../- u/s 234D of the Income Tax Act, 1961." 7. During the course of hearing before us, the learned Authorised Representative (AR) submitted that the cash deposits made in the bank account were duly explained and were sourced out of the sale consideration received on transfer of immovable property. It was contended that the said transaction was fully disclosed by the assessee in the return of income filed for the year under consideration. 8. Inviting our attention to the relevant pages of the return of income placed in the paper book, the learned AR that the total sale consideration of the property was disclosed at Rs. 74,50,000/-. It was further pointed out that the assessee had also claimed deduction under section 54 of the Act amounting to Rs. 73,06,564/-, thereby evidencing that the transaction of sale of property and the consequential utilisation of funds had been duly reported in the return of income itself. The learned AR further explained that a part of the sale consideration was received in cash, which was subsequently deposited in the bank account during the period of demonetization. It was submitted that out of the said sale proceeds, the assessee had made a fixed dep....
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.... serious doubt on the genuineness of the assessee's explanation and supports the findings of the lower authorities. 11. In rejoinder, the learned AR submitted that the addition made by the Assessing Officer is factually incorrect and excessive. It was contended that the total cash deposit in the bank account was only to the extent of Rs. 20,00,000/-, whereas the Assessing Officer has made an addition of Rs. 25,50,000/- under section 68 of the Act without proper correlation. The learned AR further submitted that the assessee has no other source of income except interest income, which is duly reflected in the return of income. It was argued that in absence of any other source, the explanation of receipt of cash from sale of property remains the only plausible and substantiated source. It was further explained that the cash received on sale of property was kept by the assessee at home and, in view of the demonetisation announcement, the same was subsequently deposited in the bank account. 12. On the basis of the above submissions, the learned Authorised Representative contended that the source of cash deposits stands duly explained and the addition made under section 68 of the A....
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....er the purchaser. There is nothing on record to suggest that the contents of such confirmation were confronted, rebutted or subjected to any independent enquiry. In absence of any such verification or adverse material brought on record, the primary objection of the Assessing Officer regarding non-compliance to notice under section 133(6) cannot be sustained, particularly when subsequent confirmation from the purchaser was available and remained uncontroverted. 18. The Assessing Officer has rejected the explanation of the assessee primarily on the grounds that (i) the agreement value did not reflect the alleged cash component, (ii) the purchaser did not respond to notice under section 133(6), and (iii) the claim of receipt of cash was an afterthought. In our considered view, these findings cannot be sustained in light of the evidences placed on record and the manner in which such evidences have remained unexamined by the lower authorities. 19. Firstly, once the transaction of sale of property stands accepted and the entire sale consideration of Rs. 74,50,000/- has been duly disclosed in the return of income, coupled with the claim of deduction under section 54 of the Act, the ....