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TMI Blog2025 (2) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of advance from Mr. Chandra Kaladhar Reddy on account of proposed sale of immovable property owned by the assessee as it was evident from the payment made out of the said amount of Rs. 1,0,00,000/- for purchase of two immovable properties for a total sum of Rs. 1,62,43,992/- for which the payment was made immediately from the same bank account and share of Mr. Chandra Kaladhar Reddy was a sum of Rs. 1,21.33,185/- and for assessee it was only a sum of Rs. 41.10,807/- and assessee's own investment in purchase was a sum of Rs. 28.66,815/-. The explanation furnished by the assessee is supported by documentary evidence and is plausible, therefore, has been wrongly rejected by the AO and CIT(A) just for making and upholding the addition. b) Ld. CIT(A) has failed to appreciate that the other amount of Rs. 72,48,000/- (amount of cash deposits being Rs. 2,22,48,000/- (-) Rs. 1,50,00,000/- being received from Mr. Chandra Kaladhar Reddy) was nothing but was either from cash withdrawals from the bank accounts or own savings of the assessee for which also the proper explanation was furnished and the same has been wrongly rejected by the AO and CIT(A). c) That Ld. CIT(A) has faile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard. 5. That under the facts and circumstances of the case. Ld. CIT(A) has erred in law as much as in fact in upholding the addition of Rs. 12,45,000/- comprising of Rs. 10,00.000/- being on account of alleged unaccounted commission received from KR Shelters Pvt. Ltd. and also a sum of Rs. 2,4.000/-. The addition is prayed to be deleted. 6. That under the facts and circumstances of the case. Ld. AO has erred in law as much as in fact in levying interest under section 234A. 2343. and 234C of the Act. 7. That appellant craves to leave, alter, amend or modify the grounds of appeal before or during the hearing of the appeal. 8. That each ground is independent and without preju dice to ether." 3. The interconnected issue raised by the assessee vide ground Nos. 1 to 4 is that the learned CIT(A), erred in confirming the addition of cash deposit in the banks aggregating to Rs. 2,22,48,000/- as unexplained under section 68 of the Act. 4. The facts, in brief, are that the assessee is an individual earning income under the heads of salary, house property, business, and other sources. The case of assessee was selected for scrutiny under CASS due to cash deposits in a bank. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s share of the property cost amounted to Rs. 41,10,807/-, while Shri Chandra Kaladhara Reddy's share stood at Rs. 1,21,33,185/-. Therefore, out of the Rs. 1.5 crore received from Shri Chandra Kaladhara Reddy, Rs. 1,21,33,185/- was refunded through payment towards the purchase cost of the new property, leaving a balance of Rs. 28,66,815/-. 11. As Shri Chandra Kaladhara Reddy had agreed to retain Rs. 37 lakh as an advance for the future purchase of the assessee's property, but only Rs. 28,66,815/- remained from the original advance, Shri Chandra Kaladhara Reddy made an additional cash payment of Rs. 8,33,185/- to fulfill the agreed advance amount. This additional cash payment was subsequently utilized for making cash deposits in Andhra Bank amounting to Rs. 7 lakhs over time. 12. Based on the above explanation, the assessee contended that the cash deposit of Rs. 1.57 crore in Andhra Bank during the year was duly explained. 13. Regarding the cash deposits of Rs. 13 lakh in Chartered Sahakari Bank and Rs. 52.48 lakh in Karnataka Apex Cooperative Bank, the assessee argued that these deposits were made from withdrawals from different bank accounts held by him as well as personal savin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were made on 17.09.2013, 2.11.2013 and 05.03.2014 in amounts of Rs. 1,00,000/- Rs. 1,00,000/- and Rs. 5,00,000/- respectively. As per the AO's Remand Report, the appellant has not given any details in the submission. However, the appellant has stated that explanation is already provided in para 11 of the written submission. On perusal of the said submission, it is seen that the source of the same is cash of Rs. 8,33,185/- received from same Mr. Chandra Kaladhara Reddy. No explanation regarding the source of Mr. Chandra Kaladhara Reddy has been given by the appellant. Therefore, the explanation is not acceptable and the addition made by the AO is sustained. 12.5 The appellant has explained that there is a mistake in AO's order regarding the amount of cash deposit in Chartered Sahakari Co-op. Bank. The cash deposit is mentioned as Rs. 52,48,000/- which is actually Rs. 13,00,000/- whereas the cash deposit of Rs. 52,48,000/- pertains to account in Karnataka State Apex Co-op. Bank. The AO has agreed with this in the Remand Report. 12.6 Deposit of Rs. 52,48,000/- in Karnataka State Apex Co-op. Bank and Rs. 13,00,000/- in Chartered Sahakari Co-op. Bank: It is submitted that depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. 17.4 The learned AR also emphasized that a significant portion of the cash deposits was immediately utilized for the purchase of property, which substantiated the genuineness of the source of funds. 17.5 Additionally, the assessee challenged the addition of Rs. 7,00,000/- in Andhra Bank, arguing that a proper explanation had been provided but was disregarded by the authorities. Similarly, with respect to the deposits of Rs. 52,48,000/- in Karnataka State Apex Co-operative Bank and Rs. 13,00,000/- in Chartered Sahakari Co-operative Bank, the assessee asserted that these amounts originated from prior withdrawals, a claim that had not been disproved by the revenue authorities. Therefore, the assessee argued that treating these deposits as unexplained was unjustified. 17.6 On the contrary, the learned DR before us submitted that it is the onus upon the assessee to justify the source of cash deposit in the bank based on the documentary evidence. There is no document furnished by the assessee that the cash of Rs. 1,57,00,000.00 was received from Shri Chandra Kaladhara Reddy. Likewise, there is no detail furnished by the assessee that the cash withdrawal on the earlier occasion was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal use but were instead utilized for a property transaction in which Shri Chandra Kaladhara Reddy was the primary beneficiary. 18.4 The fact that the money was used for the stated purpose, as corroborated by official sale-purchase documents, validates the genuineness of the assessee's explanation. Therefore, in our considered opinion, no addition to the extent of Rs. 1,21,33,185/- should be made in the hands of the assessee concerning the cash deposit of Rs. 1.5 crore for the reasons stated above. 18.5 With regard to the question raised by the AO and the learned CIT(A) regarding why the entire amount was not returned, it is noted that the assessee explained that, as per the new proposal, Shri Chandra Kaladhara Reddy agreed to purchase the assessee's property in the future and that an advance of Rs. 37 lakh was agreed upon. After adjusting Rs. 1,21,33,185/- from the initial advance of Rs. 1.5 crore, only Rs. 28,66,815/- remained with the assessee. Since the agreed advance amount was Rs. 37 lakh, Shri Chandra Kaladhara Reddy subsequently made an additional cash payment of Rs. 8,33,185/-, which was later utilized for making a cash deposit of Rs. 7 lakh on subsequent occasions. 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deposit in the impugned bank accounts. Given these facts and circumstances, we are inclined to set aside order of the learned CIT-A with the direction to the AO to delete the addition made by him on account of cash deposits in the bank. Accordingly, the assessee's grounds of appeal concerning the additions made on account of cash deposits in Chartered Sahakari Co-operative Bank and Karnataka Apex Co-operative Bank are hereby allowed. 20. The next issue raised by the assessee is that the learned CIT(A) erred in confirming the addition of Rs. 12.45 Lakh. 21. During the assessment proceedings, the AO observed that the assessee's bank account with Andhra Bank was credited with Rs. 10 lakh from M/s KR Shelter on account of commission, which was not offered to tax. Similarly, the Andhra Bank account was credited with Rs. 2.45 lakh as interest income, which was also not disclosed for tax purposes. Consequently, the AO added Rs. 12.45 lakh to the total income of the assessee. 22. On appeal, the learned CIT(A) upheld the addition made by the AO. 23. Aggrieved by the order of the learned CIT(A), the assessee has filed the present appeal before ITAT. 24. The learned AR before us submit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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