Source of cash deposit being sales proceeds of household items upon sale of flat was held plausible and addition u/s 69A deleted by ITAT
In a recent judgment, ITAT Chennai has held that source of cash deposit being sales proceeds of household items upon sale of flat was plausible. The Assessee could not have obtained any further confirmations of buyers in the manner as requisitioned by the AO or ensure their attendance
ABCAUS Case Law Citation:
5111 (2026) (04) abacus.in ITAT
Important Case Laws relied upon by Parties:
Prem Singh and Ors vs Birbal and Ors (2006) 5 SCC 353,
In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming additions made by the AO by way of unexplained monies u/s 69A of the Income Tax Act, 1961 (the Act).
The appellant assessee had sold her apartment and bought a new one. The assessee had also separately disposed of imported household utensils, electronic items etc. of her apartment in cash.
The case of the assessee was selected for scrutiny. When the assessee was asked to provide the nature and source of the cash deposited in bank, the assessee had furnished confirmations from her husband & daughter as gift, which was deposited in her bank account. These gifts were accepted by the AO. In respect of the balance amount, the assessee explained that, portion of it represented the cash received upon sale of her flat i.e. and the balance was represented by the proceeds from sale of expensive imported house-hold utensils, electronic gadgets, etc., which she had to dispose of in the event of her selling her apartment. The assessee also provided the details of the purchasers along with the relevant bills and invoices in support of the same.
The AO however disbelieved the explanation of the assessee, on the ground that the assessee was unable to furnish confirmations from the purchasers of the household goods and that summons sent to five out of eight parties had returned un-served.
The Tribunal observed that the individual value of household goods sold to the vendors, was less than Rs.2,00,000/- and therefore the assessee was under no obligation to obtain and retain their PAN details in terms of Rule 114B of the Income Tax Rules, 1962.
The Tribunal further noted that the sales were supported by the relevant bills and vouchers and the surrounding facts and circumstances also justified the quantum of such sales, as she had to dispose them off upon sale of her flat.
The Tribunal noted that as explained, these vendors who had purchased these items and household effects generally deal in cash and that the assessee did not have any continuing relationship with them, basis which she could have obtained any further confirmations in the manner as requisitioned by the AO or ensure their attendance of summons.
In the overall facts and circumstances, the ttt held that the explanation furnished by the assessee regarding the proceeds derived on sales of household items, electronic appliances and gadgets was found to be plausible.
Accordingly, the Tribunal held that the action of the AO in adding the same as unexplained monies was unjustifiable. Therefore, the addition made u/s 69A of the Act can’t be sustained and was directed to be deleted.
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