Unrelated person unlikely to give false affidavit to oblige assessee – ITAT deleted addition

Unrelated person unlikely to give false evidence to oblige the assessee, said ITAT deleting addition made for cash deposit on the strength of affidavit of lender.

ABCAUS Case Law Citation:
ABCAUS 2640 (2018) (11) ITAT

Important Case Laws Cited/relied upon:
Sonar Investment

The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) in confirming the addition made u/s 69A of the Income-tax Act, 1961 ( the Act ) by the Assessing Officer (AO).

As per AIR information, the Assessing Officer came to know that the assessee had deposited cash in the bank account.

The assessee was asked to explain the source of cash deposit alongwith evidence.

The assessee filed a detailed reply stating that cash was deposited out of advance (Bayana) took by him in cash against sale of his property. It was stated that the advance was taken against property to dear his bank loans as he was not keeping his health in good position.

The assessee also furnished a cash flow statement. Later, the assessee furnished an affidavit of the lender wherein he had confirmed the payment of cash to the assessee stating that the lender was a agriculturist with and was having sizeable amount of land.

The assessee was asked to produce the lender but he could not be produced because he had a kidney transplant and was confined to bed.

The Assessing Officer issued summons u/s 131 of the Act but, on receiving no plausible reply the Assessing Officer added cash deposited u/s 69 A of the Act.

The assessee agitated the matter before the CIT(A) but without any success.

Before the Tribunal, the assessee stated that the Assessing Officer had made addition u/s 69A of the Act whereas the amount found to be deposited in the bank account was duly recorded in the books of account of the assessee and, therefore, section 69A of the Act was not at all applicable on the facts of the case.

It was the case of the assessee that u/s 69A of the Act, burden is on the Revenue to prove that cash actually belonged to the assessee.

The Tribunal observed that there was no dispute that the assessee had furnished complete details in respect of cash found to be deposited in Bank account. The affidavit of the lender had not been dismissed by the Assessing Officer. There was also no dispute that summons issued u/s 131 of the Act was duly served and the transaction had been confirmed by the lender through an affidavit.  

The Tribunal opined that an unrelated person is unlikely to come with false evidence to oblige the assessee, knowing fully well the consequences of furnishing false evidence before a quasijudicial authority.

The Tribunal opined that the affidavit of the lender could not be brushed aside lightly, added with the fact that summons was served upon him, then nothing prevented the Assessing Officer to force his attendance for examination.

The Tribunal noted that the transaction had been duly recorded in the books of account of the assessee, and therefore, provisions of section 69A of the Act did not apply on the facts of the case in hand.

The Tribunal opined that the burden was clearly on the Revenue to prove that cash actually belonged to the assessee, particularly in cases where information had been coming from AIR.

The Tribunal held that the assessee had duly proved the source of cash deposit being advance received from the said lender and, therefore, addition deserved to be deleted.

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