Clipped from: https://www.taxscan.in/cash-deposit-arising-out-of-sale-of-agricultural-land-cannot-be-treated-as-unexplained-itat/176059/?utm_source=izooto&utm_medium=push_notifications&utm_campaign=Agricultural%20Land
By Taxscan Team – On May 19, 2022 2:37 pm
The Income Tax Appellate Tribunal (ITAT), Chennai bench, while allowing an appeal of the assessee, held that the cash deposit arising out of sale of agricultural land cannot be treated as unexplained for the purpose of section 68 of the Income Tax Act, 1961.
The Assessee, Mr. V Nagarajan, is an individual and filed his return of income for the Assessment Year 2015–2016. The Assessing Officer rejected the return and made an addition holding that Assessee failed to explain the source of cash deposits made in the Savings Bank Account maintain with Punjab National Bank amounting to Rs.2.20 crores on 22.09.2014.
The assessee contended that the cash deposits are out of sale consideration as recorded in the agreement of sale.
Accepting the above contentions based on a catena of judicial decisions, the Tribunal bench comprising Shri Mahavir Singh, Vice President and Shri Manoj Kumar Aggarwal, Accountant Member has observed that “the presumption goes in favour of assessee that the cash deposit in bank account of assessee maintained with PNB on 22.09.2014 amounting to Rs.2.20 crores is coming from the sale transaction of agricultural land by the mother and the legal heirs of the mother including the assessee. The assessee produced a definite evidence i.e., sale agreement which is entered into for an amount of Rs.2,85,00,000/- on 14.08.2014 for sale of this agricultural land. The assessee has fairly established the fact that the cash deposits are out of sale consideration as recorded in the agreement of sale. In view of the above given facts and circumstances of the case, we are of the view that the cash deposit made by assessee amounting to Rs.2.20 crores are arising out of sale of agricultural land by the assessee’s mother including assessee and hence, this cannot be treated as unexplained cash deposit.”
Mr. S. Sridhar, Advocate & Mr. N.Arjun Raj, CA, appeared for the assessee.To Read the full text of the Order CLICK HERE