AI Structured Summary
Not yet generated for this judgment
Judgment
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2015-16, arises against the C IT(A)/NFAC, De lhi’ s DIN & order No. ITBA/NFAC/S/250/2025-26/1077757920(1) dated 25.06.2025, in proceedings u/ s 147 r .w.s. 144 of the Income Tax Act, 1961.
Heard both the p arties at length. Case file perused.
Learned counsel submits at the outset that the assessee does not wish to press for his legal ground challenging validity of the impug ned reopening herein. Rejected accordingly.
Next comes the asse ssee’s latter twin substantive grounds inter alia seeking to reverse bo th the learned lowe r authoritie s’ action treating his cash deposits of Rs.20,00,000/- as unexplained followed by interest on enhanced land acquisition compensation amounting to Rs.23,63,278/- treated as taxable u/s 56(2)(viii), respectively, as upheld in the CIT(A)’s lower appellate discussion reading as under:
“4 . I have carefull y consider ed the assess ment order, the grounds of appeal, the submission filed by t he assessee and othe r rel evant ma terial on rec ord.
4.1.With regard to the additio n of Rs.28,00,000 as cas h deposits i n t he bank account deem ed unexplai ned money under Secti o n 69A of the Act, the appellant s ubmitted tha t a cas h depos it of Rs.10,00,000 on 20/07/2014 was made f rom cash withdrawals i nt ended for the purchas e of land. The app ellant explained t hat the purchase c ould not be fi nalized due t o the seller bac king out, l eadi ng to t he redeposit of the amount int o t he bank account . Concerni ng the cash deposit of Rs.18,00,000 on 05/12/2014, the appellant stated it was received as an adv ance paym ent from a pr ospective buyer fo r a prop osed property sale. Due to subseque nt disagreements , the f ull amount was r eturned t o the buyer withi n fi ve days through t wo withdra wals of Rs.9,00,000 eac h on 10 /12/2014. The appellant also provided a cas h fl ow statement de tailing thes e tr ansactions.
4.2.Upon reviewi ng the cash fl ow statement, it was not ed that prior t o the deposit of Rs. 10,00,000 on 20/07/2014, the appellant ha d withdrawn rs.8,00,000 on thr ee occasi ons. The appella nt claimed additi onal savings of Rs.2 ,00,000 to justify cas h deposit of Rs.10,00,000. Ho wever, evidence from t he Stat e Ba nk of India stat ement only c onfir med withdrawal s total ing Rs.8,00,000. As the appellant did no t pr ovide proof for the additi onal Rs .2,00,000, this amount is treat ed as unex plained money under S ec tion 6 9A of t he Act.
4.3.Regarding the c ash deposit of Rs.18,00,000, t he appellant's claim of receivi ng an adva nce fro m a prospective buyer lacked supporting doc umentati on. Despit e the appellant 's ass ertion that the t rans action fail ed and necessitat ed ret urni ng the advance, no doc ument ary evi denc e s ubstantiated t his claim. Consequently , the explanation fo r the cash deposit of Rs.18,00,000 o n 05/12/2014 is not accepted , and t he Assessi ng Offic er's addition to the ex tent of Rs.20,00,000 is upheld.
4.4.In relatio n to the addi tio n of Rs.23,63,278 as inte rest on c ompe nsati on rec eived fr om the New O khla Indus trial Devel opment Authority, t hough gro unds were raised in Form #3 5, no written argument or mention was made i n the submissi ons bef ore this Aut hority. Accordi ngly, it is co ncl uded t hat the appellant did not press the gro unds concer ni ng the addition of Rs.23,63,278/-, resulti ng i n their dismissal.”
Bo th the lear ned representatives reiterate their respective stands against and in support of the impugned twin additio ns. We note in this factual backdrop that so far as the former additio n of Rs.28,00,000/- is concerned, the assessee had indeed deposited this cash amount where in he co uld explain re-deposits of Rs.8,00,000/- withdrawn earlier which made the learned C IT(A) to uphold the re maining amount of Rs.20,00,000/- in his hands. The Revenue co uld hardly dispute that this asse ssee has also p laced copy of his revenue records indicating him to be an agriculturist wherein possibility of cash sales and past savings in such an organized sector could not be per se ruled out. This is indeed coupled w ith the fact that bo th the learned lowe r author ities have also considered his family’s accumulated past savings as we ll. We thus deem it appropriate in this factual backdrop that a further lump sum addition of Rs.10,00,000/- would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.10,00,000/- in other words. Necessary computation shall follow as per law .
Next comes the latter issue of assessment of the assessee’s interest on enhanced compensation addition of Rs.23,63,278/- made after invoking section 57(iv) r.w.s. 56 r.w.s. 145A(b) of the Act.
Learned Sr. DR representing the departme nt vehemently argues that the instant issue is no more res i ntegra in light of Mahender Pal Narang Vs. C BDT (2020) 423 ITR 13 (P&H) as well as PCIT Vs. Inderjit Singh Sod hi HUF (2024) 161 taxmann.co m 30 1 (Del.) where in the department has succeeded before their lordships that the impugned interest compo nent ought to be assessed as income from “o ther” so urces only.
The assessee on the other hand places strong reliance on Movaliya Bhikhubhai Balabhai vs. ITO (2016) 388 ITR 343 (Guj.), Rupesh Rashmikant Shah vs. Union of India (2019) 108 taxmann.co m 18 1 (Bom) and Anvar Ali Poolakkodan Vs. ITO (2025) 173 taxmann.co m 633 (Ker) holding that such an interest income on enhanced compensatio n under the provisions o f the Land Acquisition Act, 1894 is no t taxable even after the statutory amendment in section 57(iv) r.w.s. 56 r.w.s. 145A(b) of the Act.
Faced with this situation, the Revenue could hardly dispute that no valuable guidance on the instant issue of taxability of interest income on enhanced compensation has come from hon’ble jurisdictio nal high court at Allahabad. That being the case , we hereby quo te CIT Vs. Vegetable Products Ltd. (1973) 88 IT R 192 (SC) to decide the issue in the assessee’s favour in very terms. Both the learned lower authorities’ action ho lding the assessee’s interest inco me on enhanced land acquisition compensation as taxable stands reversed therefore.
No other ground or argument has been pressed before us.
This assessee’s appeal is partly allowed in above terms.