ITAT Quashes Rs 54 Lakh Unexplained Cash Deposit Addition in Property Deal Case
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has allowed the appeal filed by Anil Rathee against the Income Tax Officer (ITO) for the Assessment Year 2012-13. The appeal challenged the order of the CIT(A), which had upheld an addition of Rs 54,00,500 made by the AO.
The case arose after the tax department received information through the Annual Information Return (AIR) system that cash deposits of Rs 54,00,500 had been made in Anil Rathee’s bank account during the financial year 2011-12. Since no income tax return had been filed for the relevant year, the department reopened the assessment under Sections 147 and 148 of the Income Tax Act. The assessee did not respond to various notices issued during the assessment proceedings, which resulted in the AO treating the entire cash deposit as unexplained income and adding it to his taxable income.
The assessee before the ITAT stated that he was working as a property dealer and was merely acting as an intermediary in the transactions of lands made by Zile Singh and his family. The assessee said that he had received cash from the prospective buyers and deposited the same in his personal bank account and thereafter transferred the same amount to the sellers for the purpose of facilitating the execution and registration of sale deeds. He said it wasn’t his money it was just passing through his account.
In support of his claim, the assessee filed bank statements, reconciliation statements, affidavits of the sellers, affidavits of the buyers of the property that they handed over the cash to the assessee for onward payment to the sellers, copies of the sale deeds. He further submitted that these documents are also placed before the Assessing Officer as also before the CIT(A).
The Tribunal, upon perusing the evidence, found that the documents revealed a clear flow of money from the property buyers to the assessee and then to the sellers. The Tribunal noted that the transactions were supported by affidavits and sale deeds and the assessee had only acted as a facilitator in the property transactions.
The ITAT restored the assessment order dated 16 December 2019 and the order of CIT(A) dated 20 March 2026 holding that the lower authorities had not properly appreciated the evidence on record.
The Tribunal admitted the assessee’s appeal and deleted the addition of Rs 54,00,500.
Case citation: Anil Rathee Vs ITO (ITAT Delhi); ITA No. 3847/Del/2026; 30/07/2026; 2012-13.
