1.  ITO Vs. Mrs. Deepali Sehgal, I.T.A No. 5660/Del/2012, Date of Order: 05/09/2014, ITAT - Delhi

Merely because there is a time gap between withdrawal of cash and its further deposit to the bank account, the amount cannot be treated as income from undisclosed sources u/s 69 of Income-tax, Act 1961.

Held Yes

Assessee withdraw huge cash from her bank account and deposited the same after lapse of time AO made addition on account of amount deposited in bank account u/s 69 of Act on the basis that “it was hard to believe that cash withdrawn from bank was kept by the assessee for deposit and same was deposit back in the bank after a long period”. In reply to above assessee submitted cash flow statement, which shows that there is cash withdrawal from her SB A/c and also withdrew capital balance from her capital account her partnership firms on different dates and there is no negative cash balance at any point of time.

Hon’ble ITAT held that It is not mandatory under any law of the land that an individual has to keep savings in the bank account only and not as cash in hand. AO made addition without any legal and justified reason.

In the result, the appeal of the revenue is dismissed.

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2.  ITO Vs. Smt. Tripta Shahani, I.T.A. No. 459/LKW/2009, Date of Order: 05/09/2014, ITAT - Lucknow

Exchange of property without determining any consideration, is not equal to purchase or sale of property.

Held Yes

Facts of the case are that assessee book a flat on 13/08/2001 in a project. However the original booking of flat was canceled on 24/01/2004 and a new flat was allotted to assessee on same date. On 11/10/2005 assessee surrender booking of the flat and received consideration for which assessee compute long term capital gain. AO reject assessee’s claim of claiming long term gain on sale of flat on the basis that time period of holding flat is less than three year because original booking had been canceled on 24/01/2005 and a fresh booking for such flat was made on that date.

Hon’ble ITAT held that merely change in the flat without determining any consideration for the old flat cancelled and new flat transferred, it cannot be said that the old flat was sold and new flat was purchased on the date of change. Hence, in the facts of the present case, we are of the considered opinion that AO not justified in rejecting assessee’s claim.

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