RAKESH RATHI,NEW DELHI vs. ITO, WARD-58(5), NEW DELHI

That the CIT (Appeals) has erred in law and on fact, in confirming the order of assessment under section 147/143(3) of the Act, in sustaining the reopening action under section 148, where reasons recorded for the reopening of the assessment are silent on the following vital issues: a. Contents of information available to AO and b. Mere cash deposits are treated to be equivalent to income escaping assessment.

The learned counsel of the assessee submitted that does not want to press legal ground no. 1 to 3, therefore the same are dismissed has not pressed.

The learned counsel submitted that the Assessing Officer has made an addition of Rs. 14 lakh on account of cash deposit to the bank account maintained with Corporation Bank viz. Rs. 9 lakh on Rakesh Rathi Page 5 of 8 17.02.2018 and Rs. 5 lakh on 01.03.2018 whereas the bank passbook of sister of assessee Smt. Jyoti Rathi and father of assessee Shri Ganshyam Dass Rathi clearly reveals that the amounts so deposited by the assessee were out of cash withdrawal by sister and father of the assessee from their respective bank accounts. He drew our attention towards paper book pages 15 to 22 of assessee’s paper book and submitted that the copies of bank passbook of assessee, his sister Smt. Jyoti Rathi and his father Shri Ganshyam Dass Rathi clearly reveals the source of cash despotised by the assessee to his bank account therefore the addition made by the AO and confirmed by the Ld. CIT(A) may kindly be deleted.

Replying to the above the Ld. Senior Departmental Representative oppose to the contention of assessee and relied on the orders of the authorities below.

On careful consideration of rival submissions, I note that the Assessing Officer has made addition in the hands of assessee on account of cash deposited to the bank account of assessee maintained with Corporation Bank. The first deposit of Rs. 9 lakh Rakesh Rathi Page 6 of 8 was made on 17.02.2018 and second deposit of Rs. 5 lakh was made on 01.03.2018 these facts are clearly discernable from the copy of the passbook of assessee bank account with Corporation Bank. Further from the copy of the bank passbook pertaining to Smt. Jyoti Rathi, I also note that the sister of assessee has withdrawn Rs. 12,30,000/- on 17.02.2011 and thus I am agree with the contention of the Ld. AR that the amount of Rs. 9 lakh despotised by the assessee to his bank account was from the amount withdrawn by the sister of assessee from her bank account on the very same date i.e. 17.02.2011, therefore the source of first deposit is properly explained and copy of PAN and affidavit along with confirmation given by sister of assessee Smt. Jyoti Rathi again confirm the fact that she has having PAN number and bank account which shows her identity, capacity and creditworthiness and genuineness of transaction of gift to his brother that is assessee.

Regarding second deposit from the copy of passbook of father of assessee Shri Ganshyam Dass Rathi available at pages 8 and 9 of assessee paper book reveals that the father of assessee has Rakesh Rathi Page 7 of 8 withdrawn Rs. 5 lakh on 01.03.2011 from his bank account maintained with Corporation Bank and on the very same date the same amount of Rs. 5 lakh was deposited by the assessee to his bank account. The copy of bank passbook, Aadhar Card, affidavit and confirmations of gift given by the father of assessee Shri Ganshyam Dass Rathi clearly reveals the identity capacity and creditworthiness and genuineness of transaction of gift from the father to son therefore no addition is called for in the hands of assessee on this account. The copy of ITR acknowledgment of Smt. Jyoti Rathi available at pages 36 and 37 and copy of ITR acknowledgment of Shri Ganshyam Dass Rathi available at page 38 of paper book clearly reveals that these persons filing Income Tax Return with the Department therefore their identity cannot be doubted.

In view of above I am inclined to hold that the assessee has successfully demonstrated and substantiated the source of cash deposit of Rs. 14 lakh to his bank account therefore no addition is called for in this regard therefore grounds of assessee on merits are allowed and the AO is directed to delete the addition.

In the result appeal of the assessee is partly allowed.