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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI KUL BHARAT
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 26.11.2021, pertaining to the assessment year 2017-18. The assessee has raised following grounds of appeal:
“1. That, the Learned Commissioner of Income Tax (Appeals) has passed the first Appellate Order without allowing the appellant sufficient opportunity of being heard which is arbitrary, unjustified and bad in law and is therefore is null and void-ab-initio and the order deserves to be quashed.
That, the Learned Commissioner of Income Tax (Appeal) (Ld/-
CIT(A)) on erred in the facts and circumstances of the case, in confirming the assessment of total income of the at Rs. 22,99,530 against the total income returned of Rs. 8,70,530/- arbitrarily. The Ld/- AO made additions of Rs. 14,29,000/- by invoking section 69A, to the returned income of Appellant without appreciating the fact that Appellant had sufficient cash savings which arbitrary, unjustified, bad in law and have not been considered judicially.
3. That, the Learned Commissioner of Income Tax (Appeal) erred confirming the imposition of section 115BBE by the Learned Assessing Officer to the alleged unexplained income of Rs. 14,29,000/- under section 69A of the Act. The amount of Rs. 14,29,000/- cannot be called as unexplained income of the Appellant, as the same was explained as savings and gifts received by the appellant on occasion of first marriage and also on occasion of fixation of second marriage in 2016.
3.1. Without prejudice to above grounds, the provision of amended section 115BBE has been wrongly invoked on the instant facts of the case. The amended rate cannot be imposed on alleged deemed income as Ordinance was promulgated on 16th December 2016.
4. That the learned Commissioner of Income Tax (Appeals) has further erred both on facts and in law while disposing of the appeal in ignoring the partial submissions and explanations and further not allowing appellant to submit his final reply. Thus, the order of CIT (A) is vitiated in law for non- consideration of the factual and legal submissions made and thus suffers from the vice of arbitrariness.
5. That on facts & circumstances of the case the learned AO has erred in charging interest of Rs. 3,59,488/- u/s 234B of the income Tax Act, 1961 which is uncalled for, unlawful, unjustified, arbitrary and deserves to be deleted.
6. That on facts & circumstances of the case the learned AO has erred in charging interest of Rs. 899/- u/s 234C of the income Tax Act, 1961 which is uncalled for, unlawful, unjustified, arbitrary and deserves to be deleted.
7. The above grounds of appeal are without prejudice to one another.
8. The appellant craves the right to add, amend, alter, withdraw or forgo any ground or grounds of appeal before or at the time of hearing.”
2. Facts giving rise to the present appeal are that in this case the assessee filed its return of income on 27.8.2017 declaring income of Rs. 8,70,530/-. The case was processed u/s 143(1) of the Income-tax Act, 1961, hereinafter referred to as the “Act”. Thereafter, the case was taken up for limited scrutiny under CASS for depositing cash during the demonetization period. The Assessing Officer recorded that as per the information available with him the assessee had deposited cash of Rs. 14,29,000/- in his bank account during the demonetization period from 9.11.2016 to 31.12.2016. The assessee was asked to explain the source of such cash deposits. The Assessing Officer noticed that assessee was given sufficient opportunity and the explanation stated to be out of past savings. The AO did not accept the explanation offered by the assessee and treated the cash deposited as unexplained and made addition of Rs. 14,29,000/-. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who also sustained the addition made by the Assessing Officer and dismissed the appeal of the assessee.
Aggrieved against this the assessee is in appeal before this Tribunal.
Ground no. 1 is general in nature, requires no separate adjudication.
Apropos to ground nos. 2 to 4, learned counsel for the assessee reiterated the submissions as made in the written submissions. He contended that learned
CIT(Appeals) grossly erred in sustaining the addition. Learned counsel submitted that the amount was received as gift on the occasion of his marriage and also from parents. He submitted that under the facts of the present case the addition is not justified.
On the other hand, learned DR opposed the submissions and supported the orders of the authorities below. He contended that the assessee was required to give satisfactory explanation relating to deposits made in the bank account.
I have heard rival submissions and perused the material available on record.
One of the submissions of the assessee is that the authorities below failed to appreciate the facts in right perspective. It is contended that assessee had deposited cash in form of demonetized currency notes which were no longer legal tenders as on 16.11.2016, into his savings bank account. It is contended that depositing money in bank account is one form of investment on which the assessee was earning interest. Since the Assessing Officer was dis-satisfied with the explanation offered by the assessee, the addition could have been made u/s 69 only and not u/s 69A of the Act. It is contended that making addition in a wrong provision of law has vitiated the assessment proceedings.
Another contention of the assessee is that the authorities below failed to appreciate the explanation given by the assessee. He contended that the assessee is a salaried employee and also was married twice. On these occasions the relatives of the assessee had given gifts in cash which was lying as cash in hand. The authorities below have not given any consideration regarding such gifts and the past savings.
I have given my thoughtful consideration to the facts of the present case.
The assessee has not filed any cash flow statement. However, it cannot be presumed that assessee was not having any cash in hand or past savings. Looking to the facts and circumstances, I deem it fit and proper to restrict the addition to the extent of 30%. I order accordingly.
Appeal of the assessee is partly allowed.