GAGAN CHHABRA ,DELHI vs. ACIT CIRCLE-72(1), DELHI

The dispute in the present appeal is confined to addition of Rs.6,91,000 under Section 69A of the Income-Tax Act,1961.

Briefly, the facts are, the assessee is a resident individual. For the assessment year under dispute, the assessee filed his return of income on 30.07.2017 declaring income of Rs.35,87,750. In course of assessment proceedings, the Assessing Officer noticed that the assessee had deposited cash amounting to Rs.7,41,000 in different bank accounts. Therefore, he called upon the assessee to explain the source of cash deposits. Though, the assessee furnished some explanation explaining the source of cash deposits, however, the Assessing Officer was not convinced. Therefore, he added back Rs.6,91,000 to the income of the assessee by applying section 69A of the Act. The addition made was confirmed by learned Commissioner (Appeals).

Before me, learned counsel appearing for the assessee submitted that the bank account was jointly held by the assessee with his wife and cash deposit of Rs.2,48,000 was made by his wife from her income from petty business. He submitted, the balance amount was out of the past savings. In support, he drew my attention to the Income-tax return filed by the assessee’s wife, bank statement etc. He also relied upon certain case laws.

Learned Departmental Representative strongly relied upon the observations of learned Commissioner (Appeals).

I have considered rival submission and perused the material available on record. As could be seen from the facts and material on record, the bank account was held jointly by the assessee with his wife. It is the case of the assessee that an amount of Rs.2,48,000 was deposited by his wife. Further, an amount of Rs.2,28,800 is out of withdrawals from 04.04.2016 to 07.11.2016 and balance amount were out of withdrawals made earlier.

Having perused the material on record, I am of the view that assessee’s claim that amount of Rs.2,48,000 was deposited by his wife is believable considering the fact that assessee’s wife has filed the ITR offering income. Further, the assessee had benefit of withdrawals of Rs.2,28,800 from 04.04.2016 to 07.11.2016. Learned Commissioner (Appeals) has accepted this fact. However, he has not given benefit of such withdrawals on the reasoning that such withdrawals might have been used for personal use. In my view, when there is nothing on record to suggest that the amount of Rs.2,28,800 was utilized for some other purpose, benefit of doubt has to be to the assessee. Thus, the assessee gets further relief of Rs.2,28,800.

As regards the balance amount, assessee’s claim that it was from withdrawals made in earlier years is not believable. As, it is highly improbably that after withdrawal of money from the bank account, the assessee was keeping it in cash form for such a long duration. Thus, out of the addition made of Rs.6,91,000, assessee gets relief for an amount of Rs.4,76,800 and addition to the extent of Rs.2,14,000 is sustained.