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Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
ORDER
PER KUL BHARAT, JM :
The present appeal filed by the assessee for the assessment year 2017-18 is directed against the order of Ld. CIT(A), National Faceless Appeal Centre (“NFAC”), Delhi dated 30.05.2022.
The assessee has raised following grounds of appeal:- 1. “The Learned Commissioner of Income Tax (Appeals) has erred in law and on facts in dismissing the ground of appeal No 1 where in the appellant contested against the assessment order under section 144 of the Act, which has been passed by the AO without satisfying the condition of providing reasonable opportunity to the assessee in order to explain the objections raised in the assessment order and without service of notice u/s 142(1) dated 14.03.2018 for initiation of assessment proceedings.
2. The Learned Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the addition of Rs.564500/- out of total cash deposit of Rs.1264500 during the period 09.11.2016 to 31.12.2016 year under consideration by superseding the reply and supportive documents submitted before him. Hence addition may kindly be deleted.
The Learned Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the arbitrary proceedings in regard to the cash deposit made by the assessee and assuming the same as his undisclosed and passed assessment order under section 144 whereas the joint family of appellant was having proper sources of cash deposit ill the bank account. It is prayed the addition of Rs.564500/- may kindly be deleted.” 3. The only effective ground in this appeal is against the addition of Rs.5,64,500/-.
Facts giving rise to the present appeal are that the Assessing Officer (“AO”) was having information regarding cash deposited by the assessee in his bank account maintained with HDFC Bank Ltd. amounting to Rs.12,64,500/-. It was seen that the amount was deposited in old currency notes. The case of the assessee was picked up for scrutiny assessment and the assessment was framed u/s 144 of the Income Tax Act, 1961 (“the Act”) vide order dated 25.12.2019. Thereby, the AO made addition of Rs.5,64,500/- and Rs.2,00,595/- respectively, on account of salary and unexplained cash deposits.
Aggrieved against the order of AO, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, dismissed the appeal of the assessee.
Aggrieved against the order of Ld.CIT(A), the assessee preferred appeal before the Tribunal.
At the time of hearing, Ld. Authorized Representative (“AR”) of the assessee has given a cash flow statement. For the sake of clarity, the same is hereby reproduced as under:-
Date Particulars Outgoing Income Cash in cash cash hands 01.04.2016 Opening cash in hand out of sale 180000 proceeds of agriculture products at RS.725261 Form J attached 08.04.2016 Sale of wheat in cash Form J 242720 422720 ~. 11.04.2016 Sale of wheat in cash Form J 190740 613460 11.05.2016 Withdrawn from KCC in cash 026000 12.39460 - 01.06.2016 Agriculture expenses for the first 165000 1074460 quarter in cash 01.06.2016 Household expenses in cash 50000 1024460 01.9.2016 Agriculture expenses for the 165000 859460 second quarter 01.09.2016 Household expenses in cash 50000 809460 18.10.2016 Sale of Paddy in cash Form J 246501 1055961 19.10.2016 Sale of Paddy in cash Form J 130704 1186665 28.10.2016 Sale of Paddy in cash Form J 144226 1330891 05.11.2016 Sale of Paddy in cash form J 87329 1418220 Deposits in KCC A/Cs. 15.11.2016 800000 618220 24.11.2016 Deposits in KCC A/C. 450000 168220 01.12.2016 Agriculture expenses 125000 43220 07.02.2017 Withdrawn from KCC 100000 143220 17.02.2017 Withdrawn from KCC 100000 243220 23.02.2017 Withdrawn from KCC 100000 343220 27.02.2017 Withdrawn from KCC 100000 443220 01.03.2017 Agriculture expenses 125000 318220 01.03.2017 Household Expenses 50000 268220 Withdrawn from KCC 18.03.2017 500000 768220 in cash 27.03.2017 Deposit in KCC A/c 49000 719220
28.03.2017 Deposit in KCC A/c 49000 670220
Ld. Counsel for the assessee submitted that the authorities below failed to consider the availability of fund in arbitrary manner and sustained the addition. He further reiterated the submissions as made in the written submissions.
On the other hand, Ld. Sr. DR opposed these submissions and submitted that the assessee failed to produce these evidences and could not explain the source of cash deposits.
I have heard Ld. Authorized Representatives of the parties and perused the material available on record. The assessee has placed cash flow statement to buttress the contention that the assessee was having sufficient reason for earning and making deposits in cash.
10.1. A bare perusal of cash flow statement so submitted goes to prove that the assessee was having sufficient funds to make deposits. Therefore, considering the same, authorities below are not justified in making and sustaining the impugned addition. Hence, AO is hereby directed to delete the addition. The grounds raised by the assessee in this appeal are allowed.