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Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
This captioned appeal has been filed by the assessee against the order of the ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 16.06.2022 in respect of Assessment Year 2011-12.
2. The assessee has raised the following grounds of appeal:
“1. That the order of Learned C.I.T. (Appeals) is bad and against the facts and Law.
That the learned Assessing Officer has wrongly issued notice u/s 148 and reopened the case against the facts and circumstances of the case.
That the approval from PCIT is taken by stating wrong facts by the Ld. A.O.
4. That the approval by PCIT u/s 151 has been granted in a mechanical manner and without proper application of mind.
That the Iearned CIT(A) wrongly upheld the addition made by the learned Assessing Officer amounting to Rs17,58,000/- u/s 69A of the Act on account of unexplained money found credited into two saving bank accounts.
3 & SA No. 05/Jodh/2022 Prakash Sinwalv. ITO 6. That the learned CIT(A) has erred in upholding the deposit of cash in two saving bank accounts in which credit was there as belonging to the assessee while the accounts were effectively controlled and transactions were made by the husband of the appellant and belonging to him.
That the learned CIT (A) has wrongly upheld biased view of the learned assessing officer that he has proved that bank account being used by the appellant for both deposits and withdrawals by ignoring the facts and evidences produced by the appellant.
That the learned CIT(A) wrongly did not consider explanation and documentary evidences submitted by the appellant and blindly relied on wrong observations made by the learned assessing officer in the assessment order.
9. That the learned assessing officer has not considered cash deposited by husband of the appellant out of sale proceedings of land sold during the year for Rs.9,33,000/-.
That the appellant craves leave to add, alter, amend or withdraw any grounds of appeal before the final hearing.”
3. Briefly, the facts are that assessee had joint account with her husband in SBI and PNB Bank, Sangria. The AO noted that in the bank accounts, the name of assessee was added on 24.01.1995 however, the AO was being not satisfied with the reply of the assessee duly supported with the bank statement., and hence, made addition of the said cash deposit in joint bank account amounting to Rs 17,58,000/- u/s 69A as unexplained money which has been confirmed by the Ld. CIT(A).
The Ld. Counsel submitted that the appellant was using regularly the bank accounts to transfer, deposit, withdraw money and to make payments
4 & SA No. 05/Jodh/2022 Prakash Sinwalv. ITO from it. It is argued that the bank accounts under consideration was not operated and managed by the Appellant but by her husband Sh. Ashok Chaudhary. Accordingly, he pleaded that it is necessary to conduct inquiries from Sh. Ashok Chaudhary, the joint owner of the bank accounts. The Appellant submitted that the very basic premise of the entire proceedings has been that the bank accounts under consideration are held by the Appellant. In this regard, it is submitted that the said accounts are joint bank accounts jointly held with Sh. Ashok Choudhary (Appellant's husband) as primary account holder and Appellant as the secondary account holder. It was further contended that this fact is supported by Bank statements from which it can be clearly ascertained that they are primarily held by the Appellant's husband and not Appellant herself. Copy of the said bank account statements for the period April 1, 2010, to March 31, 2011, are annexed at Page No. 3 and Page No. 4 to 7 respectively of the paper book. He prayed that the matter may be remanded back to the file of the AO to pass de novo assessment order after considering the written submission filed in support of source of funds, deposited in the bank account, extracted as under:
“Source of funds
5 & SA No. 05/Jodh/2022 Prakash Sinwalv. ITO Without prejudice to the foregoing, the Appellant submits that even where the income is sought to be taxed, source of funds must have been sought jointly in the hands of the Appellant and her husband and not merely from the Appellant.
In this regard, the Appellant submits that out of the total impugned deposit of Rs. 17,58,000/-, Rs. 17,53,000/- were received by the Appellant and her husband on account of the following: o Rs. 9,33,000/- received pursuant to sale of agricultural land by the Appellant o Rs. 8,20,000/- received from Appellant's brother-in-law Sh. Surendra Kumar Sale of Agricultural land o The Appellant was in possession of an agricultural land which was sold by her during the year under consideration for Rs. 9,33,000/-. The same is also evident from the registered sale deed dated July 30, 2010 with stamp duty of Rs. 10,000/-The sale deed of the said land is annexed at Page No. 9 to 11 of the paper-book. o In this regard, it may be noted that as per the provisions of section 2(14) of the Act, any agricultural land situated beyond the stipulated threshold of the municipality/ cantonment board shall not be considered as a capital asset for the purposes of computing capital gains. o The land under consideration was also an agricultural land outside the stipulated threshold and therefore, gains arising from the sale of said land were exempt in the hands of the Appellant and not disclosed as taxable income in the Return of Income of the Appellant. o The sale proceeds of said property were duly deposited by the Appellant in the said bank account. The details of the said deposit are clearly shown in the cash flow statement of the Appellant and her husband.
Receipt from Appellant's brother-in-law o In this regard, it is submitted that Appellant's brother-in-law Sh. Surendra Kumar (brother of Sh. Ashok Choudhary) is also engaged in the agriculture business like her husband. During the year under consideration, Sh. Surendra Kumar had earned income from agricultural activities to the tune of Rs. 9,84,131/- and o For the sake of convenience, the above information has been tabulated below:
Particulars Amount Total Deposits 9,84,131 Total cash withdrawals 10,12,800 Amount received from Sh. Surendra Kumar 8,20,000 o Further, the said amount of Rs. 8,20,000/- was deposited in the joint account under consideration. The above fact is duly evident from the bank account statement of the Appellant annexed to this submission.
Cash flow statements for the Appellant with her husband Sh. Ashok Chaudhary incorporating all the details of cash deposits and withdrawals (for the period from April 1,2010 to March 31, 2011), evidencing the source of deposits from the aforementioned events, is attached at Page No. 8 of the paper-book for your kind reference.
In this case, without prejudice to our submission, it is submitted that even if any verification of sources were to be made in regards the cash credits, then the Assessing Officer should have either verified 100% from the Appellant's husband or should have verified 50% sources from the Appellant and 50% from her husband.
Further, the Assessing Officer has failed to acknowledge the fact that the Appellant has filed a NIL return which itself corroborates her submission that she has no source of income.
LEGAL SUBMISSION In this regard, it is submitted that the Ld. A.O. vide the impugned assessment order sought to made addition under the provisions of section 69A of the Act, which pertains to unexplained money not recorded in the books of accounts of 7 & SA No. 05/Jodh/2022 Prakash Sinwalv. ITO the assessee. Relevant extracts of the said section have been reproduced as under for ready reference: "69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." On a careful reading of the above extracts, it is clearly evident that the provisions of section 69A can be invoked only if the assessee offers no explanation about the nature and source of such funds. Further, the Ld. A.O. in para 3.2 of the impugned assessment order has alleged that the Appellant failed tofurnish any evidence during the entire assessment proceedings regarding the cash deposits made in her joint PNB and SBI A/cs in which she is a secondary holder.
In this regard, It is pertinent to mention that the Appellant had duly disclosed in her reply dated March 24, 2018 that she had no source of income due to which she did not file a return of income and also annexed the ITR, cash details and computation sheet of her husband to prove that the transactions were made by her husband.
Furthermore, the additions made in the hands of the Appellant on the basis of credits received is wrong, regarding which sufficient and credible information including the source by way of all evidences had been submitted during the assessment proceedings for discharging its burden.
Additionally, such additions are not sustainable in law as the onus had shifted on the Learned Assessing Officer to establish the fact that the amounts of these bank entries were unexplained after the aforesaid submissions were made by the Appellant. Also, no material was brought on record and there by wrongly inviting the application of provisions of the Section 69A of the Act.
8 & SA No. 05/Jodh/2022 Prakash Sinwalv. ITO The addition has been wrongly made under section 69A of the Act in the case under consideration. The Appellant who is a housewife and is not maintaining any books of the account. The books are maintained by her husband who is filing ITR. His ITR, computation and bank accounts prove the source of his income., which have been ignored by the Ld. A.O.
Further, the Appellant has clearly established that the money held/deposited in a joint account does not belong to her but to her husband who is the primary holder, rebutting the presumption of law under section 69A. It may be noted that it is an accepted fact that addition cannot be made in hands of beneficiary who has explained the source of the same satisfactorily.
Reliance in this regard has been placed on the following judicial precedents (refer Page 48 to 52 of the paper-book for details) wherein the above principles have been established by various judicial authorities in its decisions from time to time: o Hon'ble Indore ITAT in case of Sh. Rajesh Jain vs. ITO-2(1), Bhopal, dated 3.6.2020: o Hon'ble Amritsar ITAT in case of ITO v. Harmanpreet Kaur (AY 2009-10), ITA No.613/Asr/2015&C.O. No.15/Asr/2017: o The Hon'ble Amritsar ITAT in case of Sh. Gulshan Jain Prop. Vs. Asst. CIT (ITA no. 264(Asr)/2015 and ITA no. 327(Asr)/2015 pertaining to A.Y. 2010-11 dated 4.10.2017. o The Hon'ble Bombay High Court in the case of The Commissioner of Income Tax-10, Mumbai vs Manisha M. Shah: o Smt. Baljit Kaur vs. The ITO, ITA No. 876/CHD/2019, AY 2011-12 , Shri Buta Singh, ITA no. 877/CHD/2019 dated 9.4.2021, o The Hon'ble Delhi ITAT in the case of Jatinder Manchanda, New Delhi vs. Department of Income Tax, ITA no. 4060/De1.2011: o Hon'ble Delhi ITAT in case of Blue Chip Developers (P) Ltd. Vs ITO (ITAT Delhi), ITA No. 1061/Del/2019 dated 2/12/2019 AY: 2009-10: o The Hon'ble Delhi ITAT in the case of Sh. Rajendra Agrawal, New Delhi vs Ito, New Delhi on 2 December, 2019 I.T.A. No. 4624/Del/2014 for Assessment Year: 2007-08, Order dated 2 December 2019 o Alloys Ltd. vs. ITO ITA No. 2421/Del/2017 o United Electrical Company (P) Ltd. Vs. CIT &Ors. 258 ITR 317 (Del.) o CIT vs. S. Goyanka Lime & Chemical Ltd. (2015) 64 taxmann.com 313 (SC) o Neelam Arora, New Delhi vs Ito, Ward-36(4), New Delhi on 17 December,2019 ITA No. 2689/Del/2019 REBUTTAL OF JUDICIAL PRECEDENT REFERRED BY THE LD. A.O. The Ld. A.O. in the assessment order has relied on the judgement by Hon'ble ITAT in case of Parbat M Chamriya, Mumbai vs Cit (A) 33, Mumbai on 5 May, 2017, ITA 3059/mum/2015. Relevant extracts of the same have been reproduced as under:
"the assessee has failed to bring on record any evidence to establish his claims that the deposits in the ICICI Bank, saving bank account at Khar (1/40, Mumbai was out of receipts connected with his business transactions. In our view the assessee has failed to controvert the findings of the authorities below that he was not engaged in any business activity during the year under consideration. Therefore, in our considered opinion, the said unexplained deposits amounting to Rs. 27,10,812/-, the source of which has not been satisfactorily explained by the assessee, has been correctly treated as unexplained money under section 69A of the Act and brought to tax in the assessee's hands. "
10 & SA No. 05/Jodh/2022 Prakash Sinwalv. ITO The facts of the above case are not applicable to the Appellanton account of the following reasons: o The Appellant had clearly explained the source of bank deposits. o The Ld. A.O. is wrong in treating all deposits in the joint accounts with Appellant's husband (who is primary holder) as against that of the Appellant. o Mere deposits in the bank accounts cannot be presumed to be taxable income
On perusal of the above, it is abundantly clear that the Ld. A.O. incorrectly biased to make additions in the hands of the Appellant and the entire assessment is based on vague, arbitrary surmises, conjectures and assumptions without any legal grounds.
PRAYER In light of the aforementioned factual and legal submissions, it is clearly evident that the in bank accounts under consideration, the Appellant was added as a secondary holder, the primary holder being her husband and the allegation that she was operating the bank accounts, therefore deposits made in the same are her taxable income is incorrectly founded.
Accordingly, the Appellant humbly requests that the addition u/s 69A amounting to Rs. 17,58,000/- are based on surmises and conjectures and may kindly be deleted.
E. OUR PRAYER In light of the aforementioned factual and legal submission, the Appellant prays before the Hon'ble ITAT to kindly delete the unwarranted and unfounded additions made by the Ld. A.O. and provide relief to the Appellant from the hardships being faced on account of the same.
The Appellant further requests that where any additional information/ explanation(s)/ clarification(s) are required to appropriately adjudicate the facts and intricacies of the matter, the Appellant shall be obliged to furnish the same.”
We have heard both sides, perused record and impugned order. Admittedly, assessee had joint accounts with her husband in SBI and PNB Bank, Sangria with cash deposit amounting to Rs 17,58,000/- treated by the AO as unexplained money u/s 69A of the Act which has been confirmed by Ld. CIT(A). The Ld. AR argued that the worthy CIT(A) decided the case in arbitrary manner without considering explanation and documentary evidence submitted by the appellant.
7. It is seen that neither the AO nor the Ld. CIT(A) has addressed the relevant issue on merits of the case that the assessee had joint accounts with her husband in SBI and PNB Bank, Sangria with cash deposit amounting to Rs 17,58,000/-. It is further seen that neither AO nor Ld. CIT(A) has addressed the relevant matter regarding appellants' claim of source of cash deposit in its joint bank account out of the amount received of Rs. 9,33,000/- in pursuant to sale of agricultural land by the Appellant and Rs. 8,20,000/- received from Appellant's brother-in-law Sh. Surendra Kumar. In support, the Ld. AR filed a statement of joint bank account as documentary evidence to establish its claim as above.
12 & SA No. 05/Jodh/2022 Prakash Sinwalv. ITO 8. In view of the principles of natural justice, the authorities below ought to have disproved the claim of the assessee by way of rebutting its contention with support of corroborative documentary evidences on record after granting an adequate opportunity of being heard. The Hon’ble Supreme Court of India in the case of Tin Box Company vs. CIT reported in 249 ITR 216 in which their Lordships of Supreme Court of India observed as under:
Assessment - Opportunity of being heard - Setting aside of assessment - Assessment order must be made after the assessee has been given reasonable opportunity of setting out his case - Same not done - Fact that the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is assessment order that counts — Assessment order set aside and matter remanded to assessing authority for fresh consideration.
In view of the principles of natural justice, we consider it deem fit to restore back the matter to the file of the Ld. AO to pass de novo assessment after considering the written submission and evidences filed on record and may be filed before him during the fresh Assessment Proceedings after granting sufficient opportunity of being heard to the assessee with a direction that the AO shall issue a Show Cause Notice and thereafter pass a reasoned order in accordance with law.
13 & SA No. 05/Jodh/2022 Prakash Sinwalv. ITO 10. Accordingly, the Assessment order is set aside and matter is remanded back to the assessing authority to pass de novo assessment as per law.
Since, the matter is remanded to the AO to pass denovo assessment hence, the S.A. No. 05/Jodh/2022 is dismissed as infructuous non maintainable.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 13.10.2023