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Income Tax Appellate Tribunal, DEHRADUN CIRCUIT BENCH: DEHRADUN
ORDER This is an appeal against order dated 11.03.2022 passed by National Faceless Appeal Centre (NFAC) pertaining to assessment year 2017-18.
Though, the assessee has raised several grounds of appeal before us, the only effective issue to be decided in this appeal is as Commissioner of India Tax (Appeals)(NFAC)
[hereinafter referred to as ‘learned CIT(A)] was justified in confirming the addition made by learned Assessing Officer in the sum of Rs.7,50,000/- as unexplained money under section 69A read with section 115BBE of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) in the facts and circumstances of instant case.
We have heard the rival submissions and perused the materials available on record. At present, the assessee is a senior citizen, aged 67 years, deriving income from pension since past seven years, after his retirement from Government service on 30.03.2016 from Urban Development Directorate, Dehradun, after serving with the State Government for 34 years. The assessee also derives bank interest income on deposits. The family members of the assessee comprised of assessee, his wife (home maker) and ailing mother. Son of the assessee was settled in December, 2009 out of town and there is no financial commitment for the assessee through his son. The family of the assessee was staying in the ancestral house belonging to the assessee and as such there is no burden of payment of rent. The assessee during his tenure in Government service was posted in various locations outside his home town. Accordingly, he had to maintain the dual establishments and also had to frequently withdraw cash from the bank account in which his salary was credited. That withdrawal so made had to be handed over to the family of the assessee for their sustenance.
During the year under consideration, learned Assessing Officer found that the assessee has made cash deposits during demonetization period in old demonetized currency, amounting to Rs.11 lakhs in Corporation Bank. The learned Assessing Officer directed the assessee to explain the source of such cash deposits. In response thereto, the assessee gave the details of entire cash withdrawals made by him from December 2009 to October 2016 after earmarking the cash towards household expenses and stated that he has sufficient cash balance in the sum of Rs.14,32,000/- and out of which a sum of Rs.11,00,000/- was deposited by him in demonetized currency during the demonetization period. Learned Assessing Officer, however, did not agree to this explanation but however gave credit for the cash withdrawals made during the period 01.04.2016 to 08.11.2016 and some amount being given credit towards personal savings. Accordingly, learned Assessing Officer proceeded to treat the remaining of Rs.7,50,000/- (Rs.11,00,000 – Rs. 3,50,000) as unexplained money on the ground that no satisfactory explanation has been given by the assessee and hence taxed the same as income of the assessee under section 69A read with section 115BBE of the Act. This action of learned Assessing Officer was upheld by learned CIT(A).
Before us, learned AR reiterated the submissions made before the lower authorities and drew our attention to the various withdrawals made from December 2009 onwards and statement made by the assessee in tabular form representing the household drawings for each month. Learned AR submitted that those withdrawals after meeting the household expenses were available as cash source to prove the cash deposits made by the assessee during the demonetization period. He also submitted that during this period, i.e., December 2009 to October 2016, the assessee had not made any major investment in the property or had not conducted any family functions and that except, meeting for household expenses and medical expenses towards his ailing mother, no other expenditure was incurred by the assessee. Learned AR further submitted that sufficient cash needs to be kept always in hand in order to meet the medical emergency of his ailing mother to the assessee. Further, learned AR submitted that the assessee’s son has been settled in the year 2009 and is not dependent on the assessee as he is self-sufficient.
Per contra, learned DR vehemently relied upon the orders of the lower authorities and submitted that it is quite unusual that the assessee, being a retired Government servant, holds substantial cash over a period from December 2009 to October 2016. Hence, he argued that the contention of the assessee has been rightly rejected by the lower authorities.
It is not in dispute that the assessee during the tenure of Government service was posted in different locations outside his
home town. Accordingly, the assessee was forced to open various bank accounts in different parts of the country. It is not in dispute that the withdrawals have been made by the assessee immediately after credit of salary from his bank account. Since, the assessee is away from his family pursuant to his employment, he has to obviously maintain the dual establishment, i.e., one for himself and other for his family members residing in the ancestral house.
Accordingly, the monthly drawings of Rs.8,000/- to Rs. 10,000/- as tabulated by the assessee, which are enclosed in the paper-book would be insufficient to meet the requirements of the assessee and his family members. At the same time, the explanation given by the assessee that he is merely a salaried employee and has got no other income is not disputed by the lower authorities. Cash balances have to be held, both by the assessee in his place of stay and also by the family members in their ancestral house. It is also not in dispute that the assessee had to also take care of his ailing mother.
Accordingly, for the purpose of meeting the medical emergency of the ailing mother and for assessee and his wife, certainly reasonable amount of cash had to be kept in the house. Moreover, the assessee’s wife and ailing mother were living separately in the ancestral house of assessee. They should also hold reasonable amount of cash in their house for meeting the emergency needs.
Considering all these facts, the explanation given by the assessee cannot be completely brushed aside. However, we find that the monthly drawing in cash towards household expenses seems to be very low and is disproportionate to dual establishment maintained by the assessee. Considering the totality of the facts and circumstances of the case, we find that the assessee should be given further benefit of 4,50,000/-, out of total addition made by learned Assessing Officer of Rs.7,50,000/-. Accordingly, the addition that would ultimately sustain would only be Rs.3,00,000/- . Accordingly, grounds raised by the assessee are partly allowed.