CHANDRA KANT GUPTA,HALDWANI vs. CIT(A), NATIONAL FACELESS APPEAL CENTRE DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL, DEHRADUN CIRCUIT BENCH: DEHRADUN BEFORE,SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No.16/DDN/2022 (Assessment Year: 2017-18) Sh. Chandra Kant Gupta, Income Tax Officer, H. No. 6-668 Ward-2(1)(1), Haldwani, Ratanalaya,MohallaTalla, Vs Uttarakhand Gorakhpur, Opposite Canal Colony, Kaladhungi, Road S.O., Uttarakhand

PAN – BNCPG0604G (Appellant) (Respondent)

Appellant By Sh. Prashant Kaccar, Advocate Respondent by Sh. A.S. Rana, Sr. DR Date of Hearing 20.06.2023 Date of Pronouncement 23.06.2023

ORDER This is an appeal against order dated 11.03.2022 passed by

National Faceless Appeal Centre (NFAC) pertaining to assessment

year 2017-18.

before us, the only effective issue to be decided in this appeal is as

ITA No.16/DDN/2022 AY: 2017-18 to whether the learned 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.

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

ITA No.16/DDN/2022 AY: 2017-18 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.

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

ITA No.16/DDN/2022 AY: 2017-18 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).

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

ITA No.16/DDN/2022 AY: 2017-18 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.

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.

Government service was posted in different locations outside his

ITA No.16/DDN/2022 AY: 2017-18 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,

ITA No.16/DDN/2022 AY: 2017-18 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.

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.

Sd/- Sd/- (SAKTIJIT DEY) (M. BALAGANESH) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 23/06/2023 RK/Sr.PS 7

ITA No.16/DDN/2022 AY: 2017-18