INCOME TAX OFFICER, WARD - 02 (04),, BALLIA vs. PREM SHANKAR VERMA,, BALLIA

There is a delay of 14 days in filing of the cross objection. As per the application for condonation of delay, supported by the Medical Certificate of Dr. J. P. Shukla of Sharda Hospital, Ballia, we find that there was sufficient cause for delay in filing of the cross objection. Accordingly, we condone the delay and admit this cross objection for hearing.

The Revenue has raised the following grounds:

The brief facts of the case are that the assessee has filed return of income on 20.7.2017 declaring an income of Rs.8,23,290/-. The case was selected for limited scrutiny under CASS for examining the cash deposits in the bank accounts of the assessee. The Assessing Officer noted that the assessee is an employee of BSNL and have income from salary and income from interest at Rs.5,87,987/- and Rs.3,95,307/- respectively. The Assessing Officer noted that the assessee has made cash deposits in the following bank accounts:

In response to show cause notice, the assessee filed detailed explanation with regard to each and every amount of deposit mentioned in the aforesaid bank accounts. However, the Assessing Officer has summarily rejected the assessee’s explanation. With regard to the cash deposit of Rs.19,11,000/-, it was stated that the assessee had given explanation that this amount was received as loan from various persons and only few persons have returned the money, but in the absence of any verification, he has added the same to the income of the assessee. He further added an amount of Rs.14,228/- being interest.

The ld. CIT(A) has annulled the assessment on the ground that the Assessing Officer has passed the assessment order in violation of the CBDT instruction laying down the guidelines for limited scrutiny.

After hearing both the parties and on a perusal of the material placed on record, we find that the ld. CIT(A) was not correct in holding that the entire assessment should be annulled, because the case was selected for limited scrutiny for examining the cash deposits, for which addition has been made by the Assessing Officer. The only addition, which has been made beyond the limited scrutiny, is a minor sum of Rs.14,228/-. At the most, this addition is beyond the scope of limited scrutiny and hence this addition is deleted.

So far as the cash deposits are concerned, the assessee has furnished a chart giving the bank details, date and amount added by the Assessing Officer and the explanation of the

So far as the amount of Rs.5.50 lakhs is concerned, there is a withdrawal of Rs.5.52 lakhs on the same date, which is evident from the account No.3203118000097 of Canara Bank, the bank statement of which has been placed before us, which is appearing at page 220 of the paper book, from which we see that an amount of Rs.5.52 lakhs has been withdrawn and the same has been deposited in UBI account for making FDR.

So far as the deposit of Rs.16.50 lakhs is concerned, it has been explained that the same has come through sale proceeds of land sold by the assessee’s wife. The copy of sale deed is appearing in the paper book at pages 11 to 17, which

Sor as Rs.32.86 lakhs deposited during the whole year in the Canara Bank account is concerned, the total credits are of Rs.29.23 lakhs, out of which Rs.3.13 lakhs has been transferred from the bank account of the assessee’s mother, the details of which are appearing at page 218 of the paper book. Thus, to the extent of Rs.3.13 lakhs is treated as explained. Further, there is fund transfer of Rs.6.34 lakhs from the assessee’s own account on 2.4.2016, Rs.8.01 lakhs on 1.7.2016, Rs.1.45 lakhs on 17.9.2016 and Rs.48,000/- on 3.10.2016. This transfer of fund from the assessee’s own account cannot be treated as unexplained. Thus, the amount of Rs.16.20 lakhs is also directed to be deleted.

So far as the remaining amount of Rs.22,40,662/- is concerned, the assessee has stated that he has given loans to various parties, which were later on returned by the four undermentioned parties, whose confirmations are placed on record:

The ld. Counsel for the Assessee has stated that confirmations, affidavits, bank accounts and other credentials were sent by these parties directly to the Assessing Officer in response to the notices issued under section 133(6) of the Act, which have been ignored by the Assessing Officer. These documents are appearing at pages 46 to 217 of the paper book. From a perusal of these details, we find that notices under section 133(6) of the Act were issued to these parties, who have responded to the Assessing Officer along with the Income-tax returns, bank statements, confirmations and giving their other credentials directly to the Assessing Officer. There is no whisper by the Assessing Officer about these documents already on record. Once these documents were furnished and are part of record, then we do not find any reason as to why the source of this amount be treated as unexplained. Accordingly, the cash deposits of Rs.22,40,662/- stands explained.

In view of the aforesaid findings, the entire cash deposits of the assessee are treated as explained. Accordingly, on merits, the additions are deleted and consequently the Revenue’s appeal is dismissed.

Since we have dismissed the appeal of the Revenue, the cross objection filed by the assessee, which is in support of the

In the result, the appeal of the Revenue is dismissed and the cross objection of the assessee is dismissed. Order pronounced in the open court on 29.9.2023.