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Income Tax Appellate Tribunal, VARANASI CIRCUIT BENCH, VARANASI
Before: SHRI. B. R. BASKARAN & SHRI AMIT SHUKLA
The aforesaid appeal has been filed by the Revenue against order dated 23.9.2020 passed by the ld. CIT(A), Varanasi for quantum of assessment passed under section 143(3) of the Income Tax Act, 1961. The assessee has filed cross objection in support of the order of the ld. CIT(A).
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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:
1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions of Rs.68,81,228/- when the AO has pointed out various infirmities on the credit and debit entries in the bank accounts of the assessee for the relevant assessment year.
2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions of Rs.68,67,000/- ignoring the fact that the assessee never explained the source of cash deposits during the course of assessment proceedings in spite of several opportunities were provided to him.
3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal based on concocted evidence produced during appellate proceeding in contravention of Rule 46A and also without examining authenticity of the said evidences.
4. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.14,228/- on account of interest income arises against the FDRs and not shown in the Income Tax Return.
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5. On the facts and circumstances of the case and in law, the Ld. CIT(A) is erroneous that the order passed by the AO is bad in law and therefore annulled.
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:
SI. Details of bank Amount in Remarks Date of No. Rs. cash deposit 1 Union Bank of 27.07.2016 5,50,000/- India A/c No- 353802010911282 2 Oriental Bank of 04.10.2016 16,50,000/ - commerce A/c No- 19562041000145 3 32,86,000/ During the Canara Bank A/c No- year under - 3203118000097 considerati on 4 Canara Bank OD During the 19,11,000/ year under - A/c No- considerati 3203257000041 on :-4-:
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 :-5-:
assessee. For the sake of ready reference, the chart is reproduced as under:
Date and amount SN Details of Bank (As per AO) Explanation 1 UBI A/c no 27/07/2016- Withdrawal of 5,52,000/- on same 353802010911282 Rs.5,50,000 date from A/c no 3203118000097 in Canara Bank.
2 OBC A/C no 04/10/2016 19562041000145 Rs.16,50,000/- Sale proceeds of land sold by wife 3 Canara Bank ac 32,86,000/- a. Total credits are only no deposited during 29,73,000/- only not 32,86,000/- 32031180000097 the whole year clear totaling error b. Rs 3,13,000/- transferred from mother c. Full cash flow 4 Canara Bank ac 19,11,000/- a. Funds transferred from self on no deposited during 02/04 Rs 6,34,000/, on 01/07 3203257000041 the whole year Rs.8,01,000/- and on 17/09 Rs.1,45,000/- and on 03/10 Rs.48,000/- Total Rs 16,20,000/- b. Several other contra entries
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 :-6-:
shows that the wife of the assessee has received sale consideration of Rs.16.50 lakhs from the sale of land and she has also filed an affidavit in this regard. This amount of sale deed was deposited in the joint bank account of his wife, Meena Devi and the assessee in Canara Bank, from where this amount has been withdrawn and deposited in the bank account of the assessee. Thus, this cannot be treated as unexplained.
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:
S.No. Name Amount 1 Shri Gauri Shanker Prasad Rs.5,35,426/- 2 Shri Asha Ram Rs.3,28,628/- :-7-: 3 Shri Radheyshyam Prasad Rs.7,75,175/- 4 Shri Goverdhan Rs.6,01,423/- Total Rs.22,40,662/-
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 :-8-:
order of the ld. CIT(A), has become infructuous. Accordingly, the same is dismissed as infructuous.
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.