KAMLA,REWARI vs. ITO WARD - 1, REWARI

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ITA 7300/DEL/2019Status: DisposedITAT Delhi26 October 2022AY 2011-124 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the CIT(A)'s ad-hoc relief was not properly addressed, and the assessee's explanation regarding her business and past savings was plausible. The addition was directed to be deleted.

What were the facts?

The assessee's bank account had deposits, and the Assessing Officer (AO) made an addition of Rs. 14,05,600 due to lack of supporting documents for the source of funds. The CIT(A) confirmed an addition of Rs. 9,05,600 after granting partial relief.

What were the issues?

Whether the addition made by the AO and sustained by the CIT(A) on account of unexplained bank deposits was justified, considering the assessee's explanation and the partial acceptance of certain deposits.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,

Before: SMT DIVA SINGH

For Respondent: Shri Om Prakash, Sr. DR
Hearing: 25.10.2022Pronounced: 26.10.2022

The present appeal has been filed by the assessee wherein the correctness of the order dated 05.07.2019 of CIT(A), Rohtak pertaining to 2011-12 assessment year is assailed on the ground that the addition sustained by the ld. CIT(A) was unwarranted on the facts.

2.

At the time of hearing, an application for adjournment has been moved. However, considering the record, it was rejected and deemed appropriate to proceed with the present appeal exparte qua the appellant- assessee on merits.

3.

After hearing the ld. Sr. DR, the relevant facts of the case are that certain deposits have been made in assessee’s bank account. Considering the record the explanation was partly accepted to the extent that she had received gifts from her sister-in-law and mother in law amounting to Rs. 4,02,200/- and that Rs. 17,90,000/- deposited therein from withdrawals made from the very same bank account stood explained. However due to non availability of supporting documents, the Assessing Officer made addition of Rs. 14,05,600.

4.

As per the reply dated 05.12.2018 extracted in the assessment order, it is seen that the Assessing Officer discarded the explanation wherein the assessee explained that she was engaged in the business of job works of stitching, sewing etc at her residence from last 12 years. She also pleaded that she was not maintaining any saving or current account and this account was opened only in the year under consideration. Holding that the onus to prove was not discharged, the Assessing Officer discarded the explanation.

5.

The assessee carried the matter before the first appellate authority who granted part relief holding as under:

“Considering the assessee’s reply that assessee had past savings, gross receipts of business of sewing, stiching etc., realization from debtors, gifts and return of income of Rs 1,76,050/-, a benefit of Rs 5 lacs is being given to the assessee out of addition made of Rs 14,05,600/- in view of the fact that she would have received some gifts and must have got some personal savings. No further benefit can be given as no documentary evidence other than for the gifts received of Rs 8,04,400/- (for which relief has been already given by the AO) was furnished during the appellate proceedings. Addition of Rs 9,05,600/- is confirmed as the onus to establish the source of money deposited in the bank was on the assessee and she has failed to discharge the onus. This amount is her income from undisclosed sources on which tax is payable as per provisions of the Act.”

6.

I have gone through the material available on record and have heard the submissions of the ld. Sr. DR. I find that the adhoc relief of Rs. 5 lakhs on the reasoning that the assessee failed to give any evidence for past savings, income from business of sewing, stitching etc, gifts and realization from debtors etc wherein on facts it is pleaded that she maintained no bank account till recently remains unaddressed. The fact that she was working in the unorganized sector and the status of deposits and withdrawals of amount of Rs. 17,60,050/- has been accepted by the Assessing Officer himself and the ld. CIT(A) has also accepted the fact that the claims were valid. Thus, the fact that the assessee was engaged in the said activity running from her residence for the past few years has admittedly been accepted by the Revenue. Thus in the said backdrop, why the benefit of Stridhan, past savings and gifts etc. is arbitrarily accepted partly is not addressed in the order. Considering the explanation and status accepted by authorities below, the explanation is plausible. The addition accordingly is directed to be deleted. Said order was pronounced in the open court at the time of hearing itself.

9.

Accordingly, the appeal filed by the assessee is allowed. Said order was pronounced in open court on 26th October, 2022.

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