What did the Tribunal hold?

The Tribunal found that the assessee's explanation regarding withdrawals from bank accounts being used for deposits was not properly considered. Therefore, the issue of the Rs. 4,66,000/- addition was remanded back to the Assessing Officer for fresh consideration.

The assessee deposited Rs. 10,66,000/- in her bank account. She claimed the deposits were from the sale of land and withdrawals from other bank accounts. The Assessing Officer made an addition of Rs. 10,66,000/-, which was later reduced to Rs. 4,66,000/- by the CIT(A) after an earlier remand.

What were the issues?

Whether the assessee's explanation for cash deposits in her bank account, out of withdrawals from other accounts, was adequately considered by the revenue authorities.

Jagjit Kaur, Patiala vs ITO | ITAT Chandigarh 2020

आदेश/Order

Per N.K. Saini, Vice President:

This is an appeal by the assessee against the order dated 22.5.2019 of Ld. Commissioner of Income Tax (Appeals)-2, Gurgaon.

Following grounds have been raised in this appeal:-

1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A) in Appeal No. 06/2017-18 has erred in passing that order in contravention of the provisions of S. 250(6) of the Income Tax Act, 1961.

2. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein he

2 had made addition of Rs. 4,66,000/- in respect of alleged cash deposits in her bank accounts.

That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.

3. From the aforesaid grounds it would be clear that the only grievance of the assessee relates to the sustenance of the addition of Rs. 4,66,000/- out of the addition of Rs. 10,66,000/- made by the Assessing Officer.

Facts of the case in brief are that the assessee filed her return of income on 27.7.2020 declaring an income of Rs. 1,82,562/- which was processed u/s 143(1) of the Income Tax Act, 1961 (in short 'the Act') on 10.4.2011. Later on, the case was selected for scrutiny. The Assessing Officer during the course of assessment proceedings noticed that the assessee had deposited a sum of Rs. 10,66,000/- in her bank account maintained with Vijay Bank, Sector 17, Chandigarh on various dates. The claim of the assessee was that the amount deposited in her bank account were out of sale consideration of the land sold and the withdrawals from her bank account maintained with Vijaya Bank, Sector 17, Chandigarh and Punjab State Cooperative Bank, Sector 44, Chandigarh. The Assessing Officer, however, was not satisfied from the reply of the assessee and made the addition of Rs. 10,66,000/-.

Being aggrieved, the assessee carried the matter to the Ld. CIT(A) who dismissed the appeal ex-parte in limine. Thereafter, the 3 assessee filed an appeal before the ITAT wherein vide order dated 16.3.2017, the matter was restored to the file of the Ld. CIT(A) to decide the case on merits by giving reasonable and sufficient opportunity of hearing to the assessee. On the direction of the ITAT, the Ld. CIT(A) decided the appeal and allowed relief of Rs. 6 lacs which was deposited by the assessee out of the maturity amount of ICICI Insurance. The remaining addition of Rs. 4,66,000/- was sustained. Now the assessee is in appeal.

The Ld. Counsel for the assessee submitted that the assessee furnished a cash flow statement before the Assessing Officer as well as the Ld. CIT(A) wherein the source of deposits was stated to be withdrawals from bank accounts but neither the Assessing Officer nor the Ld. CIT(A) co-related those withdrawals with the deposits and made the addition in the hands of the assessee. Our attention was drawn towards page No.23 of the assessee’s paper book which is the copy of the aforesaid cash flow statement. It was submitted that had the entries of withdrawals were co-related with the amount deposited in the bank account then the deposits in the bank account was totally explained.

In his rival submissions, the Ld. Sr. DR strongly supported the impugned order passed by the Ld. CIT(A).

8. We have considered the submissions of both the parties and perused the materials available on record. In the present case it appears that in spite of the directions given by the ITAT in the decision dated 4 16.3.2017, the explanation of the assessee was not considered in right perspective, particularly the withdrawals from the bank account which were claimed to be utilised for making in deposits were not considered properly. We, therefore, keeping in view the peculiar facts of this case, deem it appropriate to remand this limited issue relating to the deposit of Rs. 4,66,000/- to the file of the Assessing Officer to be decided afresh in accordance with law and by considering the aforesaid claim of the assessee that the amount deposited was out of the withdrawals from the bank account and a cash flow statement was furnished for the said purpose.

In the result, the appeal of the assessee is allowed for statistical purposes. (Order Pronounced in the Court on 13.10.2020)

JAGJIT KAUR,PATIALA vs. ITO, CHANDIGARH

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