SHRI SUNIL KUMAR,ETAH vs. ITO WARD 3(2), ETAH

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA

BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER,AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER

I.T.A No.120/Agra/2017 (ASSESSMENT YEAR-2009-10)

Sunil Kumar, Vs.. ITO-, Ward 3(2), 27, Sunhari Nagar, Etah. Etah. PAN:ARUPK5860F (Appellant) (Respondent)

Appellant by Shri Deependra Mohan, CA. Assessee by Shri Waseem Arshad, Sr. DR.

Date of Hearing 01.08.2019 Date of Pronouncement 08.08.2019

ORDER Per Dr. M. L. Meena, A.M.: This caption appeal emanates from the order of the ld. Commissioner of Income Tax (Appeals), Aligarh [(in short ‘the ld. CIT(A)], dated 15.11.2016, where delay of 60 days in filing this appeal, contending that the assessee’s wife was severely ill and was hospitalized is accepted and delay is condoned. 2. The assessee has raised the following grounds of appeal: “1) That the Hon'ble CIT(A) has erred in law and on facts in not quashing the assessment proceedings initiated u/s 147 of the Act, by issuing notice u/s 148 of the Act, merely relying on the AIR information.

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2) That the authorities below have erred in law and on facts in adding the peak balance of Rs. 10,00,000/- in bank account of the Appellant maintained at ICICI Bank. 3) That the authorities below have erred in law and on facts in ignoring the fact that the deposits made by the Appellant in his bank account were all explained and there was no unexplained income. 4) That the order passed by the authorities below is bad in law and against the facts of the case. 5) That any other relief or reliefs deemed fit in the facts and circumstance of the case may be granted. The appellant craves leave to add, alter or vary the grounds of appeal before or at the time of hearing.” 3. Apropos ground no. 2 assessee has challenged that the CIT(A) has erred in law and on facts in confirming the addition of Rs. 10 lacs on account of peak balance in bank account maintained at ICICI Bank. 4. The AO has received information regarding cash deposit of Rs.14,20,000/- in the saving bank account of the assessee with ICICI Bank Etah. Accordingly, issued notice u/s 148 on 16.01.2014 during the course of assessment proceedings u/s 143(3)/144 r.w.s. 147. The AO being not satisfied with the explanation offered by the assessee regarding source of deposit in his bank account made addition of an amount of Rs.10 lacs towards total income against peak balance of the Financial Year. 5. In appeal the ld. CIT(A) has confirmed the finding of the AO by observing vide para 7.2 as follows:

“7.2 Decision

Through these grounds, the appellant is challenging the AO’s action of adding an amount of Rs. 10,00,000/- on the basis of deposits in appellant’s saving bank account. To explain this amount, the appellant has given two arguments:-(i) An amount

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of Rs. 3,50,000/- has been deposited by his father who is an agriculturist and (ii) rest of the deposits are out of the past saving of the appellant. In the remand report, the AO has submitted that the appellant’s father Shri Ram Singh has only 0.7378 hectare agricultural land which would not yield agricultural income of more than 60,000/-. Further, it has been submitted that there is no documentary evidence which would substantiate that Shri Ram Singh had received Rs. 3.5 lakhs from sale of agricultural produce. Regarding the past savings, the AO has submitted that appellant has no documentary evidence to establish savings of Rs. 6.5 Lakhs in cash. I have considered the facts and circumstances of the case. In my opinion, e is not enough material on record which would explain the source of cash deposits in the appellant’s savings bank account. The appellant being a government servant is not expected to deal with cash so frequently. Further, there is no evidence that the appellant had withdrawn sufficient amount of cash in the past which was being carried over as cash in hand and was deposited during the relevant financial year. Also, there is no evidence to establish that an amount of Rs. 3.5 Lakhs deposited in cash has arisen out of the agricultural receipts of appellant’s father. Whatever little agricultural land he has would not generate any significant amount of surplus after taking care of his own needs.

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In view of the above, I hold that the appellant has failed to explain the source of cash deposits in the bank account and the addition of Rs. 10,00,000/-made by the AO on this account is being confirmed and these grounds are being dismissed.” 6. The ld. Counsel for the assessee submitted that the assessee was Junior Engineer of U.P. Irrigation Department and he filed its return of income in compliance to notice u/s 148 on the basis of Form-16 issued by irrigation Department for year under reference on 17.3.2015 declaring income of Rs.2,19,153/- ; that assessee has filed a cash flow statement with opening cash balance at hand of Rs.5,50,000/- with a breakup of Rs.3,50,000/- out of father’s agricultural income and Rs.2 lacs old savings besides Rs. 5 lacs received by transfer entry from his wife from Mrs. Neelam Yadav. Thus, the entire peak cash credits of Rs.10 lacs in the bank account of the assessee. He urged that the appeal of the assessee may be allowed. 7. Per contra, the ld. DR has placed strong reliance on the impugned order. 8. Heard. It is not disputed the assessee is a government servant. From the perusal of the cash flow statement which is self explanatory we find that working peak cash credit by the AO is factually incorrect. Explanation of the assessee and added that the assessee was a government servant as Junior Engineer in the Irrigation Department of the State Government shown opening balance of Rs. 2 lac out of his personal savings and Rs.3.5 lacs against agricultural income of his father from agricultural land and Rs.5 lacs received by transfer entry vide cheque on 20.09.2008 from his wife Mrs. Neelam Yadav in his bank account no. 81001500755. It makes abundantly clear that the AO has not appreciated the facts on record by computing the peak balance of the assessee in view of that matter. The cash flow statement submitted by the counsel for the assessee is not disputed by the ld. DR.

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Sd/- Sd/- (Laliet Kumar) (Dr. M.L. Meena) JUDICIAL MEMBER ACCOUNTANT MEMBER *AKV* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT Sr. PRIVATE SECRETARY ITAT, AGRA