USHA RANI TALLA,CHITTOOR vs. INCOME TAX OFFICER, WARD-1, MADANAPALLE

The assessee has raised the following grounds of appeal:

“The order of the Id. First Appellate Authority confirming the order passed by Ld. Assessing Officer U/s 144 of the I. T. Act is arbitrary and contrary to the provisions of law and facts of the case. 2. The Id. First Appellate Authority is not justified in confirming addition made u/s 69A treating the entire cash deposit of Rs.12,69,522/- as unexplained money, not appreciating the submissions filed. 3. The Id. First Appellate Authority is not justified in not appreciating the sources for the deposits of cash in Bank during demonetisation period. 4. The appellant prays leave to add or amend or alter any of the grounds at the time of hearing of appeal.” 3. The assessee is an individual and has not filed her return of income for the year under consideration. The Assessing Officer received the information regarding the cash deposit aggregating to Rs.12,69,522/- in the bank account of the assessee during the demonetization period. Accordingly, the Assessing Officer issued notice under section 142(1) of the Income Tax Act [in short "the Act"], 1961 dated 14.03.2018 calling the assessee to file return on or before 31.03.2018. However, the assessee has not filed her return of income within the specified period allowed by the Assessing Officer. Thereafter, the Assessing Officer issued show cause notice calling for specific information and evidence regarding the source of the cash deposit. Finally, the assessee in her reply stated that she is an agriculturist and owned 07.00 acres of agriculture land and source of repayment of the gold loan is from the agricultural income and the balance amount of Rs.2,50,000/- was explained as source of her earlier withdrawal from the bank account. The Assessing Officer did not accept this explanation of the assessee and added the entire cash deposit of Rs.12,69,522/- to the income of the assessee. Assessee challenged the action of the Assessing Officer before the CIT(A) but could not succeed.

Before the Tribunal, the learned Authorised Representative of the Assessee has submitted that the repayment of the loan is clearly evident from the loan account statement wherein an amount was credited as loan of Rs.5 lakh each total amounting to Rs.10 lakhs which was withdrawn by the assessee and then, the loan was repaid on 17.11.2016. The learned Authorised Representative of the Assessee has referred to the Bank Account statement placed at pages 12 to 14 of the paper book. He has further submitted that as regards the remaining amount, there was an withdrawal of Rs.2,24,000/- from Bank Account which was deposited on 21.11.2016. Further, there was a withdrawal of Rs.1,96,000/- on 07.11.2016 therefore, the assessee was having enough amount on account of prior withdrawal and thereafter due to the demonetization of Specified Bank Notes [in short “SBNs”] the assessee has deposited the amount to the extent of Rs.2,50,000/- in the bank account. Thus, the learned Authorised Representative of the Assessee has submitted that the case of the assessee was not properly represented before the authorities below and in fact the loan account statement itself is showing the source and repayment.

On the other hand, the learned DR has submitted that the assessee has not produced any evidence before the Assessing Officer and did not file any return of income. There is a time gap between withdrawal from the bank account and repayment of the loan as well as deposit in the bank account. He has relied upon the orders of the authorities below.

I have considered the rival submissions as well as relevant material on record. The Assessing Officer has made an addition of Rs.12,69,000/- in Paras 2 and 3 as under:

In the result, appeal of the Assessee is allowed.