BHARANI LATHA JAGANNATH,BENGALURU vs. INCOME TAX OFFICER, WARD-5(3)(2), BENGALURU

The brief facts of the case are that the assessee is an individual and filed her return of income on 09/03/2018 declaring her salary income in the return. The case of the assessee was selected for scrutiny for examining the cash deposits made during the demonetization period. Notice u/s. 143(2) was issued and thereafter notice u/s. 142(1) was also issued.

As against the said order, the assessee filed an appeal before the Ld.CIT(A) and contended that the cash deposit of Rs. 14,98,000/- made in the SVC Co-operative Bank Ltd. does not relates to her and it relates to the mother of the assessee which was wrongly considered in the assessee’s computation and prayed to allow the appeal. The assessee also furnished their written submissions along with the evidences for the cash deposits. The Ld.CIT(A) had also confirmed the addition made by the AO without considering the fact that the SB account in the SVC Co-operative Bank Ltd. is related to the assessee’s mother.

As against the said order, the assessee is in appeal before this Tribunal.

At the time of hearing, the Ld.AR submitted that the alleged cash deposits of Rs. 14,98,000/- does not belongs to the assessee and in support of the said claim, the Ld.AR also furnished the copy of the bank statement for the period from 01/04/2016 to 31/03/2017 which stood in the name of Bharathi- G. The Ld.AR also invites our attention to the reply filed by the assessee to the show cause notice issued by the AO and also the written submissions made before the Ld.CIT(A) in which the above said fact was reiterated by the assessee but unfortunately, both the authorities had not considered the said fact and arbitrarily, made the addition in the name of the assessee. The Ld.AR also furnished the copy of the statement of the joint loan account held with the SVC Co-operative Bank Ltd. The Ld.AR also submitted that the deposits of cash in the assessee’s State Bank of India account is also supported by the bank statements and also the explanation offered for the said cash deposits would establishes the fact that the deposits are having proper source and therefore, it could not be treated as an unexplained investment u/s. 69 of the Act. The Ld.AR also submitted that the cash available with the assessee and her mother and her grandmother were deposited into her bank account and therefore, the said amount could not be termed as unexplained investment u/s. 69 of the Act. The Ld.AR also draw our attention to the various submissions made before the AO as well as before the Ld.CIT(A) and prayed that the appeal may be allowed.

The Ld.DR submitted that the assessee had not explained the source for the said cash deposits in spite of several opportunities granted by the AO and therefore, the addition made u/s. 69 is in order.

We have heard the arguments of both sides and perused the materials available on record.

In the present appeal, the allegation made by the AO is that the assessee had deposited cash during the demonetization period into her State Bank of India account as well as in the SVC Co-operative Bank Ltd. account for which the source were not explained and therefore, the same are an unexplained investment u/s. 69 of the Act.

We have perused the assessment order in which the assessee had given explanations with regard to the cash deposits made into her bank account. Similarly, the assessee had also denied the cash deposit of Rs. 14,98,000/- made into the SVC Co-operative Bank Ltd. since the said account relates to her mother Smt. Bharathi -G. This fact was informed to the AO during the assessment proceedings particularly, while filing reply to the show cause notice but the AO had not considered the said plea while making the assessment. In fact, the assessee had also furnished the bank statement of SVC Co-operative Bank Ltd., in which it was clearly mentioned that the account belongs to Smt. Bharathi -G. The AO without discussing anything about the submission and also the document, had confirmed the addition u/s. 69 of the Act since the source for the said deposit was not explained and no documentary evidences were placed before the AO.

Before us, the assessee had again furnished the bank statement of the SVC Co- operative Bank Ltd. in respect of the account number 115803130002158 which stood in the name of Smt. Bharathi -G. The AO as well as the Ld.CIT(A) had failed to consider the said document and therefore, the addition made u/s. 69 of the Act in respect of the deposits made into the bank account of the assessee’s mother could not be sustained. We are, therefore, deleting the addition made u/s 69 of the Act.

Insofar as the addition of Rs. 1,94,000/- being the cash deposit made into the assessee’s bank account, we are satisfied that the assessee had properly explained the source for the said cash deposits, as seen from the various submissions given by the assessee before the AO as well as before the Ld.CIT(A). We have also perused the bank statement of the assessee and also the ITRs filed by the assessee in support of her contention that the assessee is having source for the said cash deposits. To disprove the said explanation offered by the assessee, there is no evidence available with the revenue and therefore, we are of the view that the said addition is also not warranted.

We, therefore, set aside the orders of the lower authorities by deleting the additions made u/s. 69 of the Act.

In the result, the appeal filed by the assessee is allowed.