MRS SANJANA R. JAIN,MUMBAI vs. INCOME TAX WARD, 3(4), KALYAN , THANE

Per : Kuldip Singh, Judicial Member:

b) The Ld. CIT(A) has erred in treating the transaction of cash deposited during demonetization, as unexplained money and proceeded to continue to confirm the addition made by the Ld. AO without considering the facts and circumstances of the case. The same be considered and the additions be deleted. c) The CIT(A) has erred in confirming the addition made for Rs. 10,00,000/- by the Ld. AO u/s 69A of the Income Tax Act, 1961 without appreciating that the appellant had duly proved the Source and Nature of the Source of the cash deposited during demonetization. The additions made are merely on assumptions which are not sustainable in law. d) The Learned CIT(A) has erred in stating that the appellant has not furnished supporting documentary evidence without considering that appellant has filed the copy of bank account, Trading and P&L Account, Balance Sheet and Computation of Income. The same be considered and the additions be deleted e) The CIT(A) has failed to appreciate that the Ld. AO has made the additions on the assumption that the money deposited in Bank account is not recorded in the books of accounts of the appellant without appreciating the fact that the said amount is shown as closing balance in the balance sheet as on 31.03.2016. The Order passed on such basis is bad in law and needs to be quashed. f) The Ld. AO as well as the Ld. CIT(A) failed to consider that the appellant is an Individual having a business of Beauty Parlour & providing tuition to small children wherein income is earned only in cash in small denominations. The same be considered and the additions be deleted. g) The Ld. AO as well as the Ld. CIT(A) has erred in confirming the addition of Rs. 10,00,000/- on the ground that appellant has failed to disclose cash in Income Tax Return filed in Form ITR-2 without considering the facts that the assessee has duly disclosed cash in her books of accounts. The same be considered and the additions be deleted. h) The Ld. AO as well as the Ld. CIT(A) has erred in ascertaining the average monthly income of the appellant by taking the annual income of the appellant, but erred in not considering the opening cash in hand as per the submitted financial statements. The same be considered and the additions be deleted. i) The Ld. AO as well as the Ld. CIT(A) has failed to consider the cash balance in the books of accounts of the assessee without rejecting the books of accounts of the assessee u/s 145(3) of the Act. The same be considered and the additions be deleted.

3 Mrs. Sanjana R. Jain

The assessee craves leave add, alter or delete to the grounds of appeal at the time of or before hearing”

2. The assessee by filing an application sought to condone the delay of 04 days in filing the present appeal on the ground that she has received the order passed by the Ld. CIT(A) on 14.03.2022 through email, however, inadvertently the said email was received in spam hence could not be attended on time. But subsequently on verification of spam folder it was seen that the said order was received on 14.03.2022. From the reason stated by the assessee in her application for condonation of delay I find that this is a sufficient cause with the assessee being a small business women, she might not be conversant with the technicalities so the delay of 04 days is hereby condoned.

3. Briefly stated facts necessary for adjudication of the issues at hand are: the assessee is into the profession of tuition work and beauty parlor. The assessee’s return of income declaring total income of Rs.34,130/- was subjected to scrutiny to examine cash deposit during demonetization period. Necessary notices were issued under section 143(2) and 142(1) of the Income Tax Act,1961 (for short ‘the Act’) whereby the assessee was called upon to disclose her sources of income, copy of bank statements and sources of various cash deposits made during demonetization period. The assessee filed requisite evidence before the Assessing Officer (AO) viz. copy of bank statement, detail of cash deposits, income and expenditure account, balance sheet, capital account etc. but the AO recorded that no explanation regarding source of cash deposit has been filed by the assessee. From the bank statement the 4 Mrs. Sanjana R. Jain AO noticed that the assessee has made total cash deposit of demonetization currency amounting to Rs.10,50,000/- on six occasions till 29.11.2016. The assessee has shown total income or receipt from beauty parlor and tuition fee at Rs.8,15,785/- in the return of income filed for the year and has offered income under section 44AD at 8% on cash deposits. Declining the contentions raised by the assessee the AO proceeded to make addition of Rs.10,00,000/- as unexplained money under section 69A of the Act and thereby framed the assessment under section 143(3) of the Act.

4. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has confirmed the addition by dismissing the appeal. Feeling aggrieved assessee has come up before the Tribunal by way of filing present appeal.

Order pronounced in the open court on 23.12.2022.