HIRALAL SHIVLAL,MUMBAI vs. LD . ITO, 19(1)(5), MUMBAI

On the facts in circumstances of the appellant's case and in law the Ld. CIT(A) erred in holding that the cash deposited amounting to Rs.23,00,000/- as unexplained money and added to the total income u/s 69A of the Income Tax Act, 1961 without considering the fact that we have provided 100% evidence for the same.

The appellant craves leave to add to, alter, amend and/or delete all or any of the foregoing grounds of appeal.

During the course of hearing, the Ld.AR argued and withdrew ground No.1; hence the ground no-1 of the appeal is dismissed as withdrawn.

The brief facts of the case are that the assessee is a trader, wholesaler and retailer of the food grain. During the demonetization, the assessee deposited cash amount to Rs.1,03,50,000/- in his bank account. Out of the total deposit, the assessee declared amount of Rs.15 lakhs relatedSBNin Pradhan Mantri Garib Kalyan Yojana (in short, ‘PMGKY’). Accordingly, the assessment was completed and the Ld.AO restricted the addition amount to Rs.88,50,000/- after deducting Rs.15 lakhs deposited in PMGKY from the total deposit of Rs.1,03,50,000/-. So, the addition amount to Rs.88,50,000/- was added back under section 69A of the Act read with section 115BBE of the Act. The said order was assailed before the Ld. CIT(A). The Ld.CIT(A), after considering the submission of the assessee accepted the cash deposit made in the denomination in Rs.2,000/- notes and accepted the related deposit of the asseesse is genuine. Only the balance amount of Rs.15 lakh& Rs. 8 lakh which were deposited in SBN on 10/11/2016 and 17/11/2016, respectively were confirmed for addition. The balance amount of Rs.23 lakhs was sustained, and rest was deleted. Accordingly, the appeal of the assessee was partly allowed. Finally, the assessee filed an appeal before the ITAT by challenging the addition confirmed by the Ld.CIT(A) amount to Rs.23 lakhs.

We heard the rival submissions and considered the documents available in the records.The Ld.AR filed a written submission which is kept in the record. We have gone through the impugned order of the Ld.CIT(A). The paragraphs5.3.1 &5.3.2 of the alleged appeal order are reproduced as below: - “5.3.1 It was submitted that the cash deposited in the banks includes the Rs. 2000/-notes also and the same are on account of sales. It is seen that on 10.11.2016 the appellant had deposited Rs. 15,00,000/- in SBN and on 17.11.2016 Rs. 8,00,000/- has been deposited in SBN. The remaining amounts are deposited in the form of new currency only. The demonetization period was the unique period when all the specified bank notes have become illegal tender as the demonetization being announced to curb the black money. 5.3.2 In view of the above discussion, the AO is directed to restrict the addition to Rs. 23,00,000/- deposited in the form of SBN as the source of which remain unexplained and unsubstantiated. Appellant gets part relief. All the grounds raised in this appeal are partly allowed.”

The Ld. DR argued and relied on the order of the revenue authorities.

We find that the Ld.CIT(A) has only upheld the addition related to the deposit in SBN amount to Rs.15 lakhs and Rs.8 lakhs. The Ld. CIT(A) erred in confirming the addition amount to Rs.15 lakhs which was not the part of the addition in impugned assessment order and the assessee had obtained the PMGKY related the alleged deposit. So, the addition amount of Rs.15 lakhs is unjustified and liable to be deleted. Related the addition amount to Rs.8 lakhs, the ld. AR stated that the assessee is a regular trader of food grain. The assessee filed the return under section 139 and also the return filed in pursuance of notice under section 148 of the Act. Further, assessee declared the entire deposit in his turnover and declared in return of income.In argument the Ld. AR stated that books of accountwereproduced including thestock register which are not at all rejected by the Ld.AO during the time of assessment. Finally, the assessee has declared his turnover in VAT return and the month-wise details of sales and purchases was duly submitted before the revenue authorities. The ld. AO had not rejected any of the documents and the veracity of the evidence was not challenged. The assessee submitted comparative chart of month-wise cash deposits for F.Y. 2015-16 and FY 2016-17 which is reproduced as below: - FY 2015-16

अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकरआयुक्त CIT 4. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्डफ इल/Guard file.