MANGAYARKARASI SUBRAMANIAM,ERODE vs. ITO, NFAC, DELHI

Brief facts of the case are that as per AST/AIR information on ITD query, the assessee has deposited cash amounting to ₹.13,90,000/- in her saving bank account during the financial year 2012-13 relevant to the assessment year 2013-14. Since the assessee has not filed return of income, the Assessing Officer initiated proceedings under section 147 of the Income Tax Act, 1961 [“Act” in short] and notice under section 148 of the Act dated 18.09.2019 was issued to the assessee requiring her to file the return of income. Since the assessee has not complied with the notice issued under section 148 of the Act or various notices issued under section 142(1) of the Act or explained about the cash deposit of ₹.13,90,000/-, the Assessing Officer concluded best judgement assessment under section 147 r.w.s.144 r.w.s. 144B of the Act dated 15.09.2021 and brought to tax the entire unexplained cash credit of ₹.13,90,000/-. On appeal, the ld. CIT(A) (NAFC) confirmed the addition to the extent of ₹.10,00,000/- and partly allowed the appeal of the assessee.

On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that before the ld. CIT(A), by filing the bank statement, the assessee has explained in detail about the cash withdrawals and deposits into her saving bank account and overall there was a meagre deficit of ₹.29,000/- for which, the ld. CIT(A) has confirmed the addition to the extent of ₹.10 lakhs is not at all justified and prayed for deleting the addition.

On the other hand, the ld. DR supported the order passed by the ld. CIT(A).

Both the sides have been heard, perused the materials available on record and gone through the orders of authorities below. The only issue raised by the ld. Counsel for the assessee is with regard to the addition of ₹.13.90 lakhs. Before the ld. CIT(A), in support of the bank statement, the assessee has substantiated the utilization of the earlier withdrawals for the subsequent cash deposits into the bank account and the same are reproduced as under: Opening balance as on 01/04/2012- ₹.1,06,000/-. Used for depositing on 30/04/2012 – ₹.55,000/-; leaving a balance of ₹.51,000/-. Sums withdrawn on 05/06/2012 – ₹.6,00,000/- + on 21/07/2012= ₹.30,000/- + on 28/07/2012-₹.20,000/- + the balance of ₹.51,000/- comes to ₹.7,01,000/-. Out of the above, deposited on 10/08/2012= ₹.55,000/- + on 14/08/2012 – ₹.4,25,000/-; leaving a balance of ₹.2,21,000/- ; Sums withdrawn on 03/09/2012= ₹.3,00,000/- + on 08/09/2012= ₹.1,50,000/- + balance of ₹.2,21,000/- comes to ₹.6,71,000/-. Out of the above, deposited on 10/09/2012=

₹.7,00,000/- leaving a negative cash balance of ₹.29, 000/-; Sums withdrawn on 20/09/2012 – ₹.1,65,000/- leaving the balance of ₹.1,36,000/-; Out of the above, deposited on 03/11/2012 – ₹.1,00,000/-, leaving a balance of ₹.36,000/-; Sums withdrawn on 27/12/2012 – ₹.92,000/-, leaving a balance of ₹.1,28,000/-; Out of the above, deposited on 16/02/2.013 – ₹.55,000/-, leaving a balance of ₹. 73,000/-; Sums withdrawn on 30/03/2013- ₹.20,000/-, leaving a balance of ₹.93,000/-. From the above, it is established that barring a deficit of ₹.29,000/- mentioned above, all other cash deposits were out of earlier withdrawals and considering the savings habit of Indian women, this may be considered in the interest of justice.

In the appellate order, the ld. CIT(A) has observed that the assessee has not mentioned any reason as to why the cash was withdrawn and why it was kept with her only to be deposited back in the bank account. The ld. CIT(A) has not doubted that the monies were not belong to the assessee. When the monies belong to the assessee, it is her prerogative as to whether to keep the money in the bank or with her in cash. The deposits and withdrawals are as per the bank statement furnished before the ld. CIT(A) except barring a deficit of ₹.29,000/- only which was not disputed. Under the above facts and circumstances, the entire addition of ₹.13,90,000/- made by the Assessing Officer is hereby deleted

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