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Facts
The assessee challenged additions made by the Commissioner of Income Tax (Appeals) for AY 2017-18 concerning various receipts, including amounts from a share broker, bank interest, dividend income, ETF refund, unsecured loans, and significant cash deposits during the demonetization period, partly attributed to his mother's savings.
Held
The Tribunal ruled that the Revenue Authorities erred in treating most of the disputed amounts as income, specifically allowing the appeal for receipts from the share broker, bank interest, dividend income, ETF refund, and unsecured family loans. It also allowed the appeal regarding the cash deposits, acknowledging the mother's affidavit and the explanation for the source of funds.
Key Issues
Whether various financial receipts (share broker, interest, dividend, ETF refund, unsecured loans) constituted taxable income; and the taxability of cash deposited during demonetization, partly from the assessee's mother's long-held cash savings.
Sections Cited
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE
(Assessment Year: 2017-18) Talshibhai Ramjibhai Goti, Income Tax Officer, Vs. Nava Plot Area, Ward-1(9), Haliyad, Bhavnagar. Vallbhipur, Bhavnagar-364330. [PAN :AMGPG6996 F] (Appellant) .. (Respondent) Appellant by : Shri Rajesh C Shah, AR Respondent by: Shri Suresh Chand Meena, Sr DR Date of Hearing 02.07.2025 Date of Pronouncement 09.07.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal is filed by the Assessee against the appellate order dated 22.11.2024 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2017-18.
Heard the arguments of both the parties and perused the material available on record.
2.1 The assessee received monies as under that have been proved by documentary evidences, which are not in dispute :-
Talshibhai R Goti Vs. ITO Asst. Year : 2017-18 - 2– Sr. Particulars Amount of Credit Reference No. (Rs.) 1. Amount received 5,37,487 Para No.3.1 from Marwadi shares and Finance Limited 2. Bank Interest Income 5,982 Para No.3.2 3. Dividend Income 1816 Para No.3.3 4. Exchange Traded Fund 52,244 Para No.3.4 (ETF) 5. Loan received back 5,84,500 Para No.3.5 Copy of bank statement for the period under consideration is on record.
2.2 The details of the amount received from Marwadi Shares and Finance Limited are as under:- Sr.No. Date Amount(Rs.) 1. 26.04.2016 4,495.03 2. 27.07.2016 42,696.58 3. 11.08.2016 23,146.69 4. 07.09.2016 38,342.46 5. 04.02.2017 2,28,806.32 6. 01.03.2017 2,00,000.00 Total 5,37,487.08 2.3 Said amount can be verified from the bank statement as well as contra ledger account from the books of Marwadi Shares & Finance Limited. Copy of the bank statement and contra ledger of Mr. Talshibhai Rameshbhai Goti from the books of Marwadi Shares and Finance Limited are on record.
2.4 Further, under the head of Capital Gain, remaining amount Rs.3,37,487/-received from the share broker cannot be considered as an income since the entire amount received from the broker cannot be considered as an income. During the period under consideration, on Talshibhai R Goti Vs. ITO Asst. Year : 2017-18 - 3– account of the transactions made in securities, assessee has earned profit amounting to Rs. 39,005/-. Copy of the capital gain working is on record. Therefore, it is hereby held that the Revenue Authorities erred in making an addition of entire amount.
Further, we find the bank interest details which are as under:
Sr.No. Date Amount(Rs.) 1. 02.05.2016 739.00 2. 01.08.2016 367.00 3. 02.11.2016 744.00 4. 02.11.2016 4132.00 Total 5,982.00 3.1 The amount received on account of dividend income is as under:-
Sr.No. Date Amount(Rs.) 1. 09.08.2016 112.50 2. 03.10.2016 414.00 3. 15.11.2016 77.00 4. 27.01.2017 1,212.00 Total 1,815.50 3.2 On, 20.03.2024, the assessee has applied for CPSE ETF FFO wherein amount of Rs. 2,00,000/- was paid. However, on 29.03.2017, partial allotment was done and therefore, amount of Rs. 52,242.25/- was refunded back to the assessee. Therefore, it is nothing but the reversal entry and not the income.
Therefore, it is hereby held that the Revenue Authorities erred in making an addition of entire amount.
Talshibhai R Goti Vs. ITO Asst. Year : 2017-18 - 4– 4. With regard to the following credit entries amounting to Rs. 5,84,500/-, the assessee has submitted that the same are unsecured loan transactions with the family members, the details of which are under:-
Sr.No. Date Name of family Amount(Rs.) Member 1. 26.04.2016 Davalben Goti 20,000.00 2. 04.03.2017 Nareshbhai T Goti 1,94,500.00 3. 04.03.2017 Arshit D Goti 1,95,000.00 4. 13.03.2017 Alpesh Goti 1,75,000.00 Total 5,84,500.00 4.1 Since the factum of receipt of loan from the family members has not been in dispute and keeping in view the low quantum received from each family member, we hold that no addition is called for.
The Assessing Officer made an addition amounting to Rs. 10,80,500/- on account of the cash deposited in the bank account. Out of Rs. 10,80,500/-, Rs. 10,55,500/- was deposited in the demonetization period. The assessee submitted that out of Rs. 10,55,500/-, amount of Rs. 7,25,500/- was received from his mother viz., Ambaben Ramjibhai Goti. Reason for depositing the amount of his mother into his bank account was that his mother had earned few amount by making job work since last few years and earned the income in the form of cash. She is aged around 80 years during the period under consideration. Since, the aggregate amount earned by mother during a year did not exceed the maximum amount not chargeable to tax, she has not filed her return of income. However, she had earned the same and saved the same. The assessee submitted that suddenly, demonetization was declared and she did not have any bank account in her name. Therefore, she asked to deposit the said amount in Talshibhai R Goti Vs. ITO Asst. Year : 2017-18 - 5– his bank account. The affidavit of Ambaben Ramjibhai Goti affirming the same is on record. Further, the remaining amount of Rs. 3,55,000/- stands to earlier year saving and current year Income. Hence, keeping in view the entire facts and circumstances specific to the instant case which cannot be taken as a precedence in any other case, the appeal of the assessee on this issue is hereby allowed.
In the result, the appeal filed by the assessee is allowed.
The order is pronounced in the open Court on 09.07.2025.
Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 09.07.2025 MV देश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy