SATISH CHAND TYAGI,GHAZIABAD vs. ITO WARD - 2(4), GHAZIABAD

Brief fact of the case shows that the assessee is an individual. She is engaged in medical profession as well as a partner in the firm. The assessee filed her return of income for Assessment Year 2010-11 on 01.04.2011 at Rs. 661270/-.

AIR information was received that the assessee has deposited cash of Rs. 13,22,005/- in her savings bank account with Oriental Bank of Commerce. The ld AO issued three letters to the assessee for verification of above information but no reply was filed. Therefore, the ld AO issued notice u/s 148 of the Act on 27.03.2017. The ld AO also issued notice u/s 142(1) of the Act on 09.05.2017. The AO did not comply with several query letters and therefore the ld AO passed an order making addition of the above sum treating it as income from other sources and as unexplained cash credit u/s 68 of the Act. The order was passed u/s 143(3) read with section 147 of the Act on 26.12.2017 determining total income of the assessee on 19,83,275/-. 5. Assessee aggrieved with the order preferred an appeal before the ld CIT (A). Before the ld CIT(A) the assessee submitted that cash has been deposited out of professional service fees , out of opening cash balance available and sums received from a partnership firm where she is a partner i.e. Priyadarshi Hospital. The assessee also supported that with computation of income and statement of affairs as on 31.03.2010. The LD CIT (A) dismissed the appeal of the assessee as the ledger account submitted of Priyadarshini Hospital (Firm) were unauthenticated and on the ledger account PAN was not mentioned. The cash deposited therefore, were held to be not correlated hence, and confirmed the addition. The assessee aggrieved with the above order has preferred this appeal before us. 6. The ld AR submitted that the assessee is a Doctor and carrying on private practice as well as partner in M/s. Priyadarshi Hospital. The assessee submitted that assessee has deposited total cash of Rs. 15,11,182/-. The source of deposit was opening cash balance of Rs. 325492/-, out of Page | 2 individual professional fee received of Rs. 885690/- and receipt from Priyadarshi Hospital of Rs. 3 lakhs. The assessee also explained the withdrawal of Rs. 125000/- from the bank. In view of this it was submitted that the addition made is already accounted for as income of the assessee. He also supported the details with balance sheet, copy of the bank statement. He also submitted that the issue is squarely covered in favour of the assessee by the decision of ITAT in case of Shri Vipin Sirohi dated 12.02.2015.

The ld DR vehemently supported the orders of the lower authorities.

We have carefully considered the rival contentions and find that undoubtedly assessee has deposited cash in the bank account amounting to Rs. 1322005/- in her savings bank account with Oriental Bank of Commerce.

With respect to reopening of the assessment, we do not find any fault with the action of the ld AO, as the information was received from AIR and the return of income of the assessee did not show the complete details about the above deposit. Further, in response to the query letters of the AO, assessee did not reply. Therefore, AO has reason to believe about escapement of income. Thus ground no 1 is dismissed.

Though the assessee has supported the same with the cash flow statement as well as the sum received from her professional practice and from partnership firm. The LD CIT (A) disregarded all these facts as the ledger account was unauthenticated and PAN of the partnership firm was not mentioned in the account. We find that when the assessee filed her return of income she included the professional income of Rs. 518831/- as well as remuneration and interest from partnership firm of Priyadarshi Hospital Rs. 219415/-. Her individual gross receipt from private practice shows Gross professional income of Rs. 885690/- which was deposited in that bank account. While explaining the source the assessee has categorically stated that, the above professional receipt was deposited in the bank account of the assessee. Therefore, addition to that extent naturally amounts to double addition. Further, it was also stated that she was having opening cash balance in hand of Rs. 325492/- which was also deposited. Therefore, the addition on that account also deserves to be deleted in absence of any other finding contrary by the revenue. This left us the sum of Rs. 3 lakh received by the assessee from Priyadarshi Hospital. The assessee was a partner in that firm. Undoubtedly, the account submitted by the assessee was not authenticated by stating the PAN. We also do not find information about return of income etc of that firm in the paper book submitted by the assessee. In view of this, we direct the ld AO to delete the addition to the extent of Rs. 325492/- and Rs. 885690/-. However, with respect to the receipt of Rs. 3 lakhs from Priyadarshi Hospital requires proper verification. Accordingly, to that extent only, we set aside the issue of verification of cash receipt of only Rs. 3 lakh from Priyadarshi Hospital by the assessee back to the file of the ld AO with a direction to the assessee to submit the authentic ledger stating PAN of that partnership firm. The LD AO may examine the same and decide the issue to that extent afresh. Thus, Ground no 2 is allowed with above directions.

Accordingly, appeal of the assessee is partly allowed deleting the addition to the extent of Rs. 325492/- and Rs. 885690/-.

The LD AR submitted that assessee is a partner in Priyadarshi Hospital as well as carrying on his professional practice. The assessee also submitted that he has opening cash in hand of Rs. 343108/- and professional fees receipt of Rs. 685010/-. He received Rs. 3 lakhs from Priyadarshi Hospital as remuneration and further Rs. 48000/- as gift from relatives therefore, the total deposit of Rs. 1376118/- deposit in the bank account are fully Page | 4