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Facts
The assessee filed a return of income and during demonetization, made substantial cash deposits in bank accounts. The Assessing Officer treated a portion of these deposits as unexplained income under Section 69A of the Income Tax Act. The assessee's appeal to the CIT(A) was dismissed.
Held
The Tribunal held that the assessee failed to provide evidence for the source of cash deposits and failed to rebut the findings of the CIT(A). Therefore, the addition made by the Assessing Officer was sustained.
Key Issues
Whether the cash deposits made during the demonetization period were adequately explained by the assessee and whether the findings of the lower authorities were correct.
Sections Cited
69A, 143(3), 115BBE, 271AAC
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Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA
Assessment Year: 2017-18 Arun Kumar Tandon v. ITO-4(1) Rama Niwas Lucknow New 15, A.P. Sen Road Charbagh, Lucknow TAN/PAN:ACEPT6448J (Appellant) (Respondent) Appellant by: None Respondent by: Shri Sunil Kumar Rajwanshi, D.R. Date of hearing: 06 02 2025 Date of pronouncement: 11 02 2025 O R D E R
This appeal has been preferred by the assessee against the order dated 21.08.2023, passed by the ld. Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2017-18.
The brief facts of the case are that the assessee filed his return of income for the year under consideration on 23.08.2017, declaring a total income of Rs.4,45,110/-. The case of the assessee was selected for scrutiny under CASS to examine the cash deposits made by the assessee during the demonetization period. The Income Tax Department was in possession of information that the assessee had deposited substantial cash in his Bank accounts during the demonetization period (09.11.2016 to 30.12.2016). The Assessing Officer (AO) issued statutory notices, requiring the assessee to explain the source of cash deposits in his bank accounts during the demonetization period. After considering the explanations furnished by the assessee, the AO treated Rs.2,23,500/- as unexplained money of the assessee out of the total deposits of Rs.7,23,500/- in old Specified Bank Notes (SBNs) during the demonetization period in Bank Account No.407010100069845 maintained with Axis Bank, Lucknow and added the same to the assessee’s income under section 69A of the Act.
2.1 Likewise, the assessee had made deposits to the tune of Rs.26,27,500/- in his Bank Account No.1890100031752 maintained with Yes Bank, Lucknow during the demonetization period. The submission of the assessee before the AO was that out of total deposits of Rs.26,27,500/-, Rs.24,27,500/- belonged to Shri Rupesh Kumar Singh and Rs.2,00,000/-belonged to Shri Gyan Shankar Shukla. To verify the contentions of the assessee, the AO issued summons to Shri Rupesh Kumar Singh and Shri Gyan Shankar Shukla. Shri Gyan Shakar Shukla attended before the AO and stated on oath that he had given Rs.2,00,000/- to the assessee before demonetization. Whereas Shri Rupesh Kumar Singh stated on oath before the AO that neither he had given any cash to the assessee nor had he deposited any cash in the assessee’s bank account during the demonetization period. The AO, after considering the depositions of Shri Rupesh Kumar Singh and Shri Gyan Shankar Shukla and also the submissions of the assessee, treated the amount of Rs.24,73,500/- as unexplained money and added the same to the income of the assessee under section 69A of the Act.
2.2 The AO completed the assessment under section 143(3) of the Act, computing the income of the assessee as under:
Returned income as per ITR : Rs.4,45,110/- Addition u/s. 69A of the Act : Rs.2,23,500/- Addition u/s. 69A of the Act : Rs.24,73,500/- Assessed income : Rs.31,42,100/- 2.3 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under section 271AAC of the Act.
3. Aggrieved, the assessee preferred an appeal before the NFAC who dismissed the appeal of the assessee after duly considering the submissions of the assessee.
Now, the assessee has approached this Tribunal challenging the order of the NFAC by raising the following grounds of appeal:
1. BECAUSE on the facts and in the circumstances of the case and in law the Ld CIT-A erred in passing the order dismissing the Appeal without giving reasonable and due consideration to evidences placed before him by the Appellant.
2. BECAUSE the order appealed against is contrary to facts, law and principles of natural justice.
BECAUSE the Appellant is Individual and is having limited income from rent and from interest and imposing such harsh order would make an irreparable damage to his finances and reputation 4. BECAUSE it appears that Ld CIT A has summarily decided the Appeal without devoting sufficient time and efforts and without going through the facts of the case diligently as a. Whereas the Learned Assessing Officer's order makes an addition of Rs 2697000/- the Ld CIT-A in his order in Para 5 quotes the same as Rs 2997000/- b. Whereas total deposit in both the banks of the assessee add up to Rs 3351000/- the Ld CIT-A in his order in Para 5 stated the same to be Rs 2673500/- 5. BECAUSE the past savings were not allowed by the Ld CIT-A only because in his order he states that NO EVIDENCE HAS BEEN FILED BEFORE ME HOW THE INCOME IN CASH ACCRUED TO THE APPELLANT. It is not necessary that THE PAST SAVINGS CAN BE ONLY OUT OF INCOME THAT ACCRUES IN CASH. It can be left over sums withdrawn from the bank for meeting normal expenses over a period of time.
6. BECAUSE while disallowing the sum attributable to appellant's son the Ld CIT-A has taken the plea that NO BANK STATEMENT OR PROOF OF WITHDRAWAL FROM THE SON HAS BEEN FILED. It is a standard practice in merchant navy that whenever the ship anchors at any port the sailors are allowed days off till the ship sets sail again and some out of pocket allowance are given to meet their personal expenses. The Appellant's son saved all that he could over the period.
None was present for the assessee when the appeal was called out for hearing nor was any adjournment application moved in this regard. I find that the notice issued to the assessee for fixing the appeal for hearing on 06.02.2025 has been returned un-served by the postal authorities with the remark “द�रयाद करने पर पता चला �ा�त कता� कह�ं बाहर चले गए। अथ �ेषक को वापस”. The notice was sent to the assessee on the address given in Form No.36. A perusal of order sheet entries shows that this appeal was registered by the Registry of the ITAT on 19.10.2023 and since then the appeal has been fixed for hearing for as many as 13 times and hearing had to be adjourned on each such occasion either at the request of the assessee or for the simple reason that no one was present on behalf of the assessee to present the case of the assessee. Therefore, in view of continuous non-compliance of the assessee, I have no option but to proceed to adjudicate the appeal ex-parte qua the assessee.
6. I have heard the Ld. Sr. D.R. and perused the material on record. I find that the ld. CIT(A) has considered the material on record and has, thereafter, passed a speaking order. For a ready reference, the observations of the ld. CIT(A) are being reproduced hereunder:
“5. Decision: In this case, the addition has been made by the Assessing Officer worth Rs.29,97,000/- as cash deposited during demonetization period by not explain properly before Assessing Officer. Total deposit in the bank accounts of the appellant was Rs.26,73,500/-. During the course of scrutiny, the appellant stated that the cash deposits belong to Shri Rupesh Kumar Singh of Rs.24,27,500/- and Shri Gyan Shankar Shukla of Rs.2,00,000/-. The statement of Shri Gyan Shankar Shukla was recorded on 17.12.2019 and he accepted that he has deposited Rs.2,00,000/- in the bank accounts. The statement of Shri Rupesh Kumar Singh was also recorded on 22.12.2019 but he denied that he has not given any cash to the appellant during demonetization period. Hence, the Assessing Officer made the addition of Rs.24,73,500/- as claimed from Shri Rupesh Kumar Singh. 5.1 Now before me in the appellate proceedings, the written submission has been filed. I have gone through the written submission. The appellant has stated that Rs.3,14,500/- was deposited out of the past savings. No evidence has been filed before me how the income in cash accrued to the appellant. Source of cash deposits has not been explained before me. Hence, the deposit of Rs.3,14,500/- remains unexplained. There is further mention of Rs.4,09,000/- from the savings of NRI son. No bank statement or proof of withdrawal from the son has been filed. No documentary evidence of these deposit was filed before the Assessing Officer and before me in the appellate proceedings. Hence, this deposit of Rs.4,09,000/-remains unexplained. There is mention of cash deposit from Shri Rupesh Kumar Singh. He has denied any transaction with the appellant before the Assessing Officer in the statement recorded on oath as well as in the affidavit. Hence, the addition of the Assessing Officer is sustained as Shri Rupesh Kumar Singh has clearly denied the transaction and appeal of the appellant is dismissed.
In the result, the appeal of the appellant is dismissed.”
There has been no effort on the part of the assessee to rebut the findings of the ld. CIT(A) in the appeal before the Tribunal and accordingly, I do not find any error in the order of the ld. CIT(A), who has decided the issue correctly on facts before him. I accordingly confirm the order of the ld. CIT(A) and reject the grounds of appeal taken by the assessee.
In the result, appeal of the assessee stands dismissed.
Order pronounced in the open Court on 11/02/2025.