SHRI BALASUBRAMANIAN SEKAR,CHENNAI vs. ITO, NCC-16(1), CHENNAI

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ITA 3087/CHNY/2019Status: DisposedITAT Chennai12 March 2020AY 2016-175 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee provided a substantial explanation for the cash deposits, supported by bank statements and a sale deed. The delay in redepositing the funds was within a reasonable period of forty days.

What were the facts?

The assessee deposited cash of Rs. 10,87,000 into a joint bank account. The Assessing Officer made an addition for this amount, which was partly deleted by the CIT(A). The assessee explained that the major portion of the deposit was from cash withdrawn earlier for property purchase, which was delayed and hence redeposited.

What were the issues?

Whether the cash deposits made by the assessee into their bank account were adequately explained and whether the addition made by the Assessing Officer was justified.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ (SMC

Before: SHRI GEORGE MATHAN

Hearing: 12.03.2020Pronounced: 12.03.2020

आदेश / O R D E R

PER GEORGE MATHAN, JUDICIAL MEMBER:

1.

This is an appeal filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-4, Chennai in I.T.A No.40/2018-19/A.Y.2016-17/CIT(A)-4 dated 09.10.2019 for the Assessment Year 2016-17.

2.

None represented on behalf of the Assessee and Ms. R. Anitha, JCIT represented on behalf of the Revenue.

3.

Written submission has been filed on behalf of the assessee. The written submission is extracted hereunder below:

---------------------------------------------------------------------------------------------------- “The Member Income Tax Appellate Tribunal D – Bench, Chennai. Respected Sir, Sub: Written reply at the time of personal hearing on 07/01/2020. Ref: Mr. Sekar Balasubramanian – PAN-AFGPB 6367L-I.T.A. No.1 CHNY/2019- A.Y.2016-17. With reference to the above, I wish to state as follows over and above the grounds of Appeal filed along with Form-36.

1. The total addition amounting to Rs.10,87,000 is towards cash deposited on various dates (5 occasions) in the joint account held by the Appellant and his wife Mrs. Sangeetha Sekar.

2. The details of cash deposit and source for the same as stated before the Assessing Officer are as given below:

3. Sl.No. Date Amount Source 1. 12.04.2015 15,000 The addition of Rs.88,000 is frivolous considering he fact that the Appellant has 2. 13.04.2015 35,000 taxable income of Rs.17,17L and his wife has admitted an income of Rs.7.28 L and 3. 26.07.2015 30,000 substantiated by earlier withdrawal from banks. 4. 09.08.2015 8,000 5. 20.01.2016 9,99,000 From cash withdrawn on 10.12.2015 Rs.5.00 L and on 12.12.2015 Rs.6.25 L for registering the property and doing certain modifications to make the property suitable for residence However, securing possession and registration of property got delayed and hence deposited back. 6. 20.01.2016 1,00,000 Accepted by CIT(A) and addition deleted since withdrawal and deposits were on the same day. 7. 20.01.2016 2,00,000 ………….Do………………

4. CIT(A) accepted for deletion of addition of cash deposit of Rs.3,00,000 (Sl.No.6 & 7 above) and sustained addition of Rs.10,87,000 (Sl. No.1 to 5 above) stating “preponderance of probabilities.”

5. To apply preponderance of probabilities, the department has to come with material evidence which weighs more against the appellant and in the appellant case no material evidence was produced by the Department.

6. On the contrary, appellant has furnished source for the deposit which has not been disproved. Therefore, the preponderance of probabilities is in favour of the appellant.

7. Appellant in his grounds of appeal (Para-4) relied on judicial rulings in his favour which squarely apply to his facts. (copy of the judgements enclosed for ready reference).

8. In view of the above, appellant prays for deletion demand. V. Swaminathan Chartered Accountant Authorized Representative Sd/- Chennai Date: 07.01.2020” ---------------------------------------------------------------------------------------------------- 4. It is in the written submission that the assessee has submitted that the Assessing Officer has made an addition of Rs.10,87,000/- which was basically the amount which had been withdrawn by the assessee on the earlier occasions but was re-deposited in the same bank account. It was submitted that the maximum amount of Rs.9,99,000/- was out of the cash withdrawal on 10.12.2015 and 12.12.2015 which was withdrawn for the purpose of registering a property and for doing certain modifications of the said property and as the registration got delayed, the money were deposited back. The assessee has also placed copies of the Bank passbook showing the withdrawal and the deposits.

5. In reply, the learned Departmental Representative vehemently supported the order of the learned Assessing Officer and the learned Commissioner of Income Tax (Appeals). It was a submission that the assessee has not explained as to why there was such a long delay in re-depositing the money nor has the assessee shown what he had done with the money during the period he was holding it. It was a submission that the addition as confirmed by the learned Commissioner of Income Tax (Appeals) was liable to be upheld.

6.

I have considered the rival submissions and perused the materials available on record.

7.

A perusal of the facts in the present case shows that the major amount of Rs.9,99,000 was out of the withdrawal on 10.12.2015 and 12.12.2015. The same was deposited on 20.01.2016 within a period of just forty days. The assessee had also given explanation and the explanation is also not found to be false. The assessee has also placed a copy of the sale deed in respect of the purchase of the property which has been done on 12th February, 2016. Thus, the 5 -: assessee has given substantial explanation. These explanations also have not been found to be false. This being so, I am of the view that the explanations given by the assessee in respect of the deposits of cash to the extent of Rs.10,87,000/- is explained. Consequently, the additions as confirmed by the learned Commissioner of Income Tax (Appeals) stands deleted.

8.

In the result, the appeal of the assessee in is allowed.

Order pronounced in the open Court on 12th March, 2020 in Chennai.

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