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Facts
The assessee filed her return of income declaring Rs.1,89,995. The Assessing Officer reopened the case under section 147, alleging escaped income due to a Rs.10 lakh cash deposit in the bank and property investments. The AO added Rs.10 lakhs as unexplained money, Rs.29,000 for capital gains, and Rs.16,215 under section 80C.
Held
The Tribunal found that the assessee had provided a cash flow statement and confirmation letters explaining the source of the Rs.10 lakh deposit. The Tribunal held that the assessee had discharged her initial onus of proving the source of the deposit and the Revenue had not brought any contrary material on record.
Key Issues
Whether the addition of Rs.10 lakhs as unexplained money made by the Assessing Officer and confirmed by the CIT(A) is sustainable in law.
Sections Cited
147, 148, 69A, 50C, 80C, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH : NAGPUR
Before: SHRI V. DURGA RAO
ORDER PER V. DURGA RAO, J.M. : This appeal has been filed by the assessee against the order dated 20.03.2024, of the learned Addl./JCIT(A)-1, Kolkata, relating to assessment year 2010-2011. 2. Briefly stated facts of the case are that the assessee is an individual and filed her return of income on 23.03.2015 declaring income of Rs.1,89,995/-. On an information received from ITO, 2 ITA.No.233/NAG./2024 Ward-3(4), Nagpur to the effect that assessee has deposited cash in her bank account and invested in various immovable properties, the case of the assessee has been reopened u/sec.147 of the Act as there was a reason to believe that the income chargeable to tax has escaped assessment and statutory notice u/sec.148 of the Act dated 20.03.2015 was issued and served upon the assessee. The Assessing Officer noted that the assessee has deposited cash of Rs.10 lakhs on 30.03.2010 in the Indian Overseas Bank, Ramnagar, Nagpur and cheque was also issued on the same date for purchase of part- payment of flat. He, therefore, called for explanation of the assessee. The assessee, in response thereto, filed her cash flow statement, certain confirmation letter from parties wherefrom assessee allegedly received back the advanced money amounting to Rs.7,90,000/-. However, the Assessing Officer has not satisfied with the explanation offered by the assessee and made the impugned addition of Rs.10 lakhs as unexplained money u/sec.69A of the Act; differential amount of capital gain addition of Rs.29,000/- u/sec.50C of the Act and addition of Rs.16,215/- u/sec.80C of the Act and completed assessment u/sec.143(3) r.w.s.147 of the Act vide order dated 3 ITA.No.233/NAG./2024 30.03.2016 by determining the total income of the assessee at Rs.12,35,310/- as against the returned income of Rs.1,89,995/-.
Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the learned CIT(A) by reiterations the submissions made during the course of assessment proceedings. The learned CIT(A) confirmed the order of the Assessing Officer as he was not satisfied with the explanation of the assessee.
Aggrieved by the order of the learned CIT(A), the assessee carried the matter in appeal before the Tribunal contending, inter alia, that the impugned addition of Rs.10 lakhs made by the Assessing Officer and confirmed by the learned CIT(A) is not in accordance with law.
During the course of hearing, Learned Counsel for the Assessee submitted that though the impugned amount of Rs.10 lakhs deposited in the Bank and such transaction was through banking channel, which stands fully explained on the face of record, both the authorities below are failed to consider the explanation of the assessee and made the impugned addition of Rs.10 lakhs which is not sustainable in the eye of law. He, therefore, submitted that that 4 ITA.No.233/NAG./2024 the addition made by the Assessing Officer and confirmed by the learned CIT(A) be deleted in the interest of justice.
The Learned DR on the other hand vehemently relied on the orders of the lower authorities. He submitted that the Assessing Officer has rightly made the addition of Rs.10 lakhs as the assessee has failed to prove the source of the cash deposit. Even before the learned CIT(A) also, the assessee simply reiterated her submissions and therefore, the learned CIT(A) rightly confirmed the order of the Assessing Officer. He, therefore, submitted that the orders of the lower authorities be confirmed.
I have heard rival submissions of both the parties and perused the material on record. I find that the assessee has deposited the amount of Rs.10 lakhs in her Indian Overseas Bank on 30.03.2010. When the explanation called for by the Assessing Officer u/sec.147 of the Act and in response to the notice u/sec.148, the assessee has furnished her cash flow statement, confirmation letter from parties wherefrom she had received the sums and therefore, I find that she discharged her initial onus of proving cash deposit of Rs.10 lakhs in her bank account. The lower authorities did not appreciate the explanation offered by the assessee and not brought