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Facts
The assessee filed a return for AY 2010-11. During FY 2009-10, she purchased a residential property. The AO reopened the assessment under section 147 as the source of investment of Rs. 11,37,170/- was not satisfactorily explained. The AO added Rs. 10,86,170/- as unexplained cash deposit.
Held
The CIT(A) confirmed the addition of Rs. 1,00,000/- after allowing Rs. 6,60,000/- towards accumulated savings and Rs. 2,00,000/- from GPF. The Tribunal found that the assessee was a salaried employee for 35 years and the accumulated savings, along with her son's, should be sufficient to explain the addition sustained by the CIT(A).
Key Issues
Whether the addition sustained by the CIT(A) of Rs. 1,00,000/- on account of alleged unexplained cash deposit is justified given the assessee's long-term employment and accumulated savings.
Sections Cited
250 of the Income-tax Act, 1961, 143(3) r.w.s. 147 of the Act, 148, 143(1) of the Act
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Before: SHRI SANJAY GARG & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 11.01.2024 by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘CIT(A)’] for the Assessment Year (AY) 2010-11, which in turn arises out of assessment order passed by Assessing Officer (in short, ‘AO’) u/s 143(3) r.w.s. 147 of the Act, dated 31.08.2017.
Grounds of appeal raised by the assessee are as under: “(1) That the appeal order by Ld. CIT(A) is bad in law/facts, illegal, without jurisdiction and needs to be quashed. (2) That Ld. CIT(A) made addition of Rs.,1,00,000/- without providing any cogent and valid reason. Withdrawal from GPF/CPF is self-ex0planatory and corroborative evidence and does not need any justification or supporting /AY.2010-11 Jayshree R Rathod proof. Consequently, the impugned appeal order as passed u/s 250/143(3)/147 is unlawful and unjust and therefore the same deserved to be annulled/cancelled. (3) That without prejudice to ground No.2 above, no justification subsisted on the part of the Ldd.AO in making an addition aggregating at Rs.1,00,000/- on account of alleged unexplained cash deposits. (4) That without prejudice to Ground No.3 above, the addition was made without considering reply of the appellant. Ld.CIT(A) also failed to distinguish addition made under unexplained investments vs. unexplained cash deposit. Thus, the entire addition was made against the natural justice and need to be deleted. (5) That the appellant reserves its right to add, alter, modify or delete any of the grounds of appeal
hereunto taken before.”
3. Facts of the case in brief are that assessee filed her return of income declaring total income of Rs.2,89,300/- for the year under consideration on 11.06.2010. On perusal of AIR/CIB information, it was found that assessee had purchased immovable property of Rs.30,00,000/- during the financial year (FY) 2009-10. She purchased a residential house along with her son Shri Digvijay Rathod. Payment of Rs.20,00,000/- was from housing bank loan. However, assessee had not submitted the source of balance investment of Rs.9,60,000/- and registration expenditure of Rs.1,77,170/-, totalling to Rs.11,37,170/-. The AO, therefore, issued notice u/s 148 on 31.03.2017 after getting approval from Competent Authority. In response, assessee filed return of income on 29.04.2017, declaring total income of Rs.2,83,286/-. The reason for reopening was provided to the assessee. Objection of the assessee to the reopening was disposed of vide order dated 06.07.2017. Thereafter, various notices were issued to explain source of the investment. In reply, the assessee submitted /AY.2010-11 Jayshree R Rathod that Rs.51,000/-, Rs.9,09,000/-, Rs.20,40,000/-, Rs.1,47,000/- and Rs.30,170/- were out of accumulated savings, withdrawal from GPF/CPF account, housing loan from State Bank of India (SBI), withdrawal from CPF/GPF account and accumulated savings of self and her son respectively. The AO did not accept source of investment of Rs.10,86,170/- because no supporting evidence in support of cash payment was filed except withdrawal of Rs.2,00,000/- and Rs.1,25,000/- from GPF account. Even these withdrawals were credited to the regular savings account and, therefore, cash withdrawal from CPF/GPF was not found acceptable. Accordingly, Rs.10,86,170/- was added as unexplained cash deposit to the total income. The total income was assessed as Rs.13,69,460/- as against returned income of Rs.2,83,286/-.
4. Aggrieved by the order of AO, assessee preferred appeal before CIT(A). The CIT(A) has reproduced the written submission of the assessee at pages 3 to 18 of the appellate order. He dismissed the ground on validity of reopening by stating that in this case, no regular assessment order u/s 143(3) was passed and the return was only processed u/s 143(1) of the Act. There was, thus, no occasion for AO examined the source of investment. The CIT(A) relied on the decisions of Hon’ble Supreme Court in case of ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd., 291 ITR 500 (SC) and Raymond Woolen Wills Ltd. vs. ITO, 236 ITR 34 (SC) and held that the reopening by the AO was in accordance with law. Regarding the merits of the addition, the CIT(A) noted that assessee has withdrawn Rs.2,00,000/- from her GPF account on 23.06.2009. Hence, /AY.2010-11 Jayshree R Rathod Rs.22,40,000/- are clearly explained by the assessee. Regarding balance amount of Rs.7,60,000/-, the CIT(A) noted that the assessee was working in the Fisheries Department for last 35 years and therefore he allowed Rs.6,60,000/- and confirmed the addition of Rs.1,00,000/- to safeguard the interest of revenue.
Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee relied on the grounds of appeal
and Statement of Facts. He submitted that assessee is working in the Fisheries Department of the State Government for the last 35 years and the accumulation of cash to the extent of Rs.7,60,000/- is quite reasonable. No other investment was made by the assessee. Therefore, the CIT(A) was not justified in sustaining addition of Rs.1,00,000/- only while deleting addition of Rs.6,60,000/-.
6. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of lower authorities.
7. We have heard both the parties and perused the material available on record. Though the appellant has taken up five grounds of appeal, the only issue pertains to addition of Rs.1,00,000/-, sustained by the CIT(A), out of total addition of Rs.10,86,170/- made by AO. The CIT(A) has allowed cash balance of Rs.2,00,000/- and Rs.6,60,000/- on account of cash withdrawal from the GPF account and accumulated savings respectively. In the appellate order, the CIT(A) has tried to safeguard the interest of revenue as well as meet the ends