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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Shri Rajpal Yadav & Mrs. Annapurna Gupta
Revenue by: Shri S.S. Shukla, Sr. D.R. Assessee by: Shri Sagar Shah, A.R. Date of hearing : 22-12-2021 Date of pronouncement : 10-01-2022 आदेश/ORDER PER : ANNAPURNA GUPTA, ACCOUNTANT MEMBER:-
The present appeal has been filed by the assessee against the order passed by the Commissioner of Income Tax (Appeals)-5, Ahmedabad, (in short referred to as CIT(A)), dated 21-05-2019, u/s. 250(6) of the Income Tax Act, 1961(hereinafter referred to as the “Act”) pertaining to Assessment Year (A.Y) 2011-12.
Page No 2 Shri Nirav Rameshchandra Shah vs. ITO
The grounds raised
by the assessee read as under:- “Ground of Appeal 1: Ground of Appeal 1.1 : The sale deed of Rs. 343000.00 dtd. 21/10/10 in respect of cash source of the said addition amount produced and the learn CIT(A) failed to appreciate that the necessary evidence were filed by the appellant before the A.O thereby discharging their onus to prove the source of the said cash deposits in their bank account. Ground of Appeall.2 : Mrs.Truptiben N Shah (wife of assessee) was earned Cash Income of Rs. 143500.00 from Tuition Income during the relevant assessment year and the same was deposited in bank account (jointly held with Mr. Nirav R Shah) . On the facts and under the circumstances of case, CIT(Appeals) was not justified in refusing the explanation. Ground of Appeal 1.3 : During the year under consideration assessee and her wife deposited cash of Rs. 386000.00 on different dates in the saving bank account and the said deposit were made out of withdrawal from same Bank Account. Amount deposited was withdrawn from assessee's disclosed bank accounts. On the facts and under the circumstances of case, CIT(Appeals) was not justified for addition. Ground of Appeal 2 : Assessee and wife had accumulated savings of Rs. 2.50 lacs each at the opening at the year. On the facts and under the circumstances of case, CIT(Appeals) was not justified in refusing cash on hand of Rs. 5.00 lacs at the year begain. Ground of Appeal 3 :_The addition made by the Assessing Officer in respect of the cash deposit in the bank account of the assessee by invoking section 68 has to fail for the very reason that a1 per the judgment of the Bombay High Court in the case of C/Tv. Bhaichand N. Gandhi [19831 141ITR 67/[1982T 11 Taxman 59, a bank pass book or bank statement cannot be considered to be a 'book' maintained by the assessee for any previous year, as understood for the purpose of section 68. Even while computing the assessment to the best of his judgment, under section 144, it is the duty of the Assessing Officer to make an addition on the basis of the available material and circumstances of each case. Judgment is a faculty to decide the matters with wisdom, truly and legally and it should not depend on the arbitrary caprice of an officer. In other words, though an element of guess work is involved in best judgment it should not be a wild one, as held by the Supreme Court in the case of State of Keralct v. Velukutti [1966] 60 ITR 239.”
3. The solitary issue in the present appeal relates to addition made to the income of the assessee on account of alleged unexplained cash deposited in the bank account of the assessee amounting to Rs. 10,15,000/-.
The facts of the case are that in re-assessment proceedings initiated on the assessee u/s 147 of the Act, notices issued to the assessee remained un- responded and, the Assessing Officer therefore passed an ex-parte order u/s. 144 of the Act r.w.s. 147 of the Act, treating the cash deposited in the bank account of the assessee, amounting to Rs. 10,15,000/-, as unexplained and adding the same to the total income of the assessee.
Page No 3 Shri Nirav Rameshchandra Shah vs. ITO
The assessee carried the matter in appeal before the ld. CIT(A) where he submitted in writing that reply had been filed to the Assessing Officer but had not been considered by him. The ld. CIT(A) however dismissed the appeal of the assessee stating that his explanation of the source of cash deposit was not substantiated. The relevant finding of the ld. CIT(A) at para 3.2 to 3.3 is as under:- “Decision: 3.2. I have carefully considered the assessment order, facts of the case and submission of the appellant. The AO in the assessment order has noted that ss per ITD data more than Rs.10 lakhs cash was deposited in the assesses bank account, therefore, the case of the assesseee was reopened. However in spite of various show cause notice issued no details were filed, therefore, the AO treated the same as unexplained cash deposit and income of the assessee. 3.3. The appellant submitted that the reply was filed before the AO vide letter dtd. 18.12.2018 but the same was not considered by the AO and the appeal may be decided on the basis of the above submission also. It is noted from the above letter that assessee could not file any evidence in support of the addition made. The appellant merely contended that there was opening cash balance in the hand of assessee and his wife of Rs.5 lakhs and cash received during the year of Rs. 4,86,000/-. The contention of the appellant is carefully considered out not found tenable as there is no supporting evidence and justification of opening balance and sources of cash deposit during the year was filed before the A.O. It is also noted that during appellate proceeding also no explanation and sources of details were filed. Since the sources of cash deposit and genuineness of opening balance of cash in hand of the appellant is not established in view of the detailed discussion by the A.O. in the assessment order therefore, the addition made by the A.O. is confirmed.” 5.1 Before us, the ld. counsel for the assessee contended that on the date the assessment order was passed i.e. on 18-12-2018, he had filed a reply on the web portal of the Income Tax Department justifying the source of the cash deposited in his bank account and had submitted a copy of the said letter to the ld. CIT(A) also, but none of the departmental officers had considered the same while dealing/adjudicating the issue. He drew our attention to the paper book filed before us pointing therefrom the explanation of the source of cash deposited and the evidences supporting the same placed therein. He referred to a copy of the sale deed evidencing sale of land by the assessee for Rs. 3,43,000/-during the year, which he stated Page No 4 Shri Nirav Rameshchandra Shah vs. ITO was deposited in his bank account. He further filed a copy of the bank statement ,where the impugned amount was found deposited, and contended before us that it was a joint account of the assessee and his wife who earned tuition income in cash which was also deposited therein and certain deposits were out of withdrawal from the account .He contended that his submissions were not considered at all while dealing/adjudicating the issue.
5.2 The Ld. DR relied on the order of the Ld. CIT(A).
We have heard both sides and also gone through the orders of the authorities below . We find merit in the contention of the Ld. Counsel for the assessee that his submissions were not considered while adjudicating the issue. Despite the assessee submitting to him that a reply justifying the source of cash deposit alongwith evidence was filed to the AO ,and filing copy of the same to him also, the ld. CIT(A) has, we find, passed a cryptic order dismissing the contentions of the assessee without even dealing specifically with them. Ld. Counsel has pointed out that the source of cash deposited in bank had been explained as out of land sold, and withdrawals from the account itself as also tuition fees earned in cash by his wife who was joint holder of account. As evidence copy of sale deed of land and copy of bank account was filed. But we find and agree with the Ld. Counsel that these contentions were not dealt with by the Ld. CIT(A). The assessee has also contended filing the same to the AO on the web portal of the department. An affidavit to this effect, alongwith acknowledgement of filing reply on web portal was also filed to the CIT(A) .
Page No 5 Shri Nirav Rameshchandra Shah vs. ITO 6.1 Since the contentions of the assessee clearly have remained unaddressed, we are of the view that the issue of cash deposits in the bank account of the assessee needs to be reconsidered by the AO. In view of the same, we restore the issue back to the Assessing Officer with a direction to consider the contention of the assessee and after verifying the same decide the issue in accordance with law. Needless to add, the assessee be granted due opportunity of hearing.
In effect, the appeal of the assessee is allowed for statistical purposes.