NATHABHAI PARSANA (LR. GANESHBHAI PARSANA),RAJKOT vs. ACIT CIR -2(1), RAJKOT

Ld. CIT(A) erred in law as well as on facts in confirming addition on the basis of the doubts, suspicions, surmises, conjecture and human probabilities, without bringing any evidence on record.”

Succinctly, the factual panorama of the case is that assessee before us is an Individual. The assessee had filed its return of income, on 04.08.2017, declaring therein total income at Rs.40,390/-. The return of income has been processed u/s 143(1) of the Act. The assessee`s case was selected for limited scrutiny under CASS for verification, viz: Large value cash deposits during demonetization period as compared to returned income. Therefore, the notice u/s 143(2) of the Act was issued on 21.09.2018 and duly served upon the assessee through ITBA portal on his e-mail ID. Further, various notice u/s 142(1) of the Act was issued to the assessee through ITBA System, calling for various details relevant to the e-assessment proceedings in his case. In response to the above notice, the assessee through e-filling portal uploaded necessary details online as called for.It was noticed, by the assessing officer, from the statement of bank account maintained by the assessee, that the assessee has deposited Rs.37,65,000/- cash during the period of demonetization. Accordingly, notice u/s 142(1) of the Act was issued to the assessee calling for details in respect of source of such cash deposited. In response to the notice, the assessee stated that he had sold immovable properties worth Rs.2,79,36,000/- in financial year (F.Y.) 2014-15 and out of the sale proceeds of the said amount, sum of Rs.2,70,86,000/- was received in cash. The assessee further stated that these cash receipts were not deposited in the bank 2 (AY-17-18) Nathabhai Parsana account in F.Y. 2014-15 and 2015-16 and he was having said cash on hand as of 08/11/2016, out of which the sum of Rs.37,65,000/- have been deposited. The assessee is subjected to tax audit, and as per Tax audit and books of accounts, the assessee had opening cash balance, out of that assessee deposited the cash in the bank account.

However, the assessing officer rejected the above contention of the assessee and observed that assessee had failed to submit the reliable evidence, therefore, the assessing officer made the addition to the tune of Rs.37,65,000/- in the hands of the assessee, under section 69A read with section 115 BBE of the Act.

Aggrieved by the order of Ld.CIT(A), assessee is in further appeal before us.

On the other hand, Ld. Senior DR for the Revenue submitted that whatever documents submitted by assessee before lower authorities were self-serving documents, therefore, these documents should not be relied on. Apart from this, 4 (AY-17-18) Nathabhai Parsana assessee has submitted documents of Wealth Tax, which is computer generated receipts and hence, should not be relied and therefore cash-in-hand shown by assessee, in the wealth tax return on 31.03.2015, to the tune of Rs.2,71,06,379/- should not be considered, as source of cash deposit, as the assessee has only submitted the computation of wealth tax return before the Bench. Hence assessee’s appeal should be dismissed.

We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that assessee is 85 years old individual. The assessee has income from sale of the immovable property, opening cash balance, and the cash balance shown by the assessee in the wealth tax return, which were the source to deposit the amount during the demonetisation period. During the assessment proceedings assessing officer asked for the source of the cash deposited during demonetisation period. The assessee submitted that during the assessment year (A.Y.) 2015-16, he had sold immovable properties for Rs. 2,79,36,000/-out of which sum of Rs. 2,70,86,000/- was received through cash, which was not deposited in the bank account/ spent anywhere and hence the said cash balance was available with the assessee to deposit in the bank account. To substantiate his claim, the assessee has also submitted following documents, before the Bench, which were already submitted by the assessee before the lower authorities, Viz: (a)Return of income and computation of total income for the A.Y. 2015- 16 (paper book Page No.: 29 to 31). (b). Bank statement for the period from 01.04.2014 to 31.03.2017 ( paper book Page No.: 32 to 35).

We note that assessing officer has not discussed any of these (above listed details) in the assessment order. The assessing officer has not made any adverse finding in any of these documents even, though all the details were furnished by the assessee, before him. The assessing officer ought to have examined all these details and refuted / rejected them, with a cogent adverse findings and discernable line of reasoning, in order to arrive at a conclusion and to make the addition u/s 69A of the Income Tax Act. Therefore, we note that assessing officer has not refuted or discredited these evidences and documents. The assessing officer does not mention why he is not accepting these evidences. On the contrary, the assessing officer has just brushed aside these evidences of assessee without even a word on why they are not acceptable. It is a well settled Law that when an assessee has all the possible evidence in support of its claim, they cannot be brushed aside based on surmises.

Before parting, we would like to state that assessee has deposited the cash in Bank account out of defined sources, therefore, it should not be taxable u/s. 115BBE of the Act. Hence, we direct the AO to tax the amount of Rs.3,76,500/- by applying normal rate of income tax.

This assessee’s appeal is partly allowed in above terms.