SHANKAR ANANDA PADALKAR,SOLAPUR vs. ITO WARD 1(2), SOLAPUR

Facts of the case, in brief, are that the assessee is an individual and furnished his return of income on 02.11.2017 declaring an income of Rs.1,42,090/-. The case was selected for scrutiny under CASS with the reason of large cash deposited compared to returned income. Notices u/s 143(2) and 142(1) along with questionnaire respectively were issued to the assessee. In response to above notice and questionnaire, the assessee submitted that he maintains savings bank account with Bank of India which is jointly held by him and his spouse i.e. Smt. Malabai Shankar Padalkar. In this bank account, an amount of Rs.50,20,000/- was deposited in cash on 13.11.2016. Out of this amount, an amount of Rs.23,50,000/- was claimed to be deposited by the assessee himself from past savings and an amount of Rs.26,70,000/- was claimed to be deposited by his wife, Smt. Malabai Shankar Padalkar from her past savings. The assessee also submitted copy of income tax returns furnished by him and by his wife for the past 12 years and also furnished an affidavit duly sworn in by his wife stating that the amount of Rs.26,70,000/- were deposited by her in the joint bank account. Not being satisfied with the reply of the assessee, vide order dated 12.12.2019, the Assessing Officer completed the assessment u/s 143(3) of the IT Act and determined total income at Rs.51,62,90/- as against the income returned by the assessee at Rs.1,42,090/-. The above assessed income includes addition u/s 69A r.w.s. 115BBE of the IT Act of Rs.50,20,000/- cash deposited in joint bank account on 13.11.2016.

Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply of the assessee, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee.

It is the above order against which the assessee is in appeal before this Tribunal.

We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the addition of Rs.50,20,000/- was made to the returned income of the assessee on the ground of cash deposit on 13.11.2016 i.e. during demonetization period in the Bank of India, Savings Bank Account jointly held by the assessee with his wife. In this regard, we find that the assessee tried to explain before the Assessing Officer that out of Rs.50,20,000/- an amount of Rs.23,50,000/- and an amount of Rs.26,70,000/- was deposited by him and his wife respectively from past savings. In support of this contention, an affidavit duly sworn in by his wife, Smt. Malabai Shankar Padalkar was also furnished wherein she accepted to have deposited above amount of Rs.26,70,000/- in the joint bank account. The assessee also furnished copy of income tax returns for the past 12 years pertaining to himself and his wife, however the Assessing Officer rejected the claim which was subsequently confirmed by Ld. CIT(A)/NFAC.

It was the contention of Ld. Counsel of the assessee that the return of daughter in law of the assessee i.e. Smt. Sunita Ramchandra Padalkar for the assessment year 2017-18 was also selected for scrutiny under CASS on the ground of large cash deposited compared to returned income i.e. Rs.16,00,000/- deposited in her bank account in one go. And on the basis of copy of earlier year’s return of income, the Assessing Officer accepted the contention of Smt. Sunita Ramchandra Padalkar that the amount was deposited out of savings of past years. Accordingly, Ld. AR contended that under identical facts the Assessing Officer is accepting the contention of one of the family member regarding deposit of cash of Rs.16,00,000/- from past savings but another officer is rejecting the same claim made by the other family member.

Apart from above, it was also the contention of Ld. Counsel of the assessee that when an affidavit was furnished by the wife of the assessee and the bank account was also found to be a joint bank account held by the assessee and his wife, the Assessing Officer ought to have accepted the contention of the assessee that an amount of Rs.26,70,000/- was deposited by wife of the assessee or have initiated the proceedings in the case of the assessee’s wife and if not satisfied with the contention of the assessee’s wife, the additions could have been made in the hands of the assessee’s wife.

Apart from above, it was also the contention of Ld. Counsel of the assessee that the son of the assessee was also a regular income tax payer and has disclosed an income of Rs.15,85,761/- for the period under consideration and was looking after his parents since last many years. Accordingly, it was the contention of the assessee that the doubt of Assessing Officer that the amount disclosed as income in the earlier year’s returns must have been spent by the assessee and his wife for household expenditure is not correct.

Considering the totality of the facts of the case and in the interest of justice and in view of our above discussions in preceding paragraphs of this order, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and remand the matter back to the file of Ld. CIT(A)/NFAC with a direction to decide the appeal afresh and as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby