SIKHA AGRAWAL, RAIGARH,RAIGARH vs. INCOME TAX OFFICER, WARD-1, RAIGARH, RAIGARH

Ground of appeal No.4 is consequential and Ground of appeal 3. No.5 is general.

5. That it is also on record as placed in the paper book wherein it has been explained before the A.O regarding source of fund including cash payment of Rs.1,98,000/- and the same has been received by the assessee from her husband through RTGS totaling to Rs.12,78,000/-. It is the same amount that has been paid by the assessee. It is not the case of the department that apart from total sale consideration paid, there is also some on money which was paid and not disclosed by the assessee. It is also not the case of the department that the credibility of husband of the assessee is in doubt. Everything is on record and explained by the assesse before the A.O. However, before making the said addition the A.O has not applied his mind and has summarily made the addition without making any enquiry as regards RTGS entry from husband to the assessee. This action of the A.O is perverse, arbitrary and sans independent application of mind. The Co-ordinate Bench of Delhi in the case of Sanjeev Kumar, C/o M/s. Raj Kumar & Associates vs. ITO Ward 2(3)(2), Bulandshahr, reported in 2023(10) TMI 1027-ITAT Delhi on the same issue of “non- application of mind” had observed and held as follows: “14. In view of foregoing discussion, I reach to a logical conclusion that the complete cash book statement clearly explains the source of cash deposit to the bank account of assessee, wherein the assessee has not only included cash receipts as salary and capital withdrawal from two partnership firms M/s Umang Beverages and M/s Mohan Oil & Cattle Feed and a cash salary from Bihar Milk Foods Pvt. Ltd. and has also reduced the amount of drawings for household expenses. The copy of return of income of wife of assessee Smt. Shalini and father of assessee Shri Kalu Mal co-jointly established that the other family members of assessee are also earning and contributing towards household expenses. Therefore, in my humble understanding the source of cash deposit during demonetization to the bank account of assesses is properly explained by the assessee by way of self speaking documentary evidence and explanation. Secondly, the AO has made addition u/s 69 of the Act which pertains to unexplained investments, whereas the assessee has not made any investment either in movable or any immovable property during the relevant period by way of using cash amount. The Ld.CIT(A) though has given credit of 25% of Impugned cash deposit confirming the remaining part of addition but there is no logic of this segregation. From the relevant operative part of first appellate order, I also note that the Ld.CIT(A) has upheld the part addition without mentioning any charging section and impliedly adopting section 69 of the Act in the line of assessment order. Therefore, respectfully following the proposition rendered by the Hon'ble Jurisdictional High Court of Allahabad in the case of Sarika Jain (supra). I have no hesitation to hold that the addition made by the AO by mentioning incorrect and irrelevant charging section is not sustainable and valid being bad in law. Accordingly, grounds of assessee are allowed and AO is directed to delete the entire addition.

In view of the above, it can safely be said that the Tribunal travelled beyond the scope of the appeal in making the addition of the said income under Section 69-A of the Act. It may be worth noting that the Tribunal has recorded a categorical finding that "it is clear that under the provisions of Section 68, the addition made by the Assessing Officer and sustained by the CIT (Appeals) cannot be sustained, meaning thereby that the Tribunal was of the opinion that the Assessing Officer and the CIT (Appeals) committed an error in adding the aforesaid amount in the income of the appellant-assessee under Section 68 of the Act. In view of the above, when the said income cannot be added under Section 68 of the Act and the Tribunal was not competent to make the said addition under Section 69-A of the Act, the entire order of the Tribunal stand vitiated in law Accordingly, we answer the question of law, as framed above, in favour of the appellant-assessee and against the Revenue and hold that the Tribunal was not competent to make any addition under Section 69-A of the Act and as the same was subject matter of the appeal before it.”

Ground of appeal

No.3 pertains to the addition of Rs.13,15,000/- 9. as unexplained money u/s. 69A of the Act. In this regard, the assessee has submitted that an amount of Rs.10,75,000/- has been received from her husband i.e. Shri Suman Agrawal as reflected in the bank account of Shri Suman Agrawal and bank account of the assessee. Confirmation of account of Shri Suman Agrawal as on 31.03.2019 reflecting the loan transaction has been submitted to the department. That further, the bank statement of Shri Suman Agrawal, SBI A/c. No.201199178583 and PNB A/c. No.41200010023505, ITR and computation of Shri Suman Agrawal for A.Y.2019-20 has already been submitted before the department. The assessee further submits that all these documents/evidences have been provided to the department which has not been disproved as false or fabricated. At the same time, an amount Rs.2,40,000/- has been deposited in the bank account No.20270078740 out of the past savings of the assessee. Since the assessee was having sufficient cash balance of Rs.2,40,000/- as on 16.02.2019 for depositing such cash in the bank account. That since nothing has been brought out by the department as false or fabricated against the assessee, in such scenario, additions in the hands of the assessee cannot sustain. The revenue has based its finding on suspicion and conjecture and on improper rejection of tenable material. The assessee on the other hand has successfully demonstrated the nature and source of the cash deposits complying the provisions of Section 69A of the Act. No defect has been pointed out regarding the documents placed on record by the revenue. It is trite that suspicion how so ever strong cannot take place of proof as held in the case of Umacharan Shaw & Bros. Vs Commissioner Of Income-Tax [1959]

37. ITR 271 (SC). The Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. Vs. CIT [1954]

26. ITR 775 (SC) has held that the powers given to the revenue authorities, however wide, do not entitle them to make assessment on pure guess work without reference to any evidence or material. An assessment cannot be made only on bare suspicion.