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Income Tax Appellate Tribunal, [ DELHI BENCHES: “ A ” NEW DELHI ]
Before: SHRI BHAVNESH SAINI & SHRI L. P. SAHU
O R D E R PER L. P. SAHU, A. M. :
This is an appeal filed by the assessee against the order passed by the learned Commissioner of Income Tax (Appeals) Faridabad,
2 ITA. 1563 (Del)/2015. Shri Bhagwan Dass Arora. dated 30-01-2015, for the assessment year 2011-12, on the following grounds of appeal :-
“ 1. That having regard to the facts and circumstances of the case, Ld. CIT (Appeals) has erred in law and on facts in sustaining the addition of Rs.3,35,300/- made by Ld. Assessing Officer on account of alleged unexplained cash deposits in bank and more so when the addition could not have been made under provisions of section 68 of the Act applied by Ld. Assessing officer.
2. That having regard to the facts and circumstances of the case, learned CIT (Appeals) has erred in law and on facts in sustaining the addition of Rs.44,000/- made by Ld. Assessing Officer on account of alleged difference in Form 26AS.
3. That having regard to the facts and circumstances of the case, learned CIT (Appeals) has erred in law and on facts in enhancing the assessed income by making addition of Rs.3,50,000/- on account of alleged house hold expenses and that too on ad-hoc basis.
That having regard to the facts and circumstances of the case, learned CIT (Appeals) has erred in law and on facts in enhancing the assessed income by making addition of Rs.2,50,000/- on account of alleged expenses incurred on treatment of brother and that too on ad-hoc basis.
5. That in any view of the matter and in any case, the enhancement made by learned CIT (Appeals) is beyond jurisdiction and against the principles of natural justice.
6. That the assessee craves the leave to add, alter or amend the 3 ITA. 1563 (Del)/2015. Shri Bhagwan Dass Arora.
grounds of appeal at any stage and all the grounds are without prejudice to each other.
The learned authorized representative for the assessee did not press ground No. 2. Therefore, the same is dismissed, as not pressed. The rest of the grounds of appeal are adjudicated upon as under.
2.1 The brief facts of the case are that the assessee filed return on 30.07.2011 declaring income at Rs.22,60,980/-. The case was selected for scrutiny and statutory notices were issued to the assessee. The assessee filed details of bank accounts, confirmation of accounts and balance sheet. On perusal of the bank account, the learned Assessing Officer noticed that the assessee has deposited and withdrawals of cash from the banks at various occasions. In this regard the assessee submitted detailed written submissions. He submitted that the cash was withdrawn from the bank for the renovation of the house and to purchase the agricultural land etc. Because of the above-mentioned reasons, the renovation of the house and purchase of agricultural land was not materialized. The ultimate purpose for which the cash was deposited and withdrawn from the bank could not be fulfilled. From the above the learned Assessing Officer was not satisfied and he drew inference that the explanation of the assessee is not proper and no cogent / satisfactory reason was shown and no proper explanation was given and the learned Assessing Officer was not satisfied. For want of cogent evidence / explanation furnished by the assessee the total cash deposit of Rs.33,14,000/- was 4 ITA. 1563 (Del)/2015. Shri Bhagwan Dass Arora. treated as income of the assessee from undisclosed sources and added into the income of the assessee. In addition to this, the learned Assessing Officer made an addition on account of difference in rental income of Rs.1,01,800/- and an addition of Rs.44,000/- under section 194C of the Income Tax Act respectively.
2.2 Feeling aggrieved from the order of the learned Assessing Officer the assessee appealed before the learned CIT (Appeals). The assessee also made detailed written submissions before the learned CIT (Appeals) and he after considering the submissions of the assessee, sustained an addition of Rs.3,35,300/- on account of unexplained cash deposited into the bank and Rs.3,50,000/- on account of alleged house-hold expenses and Rs.2,50,000/- on account of alleged expenses incurred on treatment of brother, who was suffering from cancer disease and Rs.44,000/- on account of alleged difference in form No. 26AS thereby he allowed partial relief to the assessee and made some enhancement also.
2.3 Aggrieved from the order of the learned CIT (Appeals) the assessee is in appeal before the Income Tax Appellate Tribunal.
2.4 The learned authorized representative for the assessee reiterated the submissions made before the learned CIT (Appeals) and he further submitted that the learned CIT (Appeals) has wrongly taken the opening cash balance as ‘NIL’ whereas the learned Assessing
5 ITA. 1563 (Del)/2015. Shri Bhagwan Dass Arora. Officer has made opening balance sheet which was drawn in the last financial year. Each and every item was duly explained. The complete cash book was filed before the learned CIT (Appeals) and the learned CIT (Appeals) has chosen the negative figure after excluding the opening balance which is not correct. He further submitted that the brother, who was suffering from cancer disease, was getting treatment from All India Institute of Medical Sciences, New Delhi. The learned CIT (Appeals) has presumed expenses of Rs.2,50,000/- on the treatment of his brother only on ad-hoc basis. The assessee further submitted that he was only taking care of him and during the years some part of the expenditure relating to the treatment was borne by the relatives and past savings of the brother, which was not appearing on the cash flow statement submitted by him. He further enhanced the amount of Rs.3,50,000/- on the house-hold expenditure which was also not based on any creditable evidence.
2.5 The learned Senior Departmental Representative, on the other hand, relied upon the orders of the lower authorities and further submitted that the assessee was unable to explain the opening balance shown in the cash flow statement of Rs.2,80,554/-. Therefore the learned CIT (Appeals) was justified to make addition of peak negative balance of Rs.3,35,300/- and further submitted that the house-hold expenditure noted by the learned CIT (Appeals) cannot be denied. He further submitted that in the cash flow statement not a single entry is appearing to justify this claim in respect of house-hold expenditure,
6 ITA. 1563 (Del)/2015. Shri Bhagwan Dass Arora. which is mandatory looking to the life style, size and status of the family. Therefore, the estimation made by the learned CIT (Appeals) relating to the house-hold expenses is correct.
After hearing both the sides and perusing the entire material available on record and the paper book filed by the assessee at the time of hearing of the appeal containing page Nos. 1 to 18, we observe from the submissions of the assessee that there was opening balance of Rs.2,80,554/-. The assessee has submitted for the financial year 31.03.2010, which was accepted by the Assessing Officer, from the perusal of the balance sheet it was noticed that the assessee has shown cash in hand of Rs.2,80,554/- which has not been disputed by the Assessing Officer. Therefore, the observation made by the learned CIT (Appeals) that there was no any documentary evidence to substantiate the opening cash availability is not correct. The opening cash balance is the one and it also covers the next closing balance of financial year, which has also not been denied. Therefore, the assessee gets relief to the extent of opening cash balance, appearing as on first day of the impugned financial year, of Rs.2,80,554/- on the first ground of appeal.
4. In respect of ground No. 3 the addition made by the learned CIT (Appeals) relating to the alleged house-hold expenses seems to be correct. The learned CIT (Appeals) has observed that the assessee has not shown in the cash flow statement any house-hold expenses, which is mandatory for each and every person. To keep himself alive
7 ITA. 1563 (Del)/2015. Shri Bhagwan Dass Arora. in the society with his family size and social status, these are necessary and which fact cannot be denied. Keeping in view the above, we uphold the same.
In respect of ground No. 4 relating to treatment of his brother on ad-hoc basis of Rs.2,50,000/-, the submissions of the assessee are accepted. The learned CIT (Appeals) has estimated the above without any cogent material regarding the medical expenses. The assessee has submitted that these expenses were incurred from the past savings of the brother and the treatment for cancer disease was going on from AIIMS, which is the premier Government hospital. Therefore, the explanation of the assessee is accepted.
In view of the above, ground No. 4 of the appeal is allowed.
Ground No. 5 raised by the assessee is not sustainable because before enhancing the income of the assessee a show cause notice was issued to the assessee on 22.01.2015. Therefore, this ground has no force.
In the result, the appeal of the assessee is partly allowed.