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Facts
The assessee appealed against additions made by the AO for unexplained cash deposits of Rs. 1,98,000 in her Post Office account and Rs. 8,91,500 in a Syndicate Bank account for AY 2017-18. The assessee contended that the Syndicate Bank account was a business account transferred to her son before demonetization and not operated by her, and that she was not given an opportunity to present her case before the CIT(A). The DR argued that these contentions were not made before the AO, and there was no compliance by the assessee.
Held
The Tribunal observed that the assessee's claims regarding the Syndicate Bank account being her son's business account and not operated by her during the relevant period required verification. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the Assessing Officer for a fresh assessment after proper verification of the assessee's claims. The appeal was allowed for statistical purposes.
Key Issues
Whether additions for cash deposits in the assessee's Post Office and Syndicate Bank accounts were justified, and whether the Syndicate Bank account was a business account operated by her son, requiring fresh verification by the AO.
Sections Cited
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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI KUL BHARAT
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned CIT (Appeals), National Faceless Appeal Centre (NFAC), dated 21.12.2023, pertaining to the assessment year 2017-18. The assessee has raised following grounds of appeal:
“1. The appellant did not get an opportunity to present her case before the Id CIT(A). 2. On the facts, circumstances and the applicable law the Id CIT(A) should have held the addition of Rs 198000 for cash deposited by her in her Post Office Account unnecessary and unwarranted.
3. On the facts, circumstances and the applicable law the Id CIT(A) should have held the addition of Rs 891500 for cash deposited by her in her Syndicate Bank Account unnecessary and unwarranted.
4. The appellant craves leave to add, amend, delete and modify any grounds of appeal before/during the hearing of the appeal and all the above grounds are without prejudice to each other.”
Apropos to the grounds of appeal, learned counsel for the assessee vehemently argued that the authorities below were not justified in making the impugned additions. He submitted that the AO has made addition in respect of cash deposit in two different accounts, amounting to Rs. 1,98,000/- and Rs. 8,91,500/-. He contended that the sum of Rs. 1,98,000/- was deposited in post office saving account of the assessee. However, the sum of Rs. 8,91,500/- was deposited in current account no. 829910100003823 with Syndicate Bank. He contended that this account was not savings bank account but maintained for business. He further submitted that the business in the name of M/s Kapoor Paints And Hardware Store was transferred to her son Shri Sachin Kapoor, way back in the year 2014 i.e. prior to demonetization period. Learned counsel took me through various pages of paper book containing bank statement of M/s Kapoor Paints And Hardware Store.
On the other hand learned DR submitted that such contention was not made before the AO and there was no compliance by the assessee before the AO. Therefore, the AO was justified in treating the amount as unexplained.
I have heard rival submissions and perused the material available on record. The contention of the assessee that the account held with Syndicate Bank was not maintained and operated by the assessee during the relevant period, account being business account and duly accounted for in the books of account of the son of the assessee in the relevant period. Looking to the totality of the facts and material placed before me, I am of the considered view that the facts stated by the assessee in written submissions about the bank account wherein the impugned cash deposit was made requires verification at the end of the AO. I, therefore, set aside the impugned order and restore the matter to the file of AO for making assessment afresh after verifying the correctness of the claim of the assessee that the impugned cash deposits were made in the bank account M/s Kapoor Paints And Hardware Store, which is a proprietary concern and is now owned by son of the assessee. Grounds are allowed for statistical purposes.
Appeal of the assessee is allowed for statistical purposes.
Order pronounced in open court on 28.05.2024.