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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘SMC’, LUCKNOW
Before: SHRI T. S. KAPOOR
This is an appeal filed by the assessee against the order of learned CIT(A) dated 18/03/2022. In this appeal the assessee has taken the following grounds:
“1. BECAUSE on the facts and in the circumstances of the case and in law, the ld. CIT(A) was not correct in confirming the addition of Rs.10,00,000/- u/s 69A of the Act, even though the appellant had furnished cogent evidences in support of availability of cash in hand for deposit in the bank account and source thereof to the authorities below.
BECAUSE as per material and information placed on record of the authorities below, the sum of Rs.10,00,000/- in the form of Specified Bank Notes (SBNs) was available with the appellant out of overall declaration of cash income amounting to Rs.4,95,00,000/- under the Income Declaration Scheme 2016 and consequently, the ld. CIT(A) ought to have deleted the un-lawful addition of Rs.10,00,000/- made by the Assessing Officer.
BECAUSE as per material and information placed on record of the authorities below, the source of Rs.10,00,000/- deposited in the bank account in the form of SBNs stood fully explained and the said amount did not bear the character of the income owing to the undisputed fact that it had been already subjected to taxation under the IDS- 2016 and therefore, the action of the authorities below has resulted in taxing the same income twice which is contrary to the scheme of taxation under the Act.
4. BECAUSE while passing the order, Ld. CIT(A) was failed to appreciate the peculiar facts and circumstances of the case as per submission made by the appellant and consequently the order passed by Ld. CIT(A) is deserve to be set-aside and the addition of Rs.10,00,000/- deserve to be deleted.
5. BECAUSE the CIT(A) is not correct in observing that during the relevant previous year the appellant had not made any withdrawal for house hold expenses whereas contrary to the said findings the appellant had made regular withdrawals from his proprietary concern to meet the house hold expenses and consequently the addition sustained by the ld. CIT(A) being wholly on a wrong premise deserves to be deleted.
6. BECAUSE the addition of Rs.10,00,000/- made by the Assessing Officer and sustained by Id. CIT(A) is based on presumption of bad faith, extraneous and irrelevant considerations and consequently the addition sustained by the Id. CIT(A) deserve to be deleted.
BECAUSE the order passed by the authorities below is based on presumption, surmises and conjectures.
BECAUSE the order appealed against is contrary to the facts, law and principles of natural justice.”
2. Learned counsel for the assessee, at the outset, submitted that assessee had declared an amount of Rs.5,10,63,640/- under IDS Scheme- 2016 and in this respect my attention was invited to pages 25 to 29 of the paper book where a copy of Form No. 1, declaring the total undisclosed income under IDS Scheme-2016, was placed. Inviting my attention to page no. 29 of the paper book, Learned counsel for the assessee submitted that out of total declaration, Rs.15,63,640/- related to other assets which means that the rest of the assets, amounting to Rs.4,95,00,000/- was in the form of cash. Learned counsel for the assessee submitted that out of Rs.4,95,00,000/-, cash declared under IDS Scheme-2016, the assessee deposited an amount of Rs.4,85,00,000/- in the bank account with Dena Bank on various dates starting from 29/09/2016 to 19/10/2016. It was submitted by Learned counsel for the assessee that the rest of Rs.10 lacs was kept by the assessee in safe place for spending gradually on family as per their desire. Learned counsel for the assessee submitted that when demonetization was declared on 08/11/2016, the assessee suddenly remembered about the cash of Rs.10 lacs and deposited the same on 15/12/2016 in the savings account. Learned counsel for the assessee submitted that the Assessing Officer has treated this amount of Rs.10 lacs as unexplained money u/s 69 of the Act which is not correct as the tax on the entire amount of cash amounting to Rs.4,95,00,000/- included in the income tax declaration scheme has already been deposited and therefore, the addition sustained by learned CIT(A) is not in accordance with facts and law and therefore, it was prayed that the addition sustained by learned CIT(A) be deleted.
3. Learned D. R., on the other hand, submitted that assessee had deposited Rs.4,85,00,000/- upto 19/10/2016 under the IDS Scheme-2016 and there is no reason for keeping and forgetting Rs.10 lacs separately which was deposited in the bank account after the demonetization was declared on 15/12/2016. Learned D. R. submitted that had it been a part of cash relating to IDS Scheme, the assessee would have deposited it along with other huge deposits and it is not a normal thing for a person to forget an amount of Rs.10 lacs. As regards the arguments of Learned counsel for the assessee that such cash was kept for expenses on the family, Learned D. R. submitted that in a period of two months, the assessee must have spent out of this cash as the learned CIT(A) has held that no cash withdrawals were made for house hold expenses.
Learned counsel for the assessee, in his rejoinder, submitted that it is wrong on the part of learned CIT(A) to hold that no cash was withdrawn whereas the fact is that the cash was withdrawn from the capital account of the assessee’s proprietary concern Kanhaiya Lal Ashok Kumar and my attention was invited to pages 46 to 62 of the paper book where a copy of cash book was placed which shows that every month the assessee had withdrawn Rs.25,000/- for house hold expenses. In view of the above, it was argued that the appeal of the assessee may be allowed.
I have heard the rival parties and have gone through the material placed on record. I find that it is undisputed fact that the assessee had declared an amount of Rs.5,10,63,640/- under IDS Scheme-2016, a copy of Form No. 1, declaring the amount, is placed at pages 25 to 29 of the paper book. It is also an undisputed fact that out of this amount of Rs.5,10,63,640/-, the cash declared in the IDS Scheme-2016 was Rs.4,95,00,000/-. It is also undisputed fact that the assessee had deposited, in his bank account with Dena Bank, an amount of Rs.4,85,00,000/- as being cash declared under the IDS Scheme-2016.
When the assessee deposited Rs.4,85,00,000/- out of total cash declared of Rs.4,95,00,000/-, it is natural that the assessee is left with an amount of Rs.10 lacs which he claims to have kept for expenses on his family and which he claims to have forgot. When the demonetization was announced, suddenly he realized that he had kept an amount of Rs.10 lacs separately and therefore, he deposited the same also in his bank account. The argument of Learned D. R. is that it is humanly impossible to forget Rs.10 lacs which is huge amount whereas in my opinion, it can happen specifically in the present case where the assessee had deposited huge amount of Rs.4,85,00,000/- and as compared to the huge amount of Rs.4,85,00,000/-, Rs.10 lacs is a very small amount.
5.1 Regarding the arguments of Learned D. R. that the assessee must have spent amount on family affairs during the two months period, I find that the assessee had withdrawn from his capital account every month an amount of Rs.25,000/- for house hold expenses which is apparent from pages 46 to 62 of the paper book. Therefore, keeping in view all the facts and circumstances together, I do not find any justification in the arguments of Learned D. R. Accordingly, the appeal of the assessee stands allowed.
In the result, the appeal of the assessee stands allowed.
(Order pronounced in the open court on 24/06/2022)
Sd/. ( T. S. KAPOOR ) Accountant Member Dated:24/06/2022 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow