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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SH. BHAVNESH SAINI
PER BHAVNESH SAINI, JUDICIAL MEMBER
This appeal by Revenue has been directed against the order of CIT(A)-4, New Delhi dated 26.02.2016 for A.Y. 2011-12, challenging the deletion of addition of Rs.49,04,582/- on account of unexplained cash deposit in the bank account of the assessee u/s 68 of the I.T.Act, 1961 (In short “Act”). 2. I have heard Ld. Representatives of both the parties and perused the findings of the authority below.
Briefly the facts of the case are that the assessee is a Director of M/s G.B.
Springs Pvt.Ltd. and deriving income from salary, interest, dividend and miscellaneous income. It was noted that there is a cash deposit in saving bank account in Punjab National Bank A/c No.4086000100081367 in a sum of Rs.15,60,086/-. Similarly the details of Standard Chartered Bank in the name of Miss Shivya Gupta, daughter of the assessee revealed that there is cash deposit of Rs.4,10,000/- in this bank account. Further, the details of Standard
Page 2 of 5 Chartered Bank in the name of Master Pranav Gupta, son of the assessee revealed that there is a cash deposit of Rs.3,00,000/- in this bank account.
Further, again with Standard Chartered Bank in the name of Mrs. Rachna Gupta and Mr. Vineet Gupta (assessee) joint bank account with the wife revealed that there is a cash deposit of R.34,50,000/- in this bank account. The AO asked the explanation of the assessee regarding source of the cash deposits in these bank accounts. The assessee submitted that the assessee has a joint account with his wife in Standard Charted Bank who has made cash deposits in her account. The assessee has nothing to do with the same. As regards deposit in his name and daughter and sons of the assessee, it was explained that it is out of the source of the assessee. The AO however do not accept contention of the assessee and noted that the PAN no. of the assessee has been used for the purpose of maintaining joint account with his wife. As regards income of the assessee, it was noted that the income has been computed @ 8 % u/s 44AD of the Act, therefore, the source of the deposits are not explained. The AO accordingly made addition u/s 68 of the Act of the aforesaid amount.
The assessee submitted before the CIT(A) that joint account with wife of the assessee belong to his wife who is having first name in the bank account and name of the assessee is mentioned at second place which is a joint account.
Mrs. Rachna Gupta has been assessed to tax for A.Y. under appeal i.e. 2011-12 u/s 143(3). Of the Act. She has declared this bank account in her name to the Revenue. Further, deposit in the case of Miss Shivya Gupta in a sum of Rs.4,10,000/-, the actual account is Rs.3,10,000/-. The amount deposited with the Punjab National Bank in the name of the assessee comes to Rs.16,05,086/-.
The assessee had some miscellaneous income which have been duly shown in Page 3 of 5 the computation of income. The assessee has sufficient cash balance of Rs.27,11,697/- which is supported by cash flow statement. These were withdrawn and deposited in the bank account of the assessee and two minor children. Therefore, all the additions are wholly unjustified. It was submitted that the assessee never submitted or pleaded that he carries on any business of any nature. The assessee has miscellaneous income which has already been shown, therefore, the source of the deposits in the bank accounts are explained.
The submissions of the assessee were forwarded to the AO for his comments but the AO did not make any comment to the submissions of the assessee and evidences produced before the Ld.CIT(A).
The Ld.CIT(A) noted that the joint account of the assessee with his wife, Mrs. Rachna Gupta has been shown in her P&L A/c and she has been assessed to tax. She has first name in the bank account, therefore, there is no question to consider bank account of the wife of assessee as unexplained bank account of the assessee. The Ld.CIT(A) further noted that the assessee has sufficient past savings which are supported by cash flow statement to make deposit in his bank account as well as in the bank accounts of his minor children. The CIT(A) also held that the assessee was not doing any business of scrap sales and miscellaneous income shown is not from any business activity carried out by the assessee. The entire addition was accordingly deleted.
Page 4 of 5 7. After considering rival submissions, I am not inclined to interfere with the order of the Ld.CIT(A). Ld.DR relied upon the order of the AO and contended that the assessee has shown business income @ 8% of the receipt u/s 44AD of the Act, therefore, 92% of the receipts are expenditure as noted by the AO. However, the assessee clarified before the Ld. CIT(A) that he was not doing any business activity of selling scraps but the assessee has miscellaneous income which has already been shown in the return of income and supported by cash flow statement. The Ld.CIT(A) did not approve findings of the AO with regard to carrying any business activity by the assessee in the nature of business of scrap sales. Those findings of the CIT(A) have not been challenged by the Revenue in the grounds of appeal. Thus, the assessee has sufficient income from miscellaneous income. The source of deposits in bank are supported by cash flow statement. The sufficient cash is available to the assessee to make deposit in the bank account of the assessee and his minor children.
As regards, cash deposit in the joint account operated by Mrs. Rachna Gupta and the assessee, it is a fact that she is assessed to tax separately and show his business income to the Revenue and assessed u/s 143(3) of the Act. Her name is appearing as first person in the joint bank account.
Since the joint bank account has already considered in her separate income tax assessment, therefore, same could not be considered as undisclosed deposit in such bank account in the hands of the assessee.
Page 5 of 5 The Ld.CIT(A on proper appreciation of facts and material on the record correctly deleted the addition.
I do not find any infirmity in the order of the Ld.CIT(A) in deleting the addition. No inference is called for.
In the result, the appeal of the Revenue is dismissed. The order is pronounced in the open court.