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Income Tax Appellate Tribunal, SMC BENCH, PUNE
आदेश आदेश / ORDER आदेश आदेश
PER D. KARUNAKARA RAO, AM :
This appeal is filed by the assessee against the order of CIT(A)-5, Pune, dated 17-06-2016 for the Assessment Year 2010-11.
Grounds raised by the assessee read as under :
“1. On the facts and circumstances of the case and in law, the Ld. CIT(A) was not justified in sustaining the addition of Rs.6,00,000/- out of total addition made by the A.O. of Rs.12,00,000/- u/s.69A of the Act. It be deleted. 2. On the facts and circumstances of the case and in law the sustained addition of Rs.6,00,000/- by the Ld.CIT(A) originally made by the A.O. under S. 69A was also not justified since the provisions of S. 69A are not applicable to the facts of the case. The sustained addition be deleted. 3. On the facts and circumstances of the case and in law the Ld. CIT(A) was also not justified in confirming the addition of Rs.3,41,000/- made by the A.O. received by the assessee from her husband. The A.O. had made the addition under S.69A of the Act. The provisions of S. 69A are not applicable to the facts of this case. The addition confirmed by Ld.CIT(A) be deleted.
The appellant craves to leave, add/amend or alter any of the above grounds of appeal.”
Briefly stated relevant facts of the case are that the assessee is an
individual and derives income from giving tuitions to the students.
Assessee filed the return of income on 19-03-2012 declaring total income of
Rs.2,75,800/-. During the course of assessment proceedings u/s.143(3) of
the Act, AO noticed from the bank account statements of the assessee the
fact of depositing of cash amounting to Rs.19,42,000/-. Assessee
submitted that the source of this cash includes the sale proceeds of a row
house located at Avdhoot Arcade, Vadgaon, Pune, tuition fee, withdrawals
from the bank account of her spouse. According to the assessee, the said
row house was sold for a sum of Rs.35 lakhs and the same is reflected in
the return of income of the assessee’s spouse Shri Shailesh Naik. Relevant
submissions of the assessee as mentioned in Para No.3 of the assessment
order are extracted as under :
“The assessee has submitted that the cash of Rs.13,75,000/- out of which the cash of Rs.1,75,000/- is recorded in the agreement to sale which has already been disclosed by the assessee husband. The balance cash of Rs.12,00,000/- was claimed to be received from Shri Madhumkar Dattatray Nimbalkar and her wife Smt. Chaya Madhukar Nimbalkar which was claimed to be returned back to them in cash by the assessee after getting the DD of Rs.12,00,000/- on 01-01-2010 in the bank account. Thus, it was contended that the agreement price of the row house is correct and only the cash was taken and then returned back.”
Thus, Rs.12 lakhs is received from the buyer of the row house. Further, as
per the agreement to sale, Rs.1,75,000/- is the cash received by the
assessee. That totals to Rs.13.75 lakhs. That leaves the difference amount
of Rs.5,67,000/- to be explained (Rs.19,42,000 – Rs.13,75,000). In this
regard, assessee explained that Rs.2,26,000/- was earned from giving
tuition leaving the balance of Rs.3,41,000/- to be explained. This amount
of cash was received from her husband Shri Shailesh Naik. Bank Account
statement of Shri Shailesh Naik was furnished to support the same.
However, to verify the claim of receipt of Rs.12 lakhs, AO invoked the
provisions of section 131 of the Act in the case of Ms. Chaya Madhukar
Nimbalkar. Rejecting the explanation of the assessee regarding the source
of cash of Rs.12 lakhs, the AO invoked the provisions of section 69A of the
Act and made addition of Rs.15,41,000/- to the income returned by the
assessee. The assessed income is determined at Rs.18,16,800/-.
During the First Appellate proceedings, assessee filed the written
submissions and submitted that they received cash advance of Rs.12 lakhs
on 02-07-2009, 04-08-2009 and 18-08-2009 respectively. The said
amounts were deposited in the bank account. Once the deed of assignment
dated 06-11-2009 was finalized, assessee returned the same money after
swapping with the Demand Draft for equivalent amount. The repayment of
Rs.12 lakhs by way of cheques was evidenced by the assessee during the
First Appellate proceedings. Contents of Para No.4.3 are relevant. On
considering the assessee’s submissions, for want of certain details from the
bank, the CIT(A) gave relief to the extent of Rs.6 lakhs and confirmed the
balance of Rs.6 lakhs.
Regarding the cash of Rs.3,41,000/- received by the assessee from
her husband Shri Shailesh Naik, out of his withdrawals from the bank
account, which formed part of the aforesaid addition (i.e., Rs.15,41,000 (–)
Rs.12,00,000), the CIT(A) rejected the assessee’s explanation and
confirmed the addition made by the AO.
Aggrieved with the part relief given by the CIT(A), the assessee is in
appeal before us with the grounds raised above.
The undisputed facts include that the assessee deposited cash of
Rs.19.42 lakhs in her bank account. The details of the sources for the said
cash deposits are tabulated as under :
Total cash deposits Rs.19,42,000 Less : i. cash received from the buyer Rs.12,00,000 ii. Cash received as per agreement to sale Rs.1,75,000 iii. Cash received from her husband Rs.3,41,000 iv. Cash received from tuition Rs.2,26,000
Out of the above, AO decided to add the items at Sl.No.(i) and (iii) in the
assessment. In the First Appellate proceedings, the CIT(A) granted relief to
the extent of Rs.6 lakhs and confirmed the balance of Rs.6 lakhs for want
of details. Regarding other addition of Rs.3,41,000/- also, it is the case of
the CIT(A) that the assessee received only Rs.31,000/- in her bank account
from her spouse. However, he did not comment on the use of the cash
withdrawn by her spouse. We shall take up these two issues raised by the
assessee in the grounds.
In connection with Ground Nos.1 & 2 relating to the confirming of
addition of Rs.6 lakhs, Ld. Counsel for the assessee submitted that the
CIT(A) erred in confirming the addition of Rs.6 lakhs on the ground that the
cheques involved are merely self-cheques and the assessee failed to
substantiate that the said cash was repaid to Ms. Chaya Madhukar
Nimbalkar. According to the CIT(A), there is no evidence with the assessee
to demonstrate that the buyer has withdrawn the relevant cash of Rs.6
lakhs at her end.
On hearing both the parties on this issue, we are of the opinion that
the onus has shifted. Assessee has discharged her onus in giving sufficient
explanation and the details of cheques along with dates and the details of
the bank. At this stage, it is for the AO to discharge the onus to
demonstrate that the amount was not withdrawn by the buyer. In our
view, the AO has failed to bring any evidence to demonstrate that the
amount was not withdrawn by the buyer. Therefore, in our view, the
confirmation of addition by the CIT(A) is not only premature but also
unwarranted. Accordingly, Ground Nos. 1 and 2 raised by the assessee are
allowed and decided in favour of the assessee.
Regarding Ground No.3 relating to the confirmation of addition of
Rs.3,41,000/- by the CIT(A), the CIT(A) vide the summary of his discussion
given at Para Nos. 6.1 to 6.3, dismissed the explanation of the assessee and
confirmed the addition. CIT(A) discussed the fact that there are direct
remittances from the assessee’s account to the extent of Rs.31,000/-.
CIT(A) also ignored the fact that her husband has cash withdrawals to
explain advancing of the amount of Rs.3,41,000/- to the assessee. CIT(A)
did not deal with the assessee’s claim of cash withdrawal by her husband
on the source of cash of Rs.3,41,000/-.
After hearing both the sides, we are of the opinion that the approach
of the CIT(A) is hypertechnical and his decision for rejecting the explanation
given by the assessee is unsustainable. In any case, it is not the case of
the Revenue that the cash withdrawn by her husband is utilized elsewhere
by him. Therefore, we are of the view that the explanation given by the
assessee constitutes a possible explanation. Revenue has not brought to
record any adverse material to prove the contrary. Therefore, Ground No.3
raised by the assessee is also required to be allowed in favour of the
assessee.
In the result, appeal of the assessee is allowed.
Order pronounced on this 23rd day of March, 2018.
Sd/- Sd/- (SUSHMA CHOWLA) (D.KARUNAKARA RAO) �ाियक सद� / JUDICIAL MEMBER लेखा सद� / ACCOUNTANT MEMBER पुणे / Pune; �दनांक Dated : 23rd March, 2018. Satish
आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to : अ�ेिषत
अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / The CIT(A)-5, Pune 3. आयकर आयु� / The CIT-5, Pune 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “एक सद�य 5. एक सद�य” / एक सद�य एक सद�य DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. 6.
आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार
स�यािपत �ित //True Copy// //True Copy// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune