SMT. SUSHMA NAIK,PUNE vs. INCOME-TAX OFFICER,

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.

“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 On the facts and circumstances of the case and in law the sustained addition of Rs.6,00,000/- by the Ld.CIT(A) originally made by the A.O. under S. 69A was also not justified since the provisions of S. 69A are not applicable to the facts of the case.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.

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/-.

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.

appeal before us with the grounds raised above.

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.

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.

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.

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/-.

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.

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