LATE SHRI RAM BABU GUPTA,FIROZABAD vs. INCOME TAX OFFICER, WARD-2(2)(1), FIROZABAD

The appeal in AY 2017-18 arises out of the order of the ld. Commissioner of Income Tax (Appeals)/ JCIT(A), Gurugram [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 109/16-17/CIT(A)- 14/,New Delhi dated 01.01.2019 against the order of assessment passed u/s 144 of the Income-tax Act, 1961 dated 31.03.2016 (hereinafter referred to as ‘the Act’) by ITO, Ward-41(2), Delhi (hereinafter referred to as ‘ld. AO’).

Though the assessee has raised several grounds before me, the only issue to be decided in this appeal is as to whether the ld JCIT(A) was justified in confirming the addition of Rs. 10,89,500/- made on account of cash deposit in Canara Bank Account as unexplained money u/s 69A read with Section 115BBE of the Act in the facts and circumstances of the instant case.

I have heard the rival submissions and perused the material available on record. The assessee is an individual having retired from State Govt. Service in Education Department deriving income from pension. The return of income for AY 2017-18 was filed on 07.03.2018 declaring total income of Rs. 2,67,306/-. The case was picked up for limited scrutiny to verify the cash deposit made in the bank account. The notice u/s 143(2) of the dated 08.08.2018 and notice u/s 142(1) of the Act dated 28.01.2019 stood issued to the assessee. The assessee filed another return of income on 11.02.2019 declaring total income of Rs. 3,19,380/- which include income from bangle business on presumptive basis u/s 44AD of the Act. The ld AO noticed that the assessee had deposited cash of Rs. 10,89,500/- during the year under consideration. During the course of assessment proceedings, the ld AO sought to examine the veracity of bangle business being carried out by the assessee. The assessee submitted that he is engaged in bangle business and income thereon have been offered u/s 44AD of the Act. In support of the said business, the assessee furnished purchase invoices dated 05.05.2016 issued by M/s Astha Bangle, Lohiya Nagar, Jalesar Road, Firozabad and invoice dated 08.02.2017 issued by M/s AM Sandeep Bangle Store, Pamashwar Gate, Firozabad. Notice u/s 133(6) of the Act stood issued to these parties which were returned unserved by the postal authorities. Thereafter the Inspector attached to the office of the ld AO was deputed to conduct full enquiry. The Inspector in his report dated 20.11.2019 stated that those firms exist in the given address. Despite this, the ld AO concluded that the assessee had not proved the existence of glass bangle business being carried out and disbelieved the sale proceeds of glass bangles as a source for making the cash deposits. The ld AO accordingly completely ignored the second return filed by the assessee on 11.02.2019 offering additional income and proceeded to complete the assessment by taking the original return of income of Rs. 2,67,040/- and added the cash deposits made in Canara Bank Account in the sum of Rs. 10,89,500/- as undisclosed income u/s 69A read with Section 115BBE of the Act.