DR. (SMT) MADURA CHANDU,BANGALORE vs. ITO, BANGALORE

PDF · subscribers
ITA 732/BANG/2015Status: DisposedITAT Bangalore14 October 2016AY 2009-105 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the cash deposits to the extent of Rs. 30,01,000 should be treated as explained, considering the miscellaneous income of Rs. 45 lakhs reported by the appellant. Consequently, the penalty levied on the sustained addition was also quashed.

What were the facts?

The assessee, a doctor, filed a return of income declaring Rs. 1,92,220. The Assessing Officer made additions for unexplained cash deposits (Rs. 110.50 lakhs) and unexplained investment in plant and machinery (Rs. 116 lakhs). The CIT(A) deleted the addition for plant and machinery and reduced the cash deposit addition to Rs. 30,01,000.

What were the issues?

Whether cash deposits can be explained by miscellaneous income, and if penalty is leviable when the primary addition is quashed.

Which sections of the Income-tax Act were involved?

Section 68,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, BANGALORE

Before: SMT. ASHA VIJAYARAGHAVAN & SHRI INTURI RAMA RAO

For Appellant: Shri V.Srinivasan, Advocate
Hearing: 07/09/2016Pronounced: 14/10/2016

O R D E R Per INTURI RAMA RAO, AM :

These are appeals filed by the assessee directed against the two orders of the Commissioner of Income-tax (Appeals) [CIT(A)], Bengaluru, both dated 31/03/2015 for the assessment year 2009-10.

2.

The assessee raised the following grounds of appeal in :

ITA No.733/Bang/2015:

3.

Briefly facts of the case are as under: The appellant is an individual deriving income under the head ‘profession’ as a doctor. Return of income for the assessment year 2009-10 was filed on 29/07/2009 declaring a total income of Rs.1,92,220/-. After processing the said return of income u/s 143(1) of the Income-tax Act,1961 [‘the Act’ for short], the assessment came to be completed u/s 144 of the Act vide order dated 30/12/2011 by the ITO, Ward 5(4), Bangalore, at a total income of Rs.2,28,54,250/-. While doing so, the Assessing Officer [AO] made addition on account of unexplained cash deposits of Rs.110.50 lakhs u/s 68 of the Act and made addition of Rs.116 lakhs on account of unexplained investment in plant and machinery u/s 69 of the Act.

4.

Being aggrieved, an appeal was preferred before the CIT(A) who, vide impugned order, had deleted addition on account of unexplained investment of Rs.116 lakhs and in respect & 733/Bang/2015 Page 4 of 5 of unexplained cash deposits after calling for remand report from the AO reduced addition to the extent of Rs.30,01,000/-.

5.

Being aggrieved by this addition, appellant is in appeal before us in the present appeal.

5.1 Learned counsel for assessee vehemently contended that the CIT(A) ought to have telescoped this addition against miscellaneous income reported of Rs.45 lakhs disclosed by the appellant.

5.2 On the other hand, learned Departmental Representative placed reliance on the orders of the lower authorities.

6.

We heard rival submissions and perused material on record. When the appellant has reported miscellaneous income of Rs.45 lakhs, same can be deemed to have been deposited in bank. Thus cash deposit to the extent of Rs.30,01,000/- should be treated as explained. The fact that returned income is lower is only Rs.1,92,220/- does not suggest that there was no source for making deposit of cash in bank out of known source of income. Returned income can be lower for many reasons which does not involve outflow of cash such as depreciation. Thus, the appeal is treated as allowed.

7.

The appeal bearing is filed challenging the direction of the CIT(A) confirming levy of penalty on the addition sustained of Rs.30,01,000/-. In the appeal filed by the & 733/Bang/2015 Page 5 of 5 assessee viz. we have quashed addition and hence, the question of levy of penalty does not arise. As such, the appeal filed by the assessee is allowed.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →