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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No.995/JP/2024
आयकरअपीलीय अधिकरण] जयपुरन्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ,o Jh ujsUnzdqekj] U;kf;d lnL; ds le{k BEFORE: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No.995/JP/2024 fu/kZkj.k o"kZ@Assessment Years : 2017-18 cuke Sohan Lal Saini ITO 22 Raghunathpuri 1st, Sheopur Vs. Ward 7(2), Jaipur Road Pratap Nagar, Sanganer, Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.:DQQPS 4815 C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Mrs. Suhani Meharwal, CA jktLo dh vksj ls@Revenue by: Smt. Monisha Choudhary (Addl. CIT) lquokbZ dh rkjh[k@Date of Hearing: 10/09/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 26/09/2024 vkns'k@ORDER PER: NARINDER KUMAR, JUDICIAL MEMBER
The above named assessee is feeling aggrieved by the order of the Commissioner of Income Tax, Appeal-2, Mumbai, dated 27/05/2024 [in short Ld. CIT(A) ] for the assessment year 2017-18. Hence, present appeal came to be filed on 22.07.2024,to challenge the order of the ld. CIT(A) , felling aggrieved by assessment order dated 12.11.2019 passed Tax Act, [ for short Act ]. 2. In this appeal, the assessee has raised following grounds: -
“1. On the facts in the circumstances of the case as well as law ld. AO erred in making addition and simultaneously ld. CIT(A) erred in sustaining such addition made u/s 69A amounting to Rs. 618538/- without appreciating the nature of business of assessee and without considering the material available with him which is grossly unjustified and liable to be quashed. 2. Assessee deserves right to amend, alter, modify and delete any ground of appeal on or before the date of hearing of appeal.”
3. Succinctly, the facts as culled out from the record are that the assessee filed his ROI for AY 2017-18 electronically on 27.03.2018 declaring total income at Rs. 2,74,800/-. The case was selected for scrutiny through CASS and notice u/s 143(2) dated 25.09.2018 was issued, which was duly served through online.
Upon issuance of various notices, assessee participated and filed on-line submissions and furnished copy of bank statements along with required details and documents.
Assessee is running a banking kiosk, authorized by the Bank of Baroda in which he accepts payments from bank customers for deposit in customer's bank account. He also makes payments to customers on behalf of bank. from Salary as Rs. 1,44,000/- and income of Rs. 1,30,797/-,from other sources.
The income tax return so filed was subjected to limited scrutiny for the verification and examination of the issue of “Cash Deposits during the demonetization period”.
On said aspect of the matter, ld. AO noted that the assessee had filed on-line reply alongwith copy of authorization certificate, copy of bank statement for demonetization period, details of cash deposit, cash withdrawal from bank, details of cash received from the depositors and the cash payments to customers/account holders.
Ld. AO, while examining the bank statement found that during demonetization period, assessee had deposited Rs. 17,16,500/- and made payments to the customers for an amount of Rs.7,40,850/- (Rs.5,89,950/- + Rs.1,50,900/-).Assessee was found to have collected cash from customers to the tune of Rs.12,26,812/- and made cash withdrawal from Bank, in total of Rs.6,12,000/- .
Thus, total money, collected by the assessee from customers as well withdrawals from bank, came to Rs 18,38,812/-. demonetization and given to customers total sum of Rs.7,40,850/-. Thus, total payment made to customers and cash deposited in bank account came to Rs. 24,57,350/-.
In this way, during demonetization period, assessee made deposits/ payment to customers for an amount of Rs.6,18,538/- in excess to the total collections made from the customers and bank withdrawals.
During the scrutiny, out of such excess payment, the assessee mentioned that a sum of Rs.3,52,500/- i.e. (Rs.2,77,500/- and Rs. 75,000/-) was deposited by him on 13.11.2016 and 21.11.2016, out of his savings and other family members savings. Ld. AO observed that no evidence was submitted by the assessee on this point.
Assessee having not furnished any proper explanation regarding deposit of Rs.6,18,538/- during demonetization, Learned Assessing Officer considered the same as unexplained credit u/s. 69A of the Act.
Aggrieved by the order of the assessment, assessee preferred an appeal before ld. CIT(A). Apropos to the grounds raised by the assessee, findings recorded by ld. CIT(A) are reiterated here in below:
“6.DECISION
Vide this Ground, that Appellant has stated that the AO has erred in making an addition of Rs.6,18,538 u/s 69A of the Act.
6.1 The AO observed from the details filed by the appellant that the appellant had deposited Rs17,16,500/- in cash during demonetisation. Further he had also given Rs 7,40,850 to the customers. The total of this worked to Rs 24,57,350/-. Against the same the appellant had collected Rs 12,26,812 from customers and made cash withdrawal from bank of Rs 6,12,000/-. Hence the appellant had explanation for a sum of Rs 18,38,812/-. The balance of Rs 6,18,538/- was unexplained. The AO added this amount under 69A.
6.2 During appellate proceedings the appellant stated that Assessee has been appointed as "Correspondent agent for kiosk banking operation for Sanganer Branch would be linked BOB BranchSanganer Jaipur on 26/06/2016. In kiosk banking the bank comes to the area to process transactions, allow credit, and enable access of these services to low-income groups. The kiosks act as a touchpoint for the banks and the people. When requests are initiated in the kiosk, usually like the opening of a bank account or request for making a deposit, they are transferred to the nearest branch which processes it.
The appellant further stated his father had withdrawn Rs. 310000/- Rs. 170000/- & 100000 from his bank during the month of July and September. The shortfall he stated is received from his father and also enclosed his banks statement.
6.3 The submission of the appellant have been perused. The AO has taken into account the Kiosk Collection. As regards the shortfall the appellant has stated that the said amounts were received from his father. He also submitted a letter of his father to this effect. This letter is more of a self servingdocument. The appellant has not explained why the withdrawals made in sept/July were still lying withhim unused.
6.4 Thus, it is a fact of the case that the credit was treated as unexplained by the AO because sourceof money has not been established to be believable. The burden of proof was on the appellant to prove the claim made by him in his return of income. The AO has no material as to how the appellant has earned income and therefore the appellant, and the appellant only has to furnish material to prove his case Apparently, if the appellant does not furnish any such material, the appellant cannot be discharged of his burden of proving it genuineness. The submissions of the appellant is not found fully acceptable in the appellate proceedings as well.
Thus, under these set of facts, the AO has correctly made the addition of Rs. 6,18,538/- u/s 69A of the Act. Ground is, thus, dismissed.” us. To support the various grounds raised, ld. AR of the assessee has filed the written submissions which read as follows:
“Assessee is an individual, who filed his return of income u/s 139 electronically on 27.03.2018 declaring total income at Rs. 274800/-. The case was selected for scrutiny through CASS and notice u/s 142(1) was issued and in the response of the same assessee filed the on-line submissions and documents. The assessment was completed u/s 143(3) of I.T Act 1961 by adding Rs. 618538/- on account of unexplained cash deposited into bank u/s 69A of the I.T Act 1961. Thereafter, Ld. CIT (Appeal) also sustained the addition. Aggrieved with the order, assessee preferred this appeal as many as taking two grounds of appeal: -
Ground of Appeal no. 1 “On the fats and in the circumstances of the case as well as law Ld.AO erred in making addition and simultaneously Ld.CIT(A) erred in sustaining such addition made u/s 69A amounting to Rs. 618538/- without appreciating the nature of business of assessee and without considering the material available with him which is grossly unjustified and liable to be quashed.” Facts of the case: - This is undisputed fact that assessee was appointed as “Correspondent agent for kiosk banking operation for Bank of Baroda for Sanganer Jaipur area on 26/06/2016. Kiosk banking is essential for ensuring financial security of all citizens of the country, regardless of who they are and where they reside in the country. In kiosk banking, because of the lack of bank branches, the customer cannot go to the bank. Instead, the bank comes to the area to process transactions, allow credit, and enable access of these services to low-income groups. Kiosk are small booths with internet connections established in villages with personnel to help the customers avail basic bank services. Most mainstream banks in all the sectors, private, public and cooperative, open a kiosk for the people. The services provided are usually withdrawals, deposits, remittances, etc. The kiosks act as a touchpoint for the banks and the people. When requests are initiated in the kiosk, usually like the opening of a bank account or request for making a deposit, they are transferred to the nearest branch which processes it. Assessee accepts cash from various customers of bank to deposit such cash into their account, which in turn, assessee deposits such money into the customers accounts. Further, assessee return the deposits of customers on the strength of withdrawal slips, which later on, debited to customers account by branch.
During the course of hearing assessee produced cash statement before AO for the period commencing from 01/11/2016 to 31/12/2016 (Demonatisation period).
Total cash withdrawal and cash receipt from customer along with receipt from father to deposit cash into bank a/c were Rs.2740022/- apart from this opening balance of cash as on 01/11/2016 was Rs. 40000/-. Therefore, total cash in cash book along this period was Rs. 2780022/-. Out of this amount assessee deposited cash amount to Rs. 1716500/- into bank a/c and also returned to customer amount to Rs. 740850/- total Rs. 2457350/-. Apart from this Rs. 86596/- were expended. assessee explained that he received Rs.277500/- and 75000/- from his father to deposit during demonetisation.
I am herewith enclosing bank statement of father placed on page no 2-3 of paper book which reveals that his father had withdrawn Rs. 310000/- Rs. 170000/- & 100000 from his bank during the month of July and September.
Summary of cash flow in tabular format is as under: -
Particulars Amount Opening balance of cash as on 1.11.2016 as per cash book placed 40000/- on page no 26-27 of paper book Total cash withdrawal and cash receipt from customer along with 2740022/- receipt from father to deposit cash into bank a/c as per cash book placed on page no 26-27 of paper book Total cash available with assessee 2780022/- Cash Deposited in bank as per cash deposits slips placed on page (1716500) no 28-35 of paper book Cash Returned to customers as per statement of withdrawn (740850) returned to customers placed on page no 4-13 of paper book Cash Expenditure (86596) Cash Received from father confirmation of father placed on page no 352500/- 1 of paper book Bank statement page no 2 & 3 Excess cash available with assessee for deposit in bank account 588576/-
Your honour the AO has wrongly calculated the shortall in spite of filling all the details of receipt from father, receipt from customer for depositing and withdrawal from bank.
On the law, I want to refer various case laws also:
ITAT deletes Income Tax Addition Sudhir Kumar Tiwari vs Income Tax Officer2022 TAXSCAN (ITAT) 1464 The Income Tax Appellate Tribunal (ITAT), Allahabad Bench deleted Income Tax Addition on the ground that the explanation was past savings of HUF and its members and no other deposits were made during demonetization. ITAT Bench of Allahabad observed that “Accordingly, in the facts and circumstances of the case when the assessee has explained the source of Rs. 1,00,000/- as past savings of the assessee HUF and its members and there are no other deposits during the demonetization the addition made by the Assessing Officer is deleted.”
ITAT Deletes Addition Anjali Roy Vs Income Tax Officer 2023 TAXSCAN (ITAT) The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition made by the assessing office under section 69 of the Income Tax Act,1961 on the ground of unexplained investment in a bank account. Hon’ble bench held that the assessee had not made any unexplained investment in the bank account and whatever deposits were made are either out of the past savings or from the loans taken from relatives and the addition made by the assessing officer was against the law and are liable to be deleted while allowing the appeal filed by the assessee.
The DCIT vs M/s. Bhanu Infrabuild Pvt. Ltd. 2023 TAXSCAN (ITAT) 2159 The Delhi Bench of Income Tax Appellate Tribunal (ITAT), held that the assessee has successfully demonstrated source of cash deposit to its bank account during demonetization period thus no income tax addition can be made under Section 68 of Income Tax Act, 1961.
Ground of Appeal no. 2 General in nature On the above facts, the entire addition deserves to be deleted.”
To support the contentions raised in the written submission reliance has been placed on the following evidence / record as depicted in the paper book :
Sr. No. Particular Page no. 1 Confirmation of father 1 2 Bank Statement of father 2-3 3 Statement of withdrawn to returned to customers 4-13 4 Statement of Receipts from customers to deposit into 14-25 bank
5 Cash book 26-27 6 Cash Deposits slips 28-35 7 Reply before CIT(A) 36-39
To further support the contention Ld. AR has placed on record an affidavit of father of the assessee so as to clarify the fact of availability of source of cash deposited into the bank account of the assessee. The contents of the affidavit reads as under:
In addition to the above written submission, Ld. AR of the assessee vehemently argued that the findings of Assessing Officer are based on incorrect appreciation of facts, as he wrongly assumed that payment of Rs. 7,40,850/- + cash deposit of Rs. 17,16,500/- in total an amount of Rs. 25,57,350/- . That out of that assessee had cash available to the tune of Rs. 18,38,812/- and thereby a short fall of Rs. 6,80,538/- was added in the hands of the arbitrarily.
Ld. AR has submitted in the alternative that deposit of Rs. 2,77,500/- on 13.11.2016 and Rs. 75,000/- on 21.11.2016 made by the assessee was source from his father. In support of this claim, assessee has filed affidavit of his father, wherein he has testified that he had a sum of Rs. 2,70,000/- available with him, out of previous withdrawals.
As further submitted, balance amount of Rs. 2,66,038/- was out of saving of the assessee benefit of which cannot be denied.
Per contra, Learned DR has relied upon the order of lower authorities and submitted that ld. AO acted fairly with the assessee and added only those amounts, source of which could not be explained by the assessee, and that ld. AO’s approach being holistic, addition made should be sustained.
As noticed above, the solitary challenge raised by the assessee in this appeal is to the addition of Rs. 6,18,538/- made by ld. AO and sustained by ld. CIT(A).
It may be mentioned that while examining the bank statement, Learned Assessing Officer found that during the demonetization period, amount of Rs.7,40,850/- (Rs.5,89,950/- + Rs.1,50,900/-). Against the same, assessee had collected from customers cash of Rs.12,26,812/- and done cash withdrawal from Bank to the tune of Rs.6,12,000/-. Thus, the total of amount collected from customers and withdrawal from the bank, comes to Rs 18,38,812/-, whereas assessee deposited cash of Rs. 17,16,500/-.
In view of the above material, we do not find any infirmity in the explanation of the assessee put forth in this regard, and consequently hold that the addition made has no basis. So, we direct for deletion of said addition.
Ld. CIT(A) has not disputed collections at the kiosk, but from the alleged short fall, he doubted the claim of the assessee about receipt of money from his father, as claimed.
The assessee, in the proceedings conducted below, submitted a letter from his father to this effect, but same was not believed on the ground that it was a self-serving document.
Before us, appellant has filed attested affidavit of his father. Said affidavit supports the version of the assessee. that the assessee having not advanced the reasons for making withdrawals made by the assessee in September /July, the same was lying with the assessee. Here, we may mention that the withdrawal was doubted simply because purpose of withdrawal was not given, but, we do not find it to be a sound reason to reject the claim of the assessee, especially when the source of withdrawal was not doubted. Therefore, even on this aspect of the matter, we deem it to be a fit case for deletion of the addition. Result In the result, the appeal of the assessee deserves to be allowed. Same is hereby allowed. File be consigned to the record room, after the needful is done by the office. Order pronounced in the open court on 26/09/2024.
Sd/- Sd/- ¼jkBkSM+ deys'k t;UrHkkbZ ½ ¼ujsUnz dqekj½ (RATHOD KAMLESH JAYANTBHAI) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Sohan Lal Saini vs ITO Tk;iqj@Jaipur fnukad@Dated:- 26/09/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Sohan Lal Saini, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Ward-7(2), Jaipur 3. vk;djvk;qDr@ The ld CIT vk;dj vk;qDr¼vihy½@The ld CIT(A) 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File (ITA No. 995/JP/2024) 6. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत