ITO, NEW DELHI vs. SH. RAVI KANT BHARTI, NEW DELHI

I.T.A. No. 373 has been preferred by the assessee against the impugned order dated 22.11.2013 passed by the Ld. CIT(A)-XXI, New Delhi. is the cross appeal by the department.

The brief facts of the case are that the assessee is a Vice- Principal in Siddharth International Public School, East Loni Road, Shahdara, Delhi. The assessee, like earlier assessment years, filed his Income Tax Return for the Assessment Year 2005- 06 declaring income from salary and other sources i.e. Bank interest and interest from NSC etc declaring a total income of Rs. 1,91,340/-. On the basis of some information, that the assessee has deposited a sum of Rs. 12.19 lakhs in cash in his SB A/c maintained with The Nainital Bank Ltd., the case was selected for scrutiny under CASS. In compliance to the notice issued, the assessee filed the required documents as has been desired and called upon by the Assessing Officer also filed evidence with regard to the deposit of cash of Rs. 12.19 Lakhs on different dates during the year in his SB A/c maintained with The Nainital Bank Ltd. The assessment was finally completed at Rs. 17,91,310/- after making additions of Rs. 12,19,000/- u/s 69A of the Act being deposits in Nainital Bank Ltd. , Rs. 68,000/- u/s 68 being deposits in Punjab National Bank and Rs. 2,97,000/- on account of alleged payment made by the school in which the assessee was employed. On appeal before the Ld. CIT(A), out of I.T.A. 373 & 668/D/2014 Assessment Year: 2005-06 the three issues, two were decided in favour of the assessee and the additions made by the Assessing Officer to the tune of Rs. 4,60,000/- and Rs. 1,59,000/- were deleted by the Ld. CIT(A). The only issue left and now in appeal before us is the addition of Rs. 6 lakh which has been confirmed as having remained unexplained out of the deposits made in Nainital Bank Ltd.

The Ld. AR submitted that the impugned amount was deposited on 18.06.20004 in assessee’s SB A/c maintained with The Nainital Bank Ltd. It was submitted that in the year 2002-03 the wife of the assessee Mrs. Manju Bharti was diagnosed with lever failure problem and the doctors suggested her for a major lever transplant operation at the earliest. It was also suggested that since this was a costly treatment, the assessee was advised to always keep sufficient funds with him, which could be required at any time. Therefore, on the basis of his doctors’ advice, the assessee and a sum of Rs. 9.35 lakh was sanctioned and accordingly disbursed to the assessee and is evident from the copy of bank statement of ICICI Bank. It was further submitted that immediately the funds were withdrawn by the assessee from the bank for meeting the day-to-day contingencies, but since for one or the other, the operation had to be postponed and the 3 I.T.A. 373 & 668/D/2014 Assessment Year: 2005-06 patient was advised to take medicines only for the time being, the assessee deposited the remaining cash available with him amounnting Rs. 6 Lakh in his SB A/c maintained with Nainital Bank Ltd. on 18.06.2004. It was submitted that the impugned amount was the previously withdrawn cash in hand with the assessee, which was re-deposited by him again in his SB A/c maintained with Nainital Bank Ltd. The Ld. AR submitted that the addition made by the Assessing Officer is based upon his mere presumption, surmises, conjecture and guess work only and as such not tenable in the eyes of law because the Assessing Officer has not adduced, brought or ever placed on record any material which could confirm, that the assessee was not having any sufficient funds in hand prior to its redeposit of the same in his SB A/c. The Ld. AR also submitted that the assessee has also filed and place on records the hospitalization papers and the death certificate of his wife before the Assessing Officer during the course of Assessment proceedings. It was submitted that the addition deserves to be deleted.

The Ld. DR supported the orders of the authorities below and submitted that as the impugned amount could not be I.T.A. 373 & 668/D/2014 Assessment Year: 2005-06 satisfactorily explained, the addition was rightly made by the AO and upheld by the Ld. CIT (A).

We have heard the rival contentions and perused the material on record. We find considerable merit in the argument of the Ld. AR that due to the serious nature of the ailment of the assessee’s wife, the assessee was required to keep large amount of cash at home at all times. The assessee is a salaried employee and he had to arrange a loan to meet the medical expenses of his wife on a day to day basis. The assessee has produced documents in support of the loan taken as well as the medical expenses of his wife. Although, a person may not keep huge amounts of cash under normal circumstances, but given the nature of the ailment and the expenses required for treatment, the same in very much justified. The AO has not been able to bring on record any incriminating fact that would disprove the contention of the assessee. Hence, it is our considered opinion that the impugned addition deserves to be deleted. Accordingly, Ground no. 1 is allowed. Ground No. 2 being consequential is also allowed. Ground no. 3 being premature is dismissed.

In the result, the appeal of the assessee is partly allowed.

As far as filed by the department is concerned, it was pointed out by the Ld. AR that admittedly, the tax effect in this appeal is less than Rs. 10 lakhs.

In terms of CBDT Circular No. 21/2015 dated 10th December, 2015, F. No. 279/Misc./142/2007-ITJ(Pt.) read with Section 268 A of the Income Tax Act, 1961, this appeal by the Revenue should have been withdrawn or should not have been pressed by the Revenue.

In view of the above, this appeal by the Revenue is dismissed in limine.

In the result, the appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed.