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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI,
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 45/JP/2024 fu/kZkj.k o"kZ@Assessment Years : 2017-18 cuke Smt. Rajni Gupta, ACIT, Vs. 09, Keshav Nagar, Alwar Central Circle, Alwar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AFJPG 9455 P vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. P. C. Parwal, CA jktLo dh vksj ls@ Revenue by : Sh. Arvind Kumar, CIT lquokbZ dh rkjh[k@ Date of Hearing : 29/05/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 04/06/2024 vkns'k@ ORDER
PER: RATHOD KAMLESH JAYANTBHAI, AM
Assessee aggrieved because of the order of the Commissioner of Income Tax (Appeals)-4, Jaipur dated 13/12/2023 [here in after ld. CIT(A)] for assessment year 2017-18 which in turn arise from the order dated 25.12.2019 passed under section 153A r.w.s 143(3) of the Income Tax Act, by ACIT, Central Circle, Alwar.
In this appeal, the assessee has raised following grounds: -
2 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT “1. The ld. CIT(A) has erred on facts and in law in confirming the addition of Rs. 16,05,000/- u/s 68 of the Act by treating the cash deposit in the bank account during demonetization period as unexplained income of the assessee by not accepting the explanation of assessee that source of such cash deposit is the amount received from sale of agriculture land at Naharpur on 07.04.2015. 2. The ld. CIT(A), NFAC has erred on facts and in law in taxing the alleged unexplained cash deposit in the bank account u/s 115BBE @ 60% instead of taxing the same @ 30% by ignoring that section 115BBE substituted by Taxation Laws (Second Amendment Act), 2016 which received the assent of President on 15.12.2016 and made applicable from 01.04.2017 is not applicable to AY 2017- 18. 3. The appellant craves to alter, amend and modify any ground of appeal 4. Necessary cost be awarded to the assessee.”
Succinctly, the fact as culled out from the records is that the
assessee primarily derives her income from business, house property
income and income from other sources. Assessee filed her original return
of income u/s 139 of the Act, on 31.10.2017 for the AY 2017-18 vide Ack.
No. 278562830311017 declaring a total income at Rs. 3,04,540/-.
Assessee belongs to Gupta Group, Alwar on whose premises, a search
and seizure u/s 132 of the Act was carried out on 22.09.2017.
3.1 During the course of search action, cash, jewellery, valuable, stock-
in-trade, documents, books of accounts and/or loose papers were found
and/or seized from the premises of the members of the Gupta Group of
which one such member is the assessee. Pursuant to this, a notice u/s
3 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT 153A of the Act to the assessee was issued on 09.10.2018, in compliance
of which, assessee e-filed her return of income on 02.11.2018 for the AY
2017-18 vide Ack. No. 372412101021118 declaring a total income at Rs.
3,04,540/-.
3.2 From the bank account of the assessee the ld. AO noted that the
assessee has deposited cash on 10.11.2016, 11.11.2016, 12.11.2016, and
13.11.2016 each day Rs. 1,95,000/- and on 16.11.2016 a sum of Rs.
8,25,000/- deposited totaling to Rs. 16,05,000/-. To verify the source of
deposit of cash the assessee was asked to file necessary details /
documents / explanation with regard to source of cash deposited in her
bank account maintained with the Punjab and Sindh Bank. The assessee
filed the reply on 23.12.2019 contending that cash deposited is out of the
cash balance available with her and the immediate source of the cash is
sale of land. Explanation of the assessee was not considered by the ld.
AO that the assessee is holding the cash since April 2015 was kept in her
possession. Finally, the ld. AO completed the assessment u/s 153A r.w.s.
143(3) of the Act vide order dated 25.12.2019 at a total income of Rs.
19,09,540/- by making an addition of Rs. 16,05,000/- being cash deposited
4 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT in the bank account during the demonetization period i.e. between
09.11.2016 to 30.12.2016.
The assessee aggrieved, from the finding so recorded in the
order of the assessment and therefore, she preferred an appeal
before the ld. CIT(A) challenging the action of the ld. AO. The ld.
CIT(A) who after hearing the contention of the assessee dismissed
the appeal of the assessee by giving following findings on the issue:-
“5.4 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order, the remand report submitted by the AO. The contentions/submissions of the appellant are being discussed and decided as under:- The appellant has claimed that the rate of tax of 60% / section 115BBE is applicable with effect from assessment year 2018 19 and not with effect from assessment year 2017 18. The submissions of the appellant have been considered carefully in this regard. The issue has been dealt with in the following judgments Maruthi Babu Rao Jadav v. Asstt. CIT [2021] 430 ITR 504 (Ker.) [WA.No.984 OF 2019] "The writ petition sought for a declaration that the amendments made by the Taxation Laws (Second Amendment) Act, 2016, to Section 115BBE of the Income Tax Act, 1961 enhancing the rate of income tax, for specified incomes which are unexplained, to 60% and the surcharge provided in the Finance Act, 2016 to 25% for income covered under Section 69A, to be prospective. The above referred enactments are herein after referred to as the 2nd Amendment Act', 'IT Act' and the 'Finance Act. The 2nd Amendment Act was dated 15.12.2016 and the amendment to Section 115BBE was specified to be effective from 01.04.2017. The amendment enhancing the rate of tax was incorporated in the IT Act and that of surcharge in the Finance Act. On declaration, consequential relief is sought against Ext.P2 assessment order levying tax at the enhanced rate
5 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT of 60% and surcharge @25% on the 'advance tax'. The learned Single Judge rejected the writ petition by a cryptic judgment relying on Commissioner of Income Tax v. S.A. Wahab. ((1990) 182 ITR 464 (KER)).
The learned Counsel Sri. Vishnu S Arikkattil appearing for the appellant would contend that even going by the decision in Karimtharuvi Tea Estate ltd. v. State of Kerala (AIR (1966) SC 1385) an amendment made on the 1 st day of April of any financial year would apply to the assessments of that year. That is, if an amendment is brought into force on 01.04.2017, as is the case here, it can only apply to the assessment made in 2018-2019 (Assessment Year) of the income accrued for the previous financial year, which is 2017- 2018. The learned Counsel would seek to draw a distinction insofar as a modification of the rate as brought out in the Finance Act and a substantive provision altering accrued rights or creating new liabilities, on the 1st of April of an year. In the former, it could apply to the assessments of the previous year, made in that financial year, but a substantive amendment not relating to the rates, could only be applied to the assessments of that financial year and not of the previous year. Reliance is placed on the Constitution Bench decision of the Hon'ble Supreme Court in C.LT Vs. Vatika Township Private Ltd. (2015) 1 SCC 1. The learned Counsel would also place before us a number of decisions of the Hon'ble Supreme Court in Kesoram Industries v. Commissioner of Wealth Tax, (AIR 1966 SC 1385), Guffic Chem P. Ltd v. C.LT (2011(4) SCC 245), CIT u. Sarkar Builders (2015) 375 ITR 392 (SC)), Shiv Raj Gupta v. C.1.T (2020) 425 ITR 420(SC)) and State of Kerala v. Alex George (2004) 271 ITR 290(SC), to further buttress his arguments. Reliance is also placed on the Full Bench decision of the Patna High Court in Loknath Goenka v. C.LT 2019 417 ITR 521(Patna)). ….. ……..
The assessee contends that the seizures were made prior to the amendment. The affidavits admitting the ownership of amounts seized were also submitted prior to the amendment. The assessee was not aware of the enhanced tax hability when the admissions were made before the authorities. The assessee has also made an attempt to relate the amendments to the demonetization of the specified currencies announced on 08.11.2016 which contention we reject at the outset. The subject amendments which are relevant for our consideration have no direct link with the demonetization introduced or the taxation and investment regime of Pradhaan Mantri Garib Kalyan Yojana 2016 brought in under Chapter IX A of the 2 nd amendment Act. The 2nd amendment Act as is clear from the Statements of Objects and Reasons, was to curb, evasion of tax and black money as also plug loopholes in the IT Act and to ensure that defaulting assessees are subjected to higher tax and
6 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT stringent penalty provision. Both the measures spoken of herein were to further the said objects and there cannot be any nexus assumed nor is it discernible. 13. Section 115 BBE was inserted by Finance Act 2012 w.e.f 01.04.2013. As on 01.04.2016 the financial year in which the subject seizures occurred Section 155BBE provided for 30% tax on income refereed to in Sections 68, 69, 69A, 69B, 69C and 69D. The same was amended by the 2nd Amendment Act; w.e.f. 01.04.2017, enhancing the rate to 60%. Hence there was no new liability created and the rate of tax merely stood enhanced which is applicable to the assessments carried on in that year. The enhanced rate applies from the commencement of the assessment year, which relates to the preisous financial year. …………… ……….
In the financial year 2016-17 (tself the tax as provided under section 115BBE and the surcharge on advance tax was available as discernible from the IT Act and Finance Act. 2016 as it stood on 1.4.2016 itself. A major misdemeanor leading to assessment of income as accrued under Section 69A invites the consequences of Section 115BBE and surcharge provided under Section 2(9) of the Finance Act, 2016. When it stands enhanced from 01.04.2017, for every assessment carried out in that year, related to the previous year, the rates as applicable on 01.04.2017 has to be applied. There being no netw habthty created or obligation imposed, the arguments raised by the appellant's counsel fails. The appellant cannot have a contention that he committed the misconduct on the expectation that if he were caught he would have to shell out only lesser amounts as fax and surcharge. There is no right accrued on the assessee to commit an offence on the expectation of a lesser penalty. ………….. ……………
In the instant case surcharge was imposed by Finance Act, 2016 and the rate stood enhanced by Finance Act, 2017. The Income Tax even as per the Finance Act was to be at the rate specified in Part I of the 1st Schedule which shall be increased by surcharge for purposes of the Union. Surcharge hence partakes the character of Incometax and Article 271 itself empowers the Parliament, at any time to increase any of the duties or taxes by a surcharge for the purpose of the Union and it forms part of the Consolidated fund. So when a surcharge is imposed it is in effect an enhancement of the tax or duty. The provision in the Finance Act also employs the words the income tax computed... shall be increased by a surcharge. Section 4 of the IT Act squarely applies to the surcharge imposed.
7 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT The judgment of the learned Single Judge is affirmed for the for the reasoning herein above and the Writ Appeal would stand dismissed without any order as to costs.
Karthick Natarajan v. Deputy Commissioner of Income-tax, International Taxation [2023] 154 taxmann.com 136 (Chennai Trib.)/[2023] 202 ITD 552 (Chennai Trib.)[11-07-2023]
"10.2 We noted from the taxation law, Second Amendment Act, 2016 that the Income- tax payable shall be the aggregate of the amount of income- tax calculated on the income referred to clause (a) and clause (b) of section 115BBE(1) of the Act at the rate of 60% w.ef. 1-4-2017 that means from assessment year 2017-18 relevant to financial year 2016-17 rate of tax will be at sixty percent. In our view and as held by Hon'ble Kerala High Court, there was no new liability created and the rate of tax merely stood enhanced which is applicable to the assessment year 2017 - 18 The enhanced rate applies from the commencement of the assessment year 2017-18, which relates to previous financial year 2016- 17 as the case in the present assessee and not on the date of commencement of the amendment. The reasoning for the same is that the date of amendment on which an amendment comes into force is the date of the commencement of the amendment. It is read as amended from that date. Under the ordinary circumstances, and Act does not have retrospective operation on substantial rights which have become fixed before the date of the commencement of the Act. But, this rule is not unalterable. The legislature may affect substantial rights by enacting laws which are expressly retrospective or by using language which has that necessary result. And this language may give an enactment more retrospectivity than what the commencement clause gives to any of its provisions. When this happens the provisions thus made retrospective, expressly or by necessary intendment, operates from a date earlier than the date of commencement and affect rights which, but for such operation, would have continued undisturbed. This view has been held by Hon'ble Supreme court in the case of Ahmedabad Mfg. and Calico Printing Co. Ltd. v. S.G. Mehta, ITO (1963) 48 ITR 154.
10.3 Even Hon'ble Kerala High Court in the case of Bhagavathy Tea Estates Lid. v. State of Kerala[1990] 50 Taxman 180//1989] 179 ITR 508 (Ker.) held that the rate or rates prescribed by a Finance Act is or, subsequently, changed by passing a finance (amendment) Act having retrospective effect from the date from which the original Finance Act was passed or enforced. In such circumstances, the changed rate or rates of tax is or to be applied for the relevant Assessment Year.
10.4 As regard to another argument made by Ld. Counsel for the assessee by referring to the provisions of Section 294 of the Act, we after
8 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT going through the provision noted that it provided that if on the first date of April in any assessment year provision has not been made by a Central Act for the charging of income tax for that assessment year, this act shall nevertheless have effect until such provision is so made as if the provision in force in the preceding assessment year or the proviston proposed in the bill then before the Parliament, whichever is more favourable to the assessee, were actually in force. The scope of provision of Section 294 is that the tax is factually imposed not under the Income-tax Act but by the annual Finance Act, each year. The Income-tax Act provides a vehicle to give effect to the provisions of the Finance Act and Section 294 provides that
-if, in any assessment year,
-the Finance Act charging income-tax is not enacted by 1st April of that year, then, thus Income-tax Act shall nevertheless have effect until the Finance Act is passed,
-As if the Finance Act of the immediately preceding year was in force for that assessment yeur
- as if the provision in the Finance Bill for that year was duly passed into an Act,
Whichever of these two provisions is more advantageous to the assessee.
10.5 It means that the provisions of Section 294 of the Act are valid only upto the time of finance bill proposed for the assessment year is duly enacted into law. Hence the argument of Ld. Counsel invoking the provisions of Section 294 of the Act in the present case is without any logic.
Accordingly, we are of the view that in the instant case before us the provisions of Section 115BBE as amended by second amendment Act by the Taxation Laws (second amendment) Act, 2016 will apply w.e.f 1-4- 2017 on enhanced rate of tax @60% instead of (@30%. The enhanced rates applies from the commencement of the assessment year relevant to previous financial year. In this case, this applies to Financial Year 2016. 17 relevant to Assessment Year 2017-18. Hence, we find no force in the arguments of the Ld. Counsel and hence same are rejected. This issue is decided in favour of Revenue and against assessee.
In view of the above judgments it is held that enhanced rate of tax of 60% as per section 115BBE is applicable with effect from 01-04-2017 i.e.
9 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT assessment year 2017- 18. This ground of appeal of the appellant is hereby dismissed. 6. The last ground of appeal is that the appellant craves right to add, alter or amend any of the grounds of appeal. 6.1 The appellant has not added or altered any of the above mentioned grounds of appeal. Accordingly such mention by the appellant in its ground is treated as general in nature, not needing any specific adjudication and is accordingly treated as disposed off. 7. In the result, the appeal of the appellant is dismissed.”
As the appeal of the assessee was dismissed, the assessee filed the
present appeal against the finding of the ld. CIT(A) on the ground as
reproduced hereinabove. To support the ground so raised by the assessee
ld. AR of the assessee, has filed the written submissions and the same is
reproduced herein below:
Facts:- 1. A search u/s 132 of the Act was carried out on Gupta Group on 22.09.2017 of which assessee is one of the member. The assessee filed the original return of income on 31.10.2017 declaring the total income of Rs.3,04,540/- (PB 23). In response to notice u/s 153A assessee again filed return on 02.11.2018 declaring the same total income (PB 24-27). 2. The AO observed that assessee has made cash deposit of Rs.16,05,000/- in the bank account maintained with Punjab & Sindh bank during the period of demonetization i.e. between 10.11.2016 to 16.11.2016. For verification of the same assessee submitted copy of cash book and explained that the basic source of the same is out of sale consideration of Rs.30,13,500/- received on sale of agricultural land at Naharpur on 07.04.2015 (PB 28-31). The AO however held that in the absence of any relevant evidence the contention of the assessee is not acceptable more particularly when the cash is deposited in bank during demonetization period which is after a period of one and a half year from the date of sale of immovable property. Accordingly he
10 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT treated the source of such cash deposit as unexplained and made addition u/s 68 of the I.T Act.
During the appellate proceedings the Ld. CIT(A) call the remand report (PB 9-12) which is also reproduced at Page 7 to 10 of the order. In the remand report AO accepted that the cash book provided by the assessee is same as seized in course of search in the hard disk (PB 12-17). However he observed that copy of agreement of sale of agriculture land dt. 07.04.2015 is not found on record. The Ld. CIT(A) accordingly at Page 10 to 14 of the order held that the contention of the assessee that she is in the habit of maintaining large cash in hand and deposit of cash in the bank account was done only for the purpose of making the bank payments is not proved. Further it is fact on record that copy of sale deed of agriculture land dt. 07.04.2015 was not found placed on the assessment record. Therefore only because entries were found recorded in the cash book maintained on the computer before the search action took place does not make such entries fully genuine and hence explanation of the assessee that source of cash deposit during demonetization is the cash received from land sold by her almost 19 months before the date of deposit of cash in the bank account is not acceptable. Accordingly relying on the decision of Hon’ble Supreme Court in case of Sreelekha Banerjee Vs. CIT 49 ITR 112 the appeal of the assessee was dismissed.
Submission:-
There is no dispute as to the fact that assessee is regularly maintaining the cash book and the same was also found and seized during the course of search. As per the cash book the cash balance as on 31.10.2016 was Rs.16,25,348/- (PB 16) out of which cash of Rs.16,05,000/- was deposited in the bank account between 10.11.2016 to 16.11.2016. From the cash book it is evident that on 07.04.2015 assessee received Rs.30,13,500/- in cash on sale of agricultural land (PB 12). This amount remained with the assessee in cash and after considering the cash receipt, cash expenditure and Rs.2,50,000/- deposited in the bank account on 31.03.2016, the cash balance as on 31.03.2016 was Rs.28,28,348/- (PB 14). Out of it assessee further made cash deposit of Rs.13,00,000/- in the month of July 2016 (PB 15) and Rs.99,000/- in the month of October 2016 (PB 16) and after considering the cash receipt and cash expenditure, the cash balance on 31.10.2016 was Rs.16,25,348/-. The cash book has been accepted by the AO in all earlier assessment proceedings and no discrepancy was pointed out in such cash book. Thus the source of cash deposit in the bank account during the demonetization period is fully verifiable.
So far as consideration of Rs.30,13,500/- on sale of agriculture land on 07.04.2015 is concerned, AO has not disputed the same. In fact the sale agreement was found and seized at Page 111-115 of Exhibit 6. The assessee filed explanation about the same vide letter dt. 22.11.2019 filed on 05.12.2019 during the course of assessment proceedings for AY 2016-17. Copy of the letter
11 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT is enclosed. Thus it is incorrect on part of the lower authorities to assume that no documentary evidence of sale of agriculture land is available on record.
It is submitted that when source of cash deposit in the bank account during demonetization period is verifiable from the cash book, only because cash was deposited in the bank account after one and half year after the sale of agriculture land would not make such cash deposit as unexplained. Reliance in this connection is placed on the following cases:-
Muon Computing (P) Ltd. Vs. ITO ITA No. 7606/Del/2019 order dt. 04.08.2021 (Del.) (Trib.) (Case laws compilation PB 1-5) Para 9 of this decision is reproduced as under:-
"9. There is no dispute with regard to the fact that Revenue has not brought any material suggesting that the withdrawal made by the assessee were utilized for making payments. It is also not brought on record that the amounts so withdrawn from the bank account was utilized for any other undisclosed purposes. Further, it is noticed that learned CIT(A) observed that despite having sufficient cash in hand, the assessee withdraw the amount. It is correct that the assessee has withdrawn higher amounts than the immediate preceding years but that cannot be sole reason for making addition purely on the basis of suspicion. Further, I failed to understand the reasoning of the AO that the amount was withdrawn to justify the cash deposits during demonetization period i.e., between 9th Nov., 2016 to 30th Dec., 2016. It is also seen that the cash was withdrawn much prior to such event. So far observation regarding sharp increase in payable expenses is concerned, there is no finding by the AO that such expenses are bogus. Therefore, in my considered view, the addition has been made purely on the basis of suspicion. Such action of authorities below cannot be affirmed. I, therefore, direct the AO to delete the impugned addition. Thus, ground raised by the assessee in this appeal is allowed."
Nand Kumar Taneja & Anr. Vs. ITO (2019) 55 CCH 0705 (Del.) (Trib.) (Case laws compilation PB 6-9) Para 6 & 7 of this decision is reproduced as under:-
“6. Apart from that, the details of; opening cash, cash withdrawal, cash deposited, cash expenditure; closing cash in hand and increase cash in hand, in case of both the assessees were given before the authorities below, which has been incorporated above in para 3 and 3.1 No discrepancy or any inquiry has been done by Assessing Officer to disapprove the cash disclosed in the books of account and balance sheet. The sole reason for disbelieving the assessee’s explanation is that, firstly, no prudent person after withdrawing the cash will keep at home; and secondly, if there was an OD account having negative balance on which interest is being charged, then there was no need to keep such huge cash in hand at home. Such reasoning dehors any contrary material on record that the cash disclosed in the books of accounts has been invested somewhere else,
12 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT then on mere surmise assessee’s explanation cannot be discarded. If assessees have genuine sources of income which are received through banking channels, out of which cash has been withdrawn and have been disclosed in the income tax return and in the balance sheet as cash-in-hand, then I am unable to apprehend how the provision of section 69A is applicable. Because the section can only be invoked where in any financial year the assessee is found to be the owner of any money, etc., which has not been recorded in the books of accounts and assessee offers no explanation. Here in these cases, Assessee’s cash in hand duly stands recorded and source has been explained from the income deposited in the bank account and withdrawal, then in my opinion deeming provision of section 69A cannot be invoked. The reasoning given by the AO and Ld. CIT (A) is vague and based on surmise as to what a prudent person should have done. Once assessee has explained that being of senior citizen they have maintained such liquidity of cash out of their own disclosed income with them for certain contingencies, then without any material to controvert such an explanation, addition cannot be sustained. Assessees before the lower authorities have filed following documents to substantiate the cash in hand with them:-
a. Income Tax Return with computation of total income. b. Balance Sheets for FY 2013-14, 2014-15 and FY 2015-16. c. Comparative Chart of cash movement FY 2013-14, 2014-15 and FY 2015-16. d. Cash book maintained by the assessee. e. Kotak Mahindra Bank Statement bearing A/c No. 6311509485 f. Standard Chartered Bank: Statement of account. g. Bank: Book of Kotak Mahindra Bank. h. Bank Book of Standard Chartered Bank. i. Copy of all medical treatment documents.
All these documents have neither been rebutted nor there is any finding that cash-in-hand disclosed in the balance sheet was beyond the scope of their income or are not substantiated from the bank account. Simply because after the period of demonetization, that is, 08.11.2016, certain amount of cash has been deposited in the bank account, it does not mean that the cash-in-hand as on 31.3.2015 and 31.03.2016, duly shown in the balance sheet and disclosed to the department in the respective income tax return filed much earlier, is unexplained. Accordingly, in view of the above reasoning, addition made by the AO and sustained by the Ld. CIT (A) is directed to be deleted.”
Krishna Agarwal Vs. ITO (2021) 63 CCH 0048 (Jodh.) (Trib) (Case laws compilation PB 10-20) Para 14 of the decision is reproduced as under:-
“14. In this regard, it is noted that the assessee has explained that out of earlier year's cash withdrawals from her bank account which were available as cash balance as on 01/04/2016, the assessee had deposited a sum of Rs. 68,95,000/-
13 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT in her bank account during the year under consideration. It has been submitted that the assessee has sold a property, transferred in her name after the death of her husband, for a consideration of Rs 1,31,45,200/- during the financial year 2015-16 and the sale consideration has been received in installments during the financial year 2014-15 and financial 2015-16 directly in her bank account which has been subsequently withdrawn from time to time and due to non-fulfillment of purpose for which the cash was withdrawn, it was again re-deposited in the bank account during the year under consideration. In this regard, it is noted that the assessee in her return of income for A.Y 2016-17 has disclosed sale consideration on sale of plot of land for Rs 1,31,45,200/- and offered capital gains to tax. The plot has been sold through a registered deed and the valuation has been determined at Rs 1,31,45,200/- by the stamp duty authority. Thus, the sale consideration equivalent to stamp duty value has been duly disclosed by the assessee and there is no finding that the assessee has received any amount over and above the declared sale consideration. Therefore, given that the sale consideration has been received directly in the assessee's bank account, the source of cash withdrawals in the earlier two years has been clearly demonstrated by the assessee and we see no reason but to accept the said explanation which is clearly demonstrated through the sale documentation and tax filings by the assessee”.
Neeta Breja Vs. ITO ITA No. 524/Del/2017 order dt. 25.11.2019 (Del.) (Trib.) (Case laws compilation PB 21-24) The Hon’ble Bench at Para 12 of its order held as under:-
“12. In the present case also the learned assessing officer or the learned CIT A did not show that above cash was not available in the hands of the assessee or have been spent on any other purposes. Further the coordinate bench in ACIT vs Baldev Raj Charla 121 TTJ 366 (Delhi) also held that merely because there was a time gap between withdrawal of cash and cash deposits explanation of the assessee could not be rejected and addition on account of cash deposit could not be made particularly when there was no finding recorded by the assessing officer or the Commissioner that apart from depositing this cash into bank as explained by the assessee, there was any other purposes it is used by the assessee of these amounts. In view of above facts, the ground number 1 of the appeal of the assessee is allowed and orders of lower authorities are reversed.”
DCIT Vs. Veena Awasthi (2018) ITA No.215/LKW/2016 order dt. 30.11.2018 (Lucknow) (Trib.) (Case laws compilation PB 25-34) The Hon’ble ITAT AT Para 8 of its order held as under:-
“8. We have perused the case record and heard the rival contentions. We find that addition has been made by the Assessing Officer, as is evident from his order, on the ground that he has come to the conclusion that cash deposits were from some other source of income which is not disclosed to the Revenue. Assessing Officer nowhere in his order has brought out any material on record to
14 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT show that assessee is having any additional source of income other than that disclosed in the return nor Assessing Officer could spell out in his order that cash deposits made by the assessee was from some undisclosed source. All throughout Assessing Officer has raised suspicion on the behavioural pattern of frequent withdrawal and deposits by the assessee. There is no law in the country which prevents citizens to frequently withdraw and deposit his own money. Documentary evidences furnished before the Revenue clearly clarifies that on each occasion at the time of deposit in her bank account, assessee had sufficient availability of cash which is also not disputed by the Revenue. Entire transaction of withdrawals and deposits are duly reflected in the bank account of the assessee and are verifiable from relevant records. Assessing Officer himself admitted that assessee had sufficient cash balance on each occasion at the time of deposit in her bank account on different dates during the assessment year under consideration. We have also examined the order of ld. CIT(A) and we find that his decision is based on facts on record and is supported by adequate reasoning and, therefore, we do not want to interfere with the order of ld. CIT(A) and accordingly we uphold the findings of the ld. CIT(A) sustaining relief granted to the assessee.”
The Ld. CIT(A) has not correctly appreciated the explanation of the assessee that assessee is in the habit of keeping cash with her and cash is deposited in the bank on need basis. From the cash book it is evident that the assessee has kept cash in hand and from the bank statement enclosed it can be noted that assessee first made cash deposit of Rs.2,50,000/- on 31.03.2016 and thereafter Rs.13,00,000/- in July 2016 in Punjab & Sindh Bank account. Out of this amount Rs.2,15,000/- and Rs.13,00,000/- was transferred to Kotak Mahindra Bank account to pay the loan amount taken from the bank. Thus the observation made by Ld. CIT(A) on the explanation given by assessee is irrelevant. So far as the decision of Hon’ble Supreme Court in case of Sreelekha Banerjee is concerned, it held that if the explanation is unconvincing and one which deserves to be rejected then inference can be drawn that the amount represents income either from the sources already disclosed or from some undisclosed sources. In the present case the source of cash is as per the cash book and income from such cash book has been disclosed in the return. Hence the facts of this case are not applicable in the assessee’s case but the principal laid down in this decision supports the case of the assessee.
In view of above, addition confirmed by Ld. CIT(A) be deleted.
15 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT Ground No.2 The Ld. CIT(A), NFAC has erred on facts and in law in taxing the alleged unexplained cash deposit in the bank account u/s 115BBE @ 60% instead of taxing the same @ 30% by ignoring that section 115BBE substituted by Taxation Laws (Second Amendment Act), 2016 which received the assent of President on 15.12.2016 and made applicable from 01.04.2017 is not applicable to AY 2017- 18. Facts & Submission:- The lower authorities have taxed the alleged unexplained cash deposit in the bank account @ 60% u/s 115BBE. It is submitted that substituted section 115BBE by Taxation Laws (Second Amendment Act), 2016 received the assent of President on 15.12.2016. The section is made applicable w.e.f. 01.04.2017. Hon’ble ITAT, Jabalpur Bench in case of ACIT Vs. Sandesh Kumar Jain ITA 41/JAB/2020 order dt. 31.10.2022 at Para 4.2 of the order while interpreting the amendment made in section 115BBE which received the assent of President on 15.12.2016 held as under:- 4.2 As regards the assessee‟s second, without prejudice, argument, i.e., qua nonretrospectivity, we find considerable force therein. Section 1(2) of the Amending Act provides that save as otherwise provided therein, it shall come into force „at once‟. The same only conveys the intent for, except where a later date is specified, the legislation to take immediate effect, i.e., as soon the assent of the Hon'ble President of India is received, by signing the same. The words „at once‟ convey an urgency, so that the same represents the earliest point of time at which the same is to take effect, i.e., 15/12/2016 itself, and which also explains the same being enacted during the course of the fiscal year, tax rates for which stand already clarified at the beginning of the year per the relevant Finance Act (FA, 2016). The said words „at once‟ would loose significance if the provisions of the Act are to, as stated by the ld. CIT(A), be read as effective 01/04/2017, implying AY 2018-19. The same, for substantive amendments, as in the instant case, represents the first day of the assessment year, i.e., AY 2017-18, which explains the assessee’s grievance of it being thus effective for fy 2016-17 or, w.e.f. 01/4/2016. Enacting it mid-year and, further, making it applicable „at once‟, becomes meaningless if the same is to take effect retrospectively, or is made effective from a later date (01/4/2017), which could in that case be by Finance Act, 2017. True, the amendment, where so read, does gives rise to a peculiar situation inasmuch as two tax rates would obtain for the current year, i.e., one from 01/04/2016 to 14/12/2016, and another from 15/12/2016 to 31/03/2017, but, then, that is no reason to read retrospectivity where the applicable date is clear and, further, there is nothing to suggest retrospectivity. Further, extraordinary and supervening circumstance of the Demonetization Scheme, 2016, brought out by the Government of India in November, 2016, explains the urgency in bringing an amendment mid-year. Further, the tax rate being in respect of incomes which are imputed with reference to a transaction/s, it is possible to administer the same,
16 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT another aspect of the matter that stands considered by us. That is, a tax rate for transactions made up to 14/12/2016, and another for those thereafter. Subsequent mention of the applicability of the amended provisions of ss. 271AAB and 271AAC with reference to the date on which the Presidential assent to the Act is received, further corroborates this view, which is based on the clear language of the Amending Act, as well as the principle that a substantive amendment is to be generally prospective. We draw support from the decision in Vatika Township Pvt. Ltd. (supra), reiterating the settled law of the rule against retrospectivity. The tax rate applicable to the impugned income would, therefore, be at 30%, i.e., the rate specified in sec. 115BBE as on 30/11/2016, the date of the surrender of income per statement u/s133A (PB-1, pgs.35-44). This, it may be noted, is also consistent with our view that the income is liable to be assessed u/s. 69B (see para 4.1).
The Ld. CIT(A) has relied on the decision of Kerala High Court and ITAT Chennai Bench but in these cases the law as laid down by Jabalpur bench is not discussed. Hence, these decisions cannot be applied as such. In the present case also, the amount deposited in the bank account is prior to 15.12.2016 and therefore the decision of Jabalpur Bench is squarely applicable and therefore even if it is held that amount is taxable u/s 68 of the Act, tax rate applicable u/s 115BBE would be 30% and not 60%.”
To support the contention so raised in the written submission reliance
was placed on the following evidence / records / decisions:
Pg No. Filed before S. No. Particulars AO/ CIT(A) Copy of submission filed before Ld. CIT(A) 1-8 CIT(A) 1. Both 9-17 2. Copy of remand report dt. 09.10.2023 submitted by AO to Ld. CIT(A) 18 CIT(A) Copy of assessee's reply to Ld. CIT(A) in response to above remand 3. re ort 19-21 C1T(A) Copy of further submission dt. 20.06.2023 filed before Ld. CIT(A) along 4. with the copy of punchnama Copy of index of paper book filed before Ld. CIT(A) 22 CIT(A) 5. Copy of acknowledgment of return dt. 31.10.2017 filed u/s 139(1) of 23 Both 6. IT Act with Copy of acknowledgment of return dt. 02.11.2018 along 24-27 Both 7. computation of total income filed u/s 153A of IT Act Copy of agreement dt. 07.04.2015 for sale of agriculture land at 28-31 Both 8. Naharpur
17 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT 32-33 Both Copy of reply dt. 23.12.2019 filed during the course of assessment 9. proceedings
Case laws compilation index
S. No. Particulars Pg No. 1. Copy of decision of Hon’ble ITAT Delhi Bench in case of Muon 1-5 Computing (P) Ltd. Vs. ITO ITA No. 7606/Del/2019 order dt. 04.08.2021 2. Copy of decision of Hon’ble ITAT Delhi Bench in case of Nand Kumar 6-9 Taneja & Anr. Vs. ITO (2019) 55 CCH 0705 3. Copy of decision of Hon’ble ITAT Jodhpur Bench in case Krishna 10-20 Agarwal Vs. ITO (2021) 63 CCH 0048 4. Copy of decision of Hon’ble ITAT Delhi Bench in case of Neeta Breja Vs. 21-24 ITO ITA No. 524/Del/2017 order dt. 25.11.2019 5. Copy of decision of Hon’ble ITAT Lucknow Bench in case of DCIT Vs. 25-34 Veena Awasthi (2018) ITA No.215/LKW/2016 order dt. 30.11.2018
The ld. AR of the assessee in addition argued that source of cash
deposit is duly recorded in the cash book filed and the same is arising out of
the sale of land by the assessee in April 2015. The sale document is
already found during the course of search. The ld. AO made the addition
merely on the ground that the addition is made in the absence of evidence.
In the first appeal the assessee submitted all the related evidence and
thereby the remand report of the ld. AO was called for by the ld. CIT(A),
based on the cash book and sales deed filed by the assessee. The ld. AO
in the remand proceeding confirmed the correctness of the cash book filed
by the assessee with that of the seized records. Thus, when the copy of the
cash book where the deposit is source is duly found recorded even in the
18 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT document seized supports the contention about the source of the cash
deposited and therefore, the addition is not required to be made in the
hands of the assessee.
The ld DR is heard who relied on the findings of the lower authorities
and more particularly advanced the similar contentions as stated in the
order of the ld. CIT(A). As regards the contention of not considering the
remand report the ld. DR supported the finding recorded at page 10 of the
order of the ld. CIT(A) wherein ld. CIT(A) noted that there is no copy of sale
deed found at the time of search and therefore, the contention of the
assessee has rightly been rejected. Thus, the claim of the assessee based
on the decision discussed in the order of the ld. CIT(A) is not maintainable
and the finding of the ld. CIT(A) be sustained.
We have heard the rival contentions and perused the material placed
on record. Ground no. 1 raised by the assessee in this appeal is in relation
to the addition of cash deposited by the assessee as unexplained cash in
the hands of the assessee. During the period of demonetization on various
5 occasions the assessee deposited a sum of Rs. 16,05,000/. The ld. AO
noted in the assessment order that “The claim of the assessee that the
19 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT amount received from the sales of immovable property in April 2015 was
kept by her in her possession, that is for a period of one and a half years,
and was deposited into the bank during demonetization is, in the absence
of any relevant evidence, not acceptable.” Before the ld. CIT(A) the
assessee submitted all the relevant evidence showing the immediate
source being the sale deed of property and cash book. These additional
evidences were forwarded to the ld. AO for his comments. The ld. AO in
the remand proceeding noted as under:
“On the issue of copy of cash book provided by the assessee before your honour, it is hereby informed that this office has gone through the working copy of seized data in hard disc and printed out the relevant part of the cash book, as per the print out the same appears to be the copy of the cash book as provided with the above letter by your good office. The copy of printed cash book taken out from the seized data is enclosed herewith for ready reference and further verification.”
Since the revenue did not doubt the cash book filed which is also found at
the time search and there is no dispute about the correctness of the cash
book filed with that of the seized cash book. As regards the contention of
the ld. CIT(A) that sale deed was not available we found force in the
arguments of the ld. AR of the assessee though the same may be found
and matching with the records may not have been seized but the contention
of that cash is duly recorded in the seized cash book cannot be ignored.
20 ITA No. 45/JP/2024 Smt. Rajni Gupta vs. ACIT Thus, considering the fact that the assessee has sold the property in April,
2015 and the immediate source of the said cash is duly recorded in the
cash book the addition on account of the said cash deposited in the bank
account cannot be considered as unexplained. Thus, considering the set of
evidence and considering the various decision cited by the ld. AR of the
assessee we direct the ld. AO to delete the addition of Rs. 16,05,000/-
made in the hands of the assessee. Ground no. 2 being consequential in
nature the same is not adjudicated. Ground no. 3 & 4 having general does
not require our adjudication.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 04/06/2024.
Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur fnukad@Dated:- /06/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Smt. Rajni Gupta, Alwar izR;FkhZ@ The Respondent- ACIT, Central Circle, Alwar 2. vk;dj vk;qDr@ The ld CIT 3. 4. vk;dj vk;qDr¼vihy½@The ld CIT(A)
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