LATA NARESH KURUWA,MUMBAI vs. ITO 13(3)(2), MUMBAI

This appeal by the assessee is directed against order of Ld.CIT- A, dated 09.02.2016 and pertains to assessment year 2010-11. 2. The grounds of appeal read as under: i) The Ld. CIT-A [hereinafter referred to as “Ld. CIT-A] erred in uploading the order of the Ld. AO for treating an amount of Rs.19,50,000/- as unexplained cash credit u/s 69 of the Income Tax Lata Naresh Kuruwa ITA no.4921/Mum./2014 Act, 1961 as Business Income and Taxed accordingly without appreciating the facts and circumstances of the case. ii) The Appellant craves leave to add, alter rescind or amend any of the above grounds of appeal.

3. Brief facts of the case are as under: Assessee had filed her return of income declaring total income of Rs.2,76,452/- on 31/3/2001 and the same was processed u/s 143(1) of I.T. Act, 1961. Case was selected for scrutiny and notices issued by the Assessing Officer. Assessee's CA attended the office on behalf of the assessee before the Assessing Officer and flied details. Assessee had shown interest receipts of Rs. 2,97,271/- from five parties and after claiming deduction of Rs. 20,819/-, arrived at total income of Rs. 2,76,452/-. It was observed by the Assessing Officer from the ITS details of the department that the assessee had deposited a sum of Rs.19,50,000/- during financial year relevant to A.Y. 2010-11 in her bank account with Arihant Coop Bank, Mulund West Branch and the same was confirmed by the statement received from the bank. Assessee was given three opportunities by the Assessing Officer, however, assessee did not respond to any of the notices. Thereafter, Assessing Officer issued 133(6) notices to the eight parties to whom loans totaling Rs.19,50,000/- were given and they have all confirmed tie receipt of loans by cheque from the assessee. It was also noticed by the assessee that all the eight parties operated from the same premises at Mulund and they were all inter connected with one another as directors/ partners/proprietors. Assessee did not receive any 2 Lata Naresh Kuruwa ITA no.4921/Mum./2014 interest from any of these parties on loans given by her and these loans were given to the concerned party by cheque immediately after depositing cash in the savings account with the bank. Assessing Officer treated the amount as unexplained cash credit and taxed the same u/s 68 of I.T. Act, 1961. Assessee is in appeal against the same.

4. Up on assessee’s appeal Ld. CIT noted that assessee has not filling any explanation and/or details and documents. The Ld. CIT held as under; I have considered the facts of the case and the submissions made by the assessee. Prima fade it appears from the assessment order that the assessee deposited cash totaling Rs.19,50,000/- in her savings account with Arihant Co-op. Bank, Mulund, Mumbai from time to time and immediately issued cheques of equivalent amounts in favour of various parties from time to time. All the eight parties operate from the same premises at Mulund and have confirmed the receipts of these loans from the assessee. Assessee and her authorised representatives were given several opportunities by the Assessing Officer and assessee has been given three opportunities in the appellate Proceedings, however, neither the assessee nor the CA has availed of the opportunity to file explanation for the cash deposits in the account. Therefore, it is presumed that neither the assessee nor her son who has written two letters has anything to say in the matter and therefore the appeal is decided on merits of the case. First of all, assessee does not seem to have any explanation because there are total cash deposits of Rs.19,50,0001/- in the account made during the financial year for which she has no explanation to offer because she has Lata Naresh Kuruwa ITA no.4921/Mum./2014 nothing to explain about the source of these cash deposits. Keeping in view her return of income, she may have had at the most Rs.5,000/- Rs.10,000/- in cash on hand which might have accumulated over a period of time, but not a sum of Rs.19,50,000/- which is deposited in instalments and transferred immediately by cheque to a group of individuals/firms/companies operating from the same address in Mulund. The probability of the funds in cash having come from the eight parties to whom interest free loans and advances have been given also cannot be ruled out because the funds have been immediately transferred by cheques to these eight parties. However, the fact remains that the cash credits totalling Rs. 19,50,000/- appear in the savings bank account of the assessee with Arihant Co-op. Bank, Mulund and, therefore, the same is taxable as unexplained cash credits under section 69 of I. T. Act, 1961 in the hands of the assessee only. Therefore, the addition of Rs.19,50,000/- made by the Assessing Officer is upheld in principle under section 69 of I.T. Act, 1961- Assessee's appeal is rejected in facts and in law. Assessing Officer is directed to forward a copy of assessment order as well as copy of this appeal order to all the Assessing Officers assessing the eight entities to whom assessee had given loans for taking follow up action to bring to tax the loan amounts in their hands since the probability of the cash having come from them cannot be ruled out in circumstances of the case.

In the result this appeal filed by the assessee stands dismissed.