SWAPNA R. SAWANT,MUMBAI vs. ITO 18(2)(2), MUMBAI

PDF · subscribers
ITA 4194/MUM/2014Status: DisposedITAT Mumbai25 January 2017AY 2009-103 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed credit for an additional Rs. 4,50,000 representing opening cash balance from a property sale advance. The matter was restored to the Assessing Officer for recalculation.

What were the facts?

The Assessing Officer treated a sum of Rs. 19,80,600 deposited in the assessee's bank account as unexplained. The CIT(A) confirmed an addition of Rs. 8,55,600 after allowing credit for Rs. 11,25,000.

What were the issues?

Whether the assessee's claim for opening cash balance as a source for bank deposits is acceptable despite a time gap from the receipt of advance.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” Bench, Mumbai

Before: Shri B.R. Baskaran (AM)& Shri Pawan Singh (JM)

For Appellant: Shri Kirit Sanghvi
For Respondent: Shri Akhilendra Yadav
Hearing: 25.1.2017Pronounced: 25.1.2017

O R D E R Per B.R. Baskaran (AM) :-

The appeal filed by the assessee is directed against the order dated 19.3.2014 passed by the learned CIT(A)-29, Mumbai and it relates to A.Y. 2009-10.

2.

The assessee is aggrieved by the decision of the learned CIT(A) in partially confirming the addition made by the Assessing Officer towards unexplained deposit made into the bank account.

3.

We have heard the parties and perused the record. The Assessing Officer received AIR information to the effect that the assessee has deposited a sum of ` 19,80,600/- in aggregate in the savings bank account maintained with M/s. Sarawat Cooperative Bank. The Assessing Officer assessed the entire amount of deposits as unexplained money u/s. 69A of the Act.

2 Ms. Swapna R. Sawant

4.

In the appellate proceedings, the learned CIT(A) accepted the sources to the extent of ` 11,25,000/- and accordingly directed the Assessing Officer to sustain the addition to the extent of ` 8,55,600/-. Still aggrieved, the assessee has filed this appeal before us.

5.

Learned AR appearing for the assessee submitted that the assessee has explained sources of deposits to be the withdrawals made on earlier occasions to the tune of ` 4,05,600/- and also the opening cash balance of ` 4,50,000/-. Learned AR submitted that he is accepting the addition sustained by the learned CIT(A) to the extent of ` 4,05,600/-. He submitted that the assessee should be given credit for opening balance of ` 4,50,000/- for the reason that the assessee has entered an agreement for sale of property on 18.10.2007 and as per the agreement, the assessee has received ` 7,00,000/- by way of cash and ` 6,00,000/- by way of cheque. The opening balance of ` 4.5 lakhs was kept out of the sale advance of ` 7,00,000/- received by way of cash.

6.

On the contrary, learned Departmental Representative submitted that the assessee had made similar claim before the learned CIT(A) but the learned CIT(A) rejected the same on the reason that there is a gap of about ten months between the date of receipt of advance money and year end date.

7.

We have noticed that the assessee has engaged in the business of running coaching classes. In the books of account maintained by her, the impugned Savings bank account was not accounted, meaning thereby the assessee has maintained this bank account in respect of her personal transactions. Hence deposits made into bank accounts did not find place in the books of account maintained by the assessee. We noticed that the assessee has explained sources of deposits made into bank account to be withdrawals made on earlier occasions and the same has been accepted by the learned CIT(A) partially. However, the claim of opening cash balance of ` 4.5 lakhs was not accepted, only for the reason that there is a time gap of ten months between the date of receipt of sale advance against sale of the property

3 Ms. Swapna R. Sawant year end date. The fact that the assessee entered into a sale agreement for sale of property and the fact that the assessee received cash of ` 7 lakhs as advance are not disputed by the tax authorities. The assessee has also placed a copy of sale agreement in the paper book. Against the receipt of cash of ` 7 lakhs received as advance, the assessee is claiming credit for ` 4.50 lakhs only. Considering the activity carried out by the assessee and considering her status, we are of the view that there is no reason to suspect the claim of availability of opening cash balance of ` 4.50 lakhs, more particularly when there is no material available on record to show that the assessee has spent away the entire advance amount of ` 7 lakhs received by her. Under these set of facts, we are of the view that the assessee may be given credit for ` 4.50 lakhs. Accordingly, we modify the order passed by the learned CIT(A) on this issue and restore the same to the file of the Assessing Officer with the direction to give credit for further amount of ` 4.50 lakhs over and above relief given by the learned CIT(A).

8.

In the result, appeal filed by the assessee is partly allowed.

Order has been pronounced in the Court on 25.1.2017.

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Recent GST High Court judgments

Search GST case law →