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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
This appeal by the assesse is directed against the order dated 19.12.2023 of Commissioner of Income Tax-Appeals (National Faceless Appeals Centre), Coimbatore for A.Y.2013-14.
The assessee has raised following grounds of appeal:
Rameshwar Patidar “1. Ground 1. That in the facts and circumstances of the case the Learned CIT Appeals has upheld the addition of Rs. 10,00,000/- made by the Learned Assessing Officer as unexplained investment under section 69 of the Income Tax Act, 1961 which is bad in law and erroneous. 2. That in the fact & Circumstances of the case the Learned CIT Appeals has upheld the addition of Rs. 79,102/- made by the Learned Assessing Officer which is bad in law and unwarranted”.
Ground No.1 is regarding the addition sustained by the CIT(A) of Rs.10,00,000/- on account of unexplained cash deposited in the bank account of the assessee treated as unexplained investment u/s 69 of the Act. The assessee is engaged in the of business of trading of sanitary and hardware items under the name and style M/s Shivkripa Traders. The assessee filed his return of income declaring income u/s 44AD of the Act at Rs.1,98,410/-. During the assessment proceedings the A.O noted that the assessee has deposited cash of Rs.50,00,000/- in the saving bank account and asked the assessee to explain the source of the deposit. In reply the assessee explained the source of deposit in the saving bank account as advance receipt of sale proceeds of land belonging to his wife as well as withdrawals from the bank. The A.O has accepted the source of deposit to the extent of Rs.40,00,000/- and the balance of Rs.10,00,000/- is added to the total income of the Rameshwar Patidar assessee as unexplained investment u/s 69 of the Act. The assessee challenged the action of the A.O before CIT(A) but could not succeed.
Before the Tribunal the Ld. AR of the assessee submitted that the assessee has produced all the relevant details and supporting evidences before the CIT(A) which also includes the additional evidence comprising of sale agreement executed by the wife of the assessee of agriculture land, bank account statement, profit and loss account and cash flow statement of the assessee as well as the affidavit of the assessee retracting the earlier letter of surrender filed before the A.O. The CIT(A) did not accept the cash flow statement filed by the assessee and particularly the amount received from his wife as well as on account of sale of agriculture land for want of supporting evidence and consequently the addition made by the A.O was confirmed. The Ld. AR has stated at bar that the assessee is ready to remove the shortcomings if any in the supporting evidence already filed by the assessee and therefore the assessee would file all the relevant supporting evidence in support of the claim. He has thus prayed that the matter may be remanded Rameshwar Patidar to the record of the A.O for fresh adjudication after verification and examination of the supporting evidence to be filed by the assessee.
On the other hand Ld. DR has relied upon the orders of the authorities below and submitted that though the assessee has already been given more than sufficient opportunities however, he has no objection if the matter is remanded to the record of the A.O for fresh adjudication.
We have considered rival submissions as well as the relevant material on record. The A.O has made the addition of Rs.10,00,000/- on the basis that the assessee has surrendered this amount vide letter dated 16.03.2016 which was challenged by the assessee and also filed an affidavit to retract the said surrender in misunderstanding. The assessee also filed additional evidence before CIT(A) to explain the source of Rs.10,00,000/- as deposited in the saving bank account however, CIT(A) in para 5.4 & 5.6 has confirmed the addition as under:
“5.4 According to the appellant the sale agreement is additional evidence filed. The sale agreement is dated 28-07-2012 and the agreement mentions Rs 1 crores is paid. The appellant has deposited Rs 50 lakhs on 30-07-2012 and before AO has claimed that 40 lakhs is from sale of land. This is allowed by AO and this is not new evidence. The evidence is admitted and considered by AO. The reason for the appellant claiming Rs 40 lakhs as source from sale of land is self-explanatory and the balance may be deposited in wife's account. The second additional evidence filed Rameshwar Patidar is a cash flow for the previous year FY 2011-12. In this statement the appellant has claimed a receipt of Rs 9,491,500 from Pramila Patidar his wife and another receipt of Rs 4,500,000 as Received share of Pramila on sale of agricultural land. The appellant has not filed any supporting evidence other than this claim. The appellant is filing piecemeal evidence and is not filing the bank account copy of Pramila Patidar his wife. The only supporting evidence is own affidavit. The appellant is regularly depositing cash in bank and withdrawing it when needed. The claim of cash in hand is not proved and is not supported by any evidence.
5.6 The appellant has filed the copy of the letter filed before the AO. The letter is written by the appellant in his own hand writing and signed. This cannot be done with coercion. According to the appellant the family has purchased and sold land in last year and in this year has gain sold land. The appellant claims that he is an agriculturist and all are agricultural land. But the so-called cash flow statement now filed does not contain any agricultural income or expense and does not even contain any personal expenses for FY 11-12 and Rs 134,538.00 only for FY 12-13 The additional evidence filed are only certain vague claims to suit the situation and to explain cash deposited. The appellant has admitted and agreed for the addition before the AO and has not produced any evidence to rebut it. The grounds raised against the addition of Rs 10 lakhs u/s 69 are dismissed”.
6.1 Thus, CIT(A) has pointed out that the assessee has filed the cash flow statement with vague claims without producing any supporting evidence. Now the Ld. AR of the assessee has stated at bar that the assessee would remove the shortcomings of the supporting evidence by filing all the relevant evidences to explain the source of deposit. Accordingly in the facts and circumstances of the case when the CIT(A) has confirmed the addition for want of supporting evidence which is also stated in para 5.4 as well as 5.6 of the impugned order then in the interest of justice the assessee is evidences to explain the source of deposit of Rs.10,00,000/- in the saving bank account of the assessee. Accordingly the impugned order of the CIT(A) for this issue is set aside and the matter is remanded to the record of A.O for fresh adjudication after verification and examination of the supporting evidences to be filed by the assessee.
Ground No.2 is regarding addition of Rs.79,102/- on account of interest income. The assessee has declared income u/s 44AD of the Act and claimed that the interest income of Rs.79,102/- is also part of the business income of the assessee declared u/s 44AD of the Act. The A.O did not accepted this claim of the assessee and made the addition of the interest and miscellaneous income at Rs.79,102/- by treating the same as income from other sources.
On appeal the CIT(A) has upheld the addition made by the A.O.
Before the Tribunal Ld. AR of the assessee has submitted that the assessee has also filed the profit and loss account showing the total income of the assessee including the interest income in question and therefore, the income declared by the assessee is much more than the presumptive income u/s 44AD of the Act @8% is comprising of the interest from saving bank account as well as other income amounting to Rs.79,102/-. Thus the Ld. AR has submitted that when the assessee has declared the income which is more than 8% of the turnover of the assessee as per the provisions of Section 44AD of the Act plus the interest income and miscellaneous income of Rs.79,102/- then a separate addition is highly arbitratory and unjustified.
On the other hand Ld. DR has relied upon the orders of the authorities below.
We have considered the rival submissions and relevant materials on record. We note that the assessee has declared total income of Rs.1,98,410/- u/s 44AD of the I.T. Act which was not disturbed by the A.O while passing the assessment order. The turnover of the assessee is also not questioned by the A.O and therefore, 8% of the turnover of Rs.11,08,629/- comes to Rs.88,690/- whereas the assessee has declared the total income of Rs.1,98,410/- which is much more than the 8% of the turnover (+)
Rs.79,710/-. Accordingly in view of the fact that the assessee has already declared the income which is more than the presumptive miscellaneous income of Rs.79,102/- then no further addition on account of interest income is called for. Hence the addition made by the A.O at Rs.79,102/- is deleted.
The appeal of the assessee is partly allowed for statistical purpose.
Order is pronounced in the open court on 18.10.2024.