SIDDHARTHA DAS,BOLPUR vs. ITO, WARD-3(1), SURI

The Ld. D.R left the issue to the wisdom of the Bench.

After hearing the both the parties and reasons cited before us including the contents of Affidavit dated 23.02.2024, we are of the view that the delay has been bonafide and good reasons and accordingly the same is condoned by admitting the appeal for adjudication.

Issue raised in ground no. 1 is against the confirmation of addition of Rs. 7,83,000/- by the Ld. CIT(A) as made by the AO as unexplained money.

Facts in brief are that the assessee filed return of income on 02.03.2017 declaring total income of Rs. 3,34,330/-. The assessee is an employee of West Bengal Health Department and was deriving income by way of salary. The case of the assessee was selected for scrutiny for large cash deposits in savings bank account and also for the reason that the assessee has transferred one or more properties during the impugned assessment year. Accordingly statutory notices were issued and duly served on the assessee. The assessee complied with the said notices by filing various evidences explaining for the said cash deposits into the bank account. The AO on perusal of the replies filed by the assessee and the information gathered from the system and through notice issued u/s 133(6) to the third party that the assessee had deposited cash of Rs. 10,40,000/- in his SBI bank a/c no. 41502 during the impugned assessment year. He further noted that the assessee has deposited a sum of Rs. 9,72,000/- between November, 2015 to March 2016 whereas Rs. 1,89,000/- was withdrawn in Bank of India during the period November, 2015 to March, 2016. Accordingly, the assessee was asked to explain the source of Rs. 7,83,000/-. The assessee submitted before the AO that the Assessment Year: 2016-17 Siddhartha Das source of cash deposit was cash withdrawals from his salary bank a/c maintained with BOI as well as cash withdrawals by his father Shri Hriday Ratan Das from his Indian Bank a/c no. 65029 held jointly with the assessee and SBI a/c no. 44934. The assessee also furnished the relevant bank account statements. The reply of the assessee did not find favour with the AO and he added the difference of Rs. 7,83,000/- to the income of the assessee in the assessment framed.

In the appellate proceedings, the Ld. CIT(A) issued two notices of hearing fixing the date on 07.01.2021 and 21.07.2023 before passing the impugned order on 16.10.2023. Since the AR of the assessee failed to check the income tax portal on these dates and also that since no reply/evidences were filed before the AO, he passed the order ex-parte and sustained all the additions in the assessment order.

After hearing the rival contentions and perusing the material on record, we find that the cash deposits by the assessee of Rs. 7,83,000/- were out of cash withdrawals from his salary account maintained with BOI as well as cash withdrawals by his father from his Indian Bank a/c no. 65029 held jointly with the assessee and SBI A/c no. 44934. We have also examined the summary furnished before us qua the cash deposited and withdrawals made during the impugned assessment year and find that the assessee has withdrawn cash of Rs. 12,80,000/- and deposited a sum of Rs. 10,45,000/-. We note that the cash withdrawals of Rs. 5,67,500/- were sourced from his own funds of the assessee , being salary income. A sum of Rs. 2,62,500/- was received by the assessee from his father’s SBI A/c no. 44934. The source of this amount was pension and interest income of the assessee’s father. We further note that the balance sum of Rs. 4,50,000/- was received by the assessee from Indian Bank a/c no. 65029 held by his father jointly with the assessee. The source of this amount was out of the maturity of fixed deposit by the assessee’s father. Thus the assessee received Rs. 7,12,500/- (2,62,500/- + 4,50,000/-) as gift received from father as evidenced by an Affidavit which is available in the PB. We also note that the AO has not considered the cash withdrawals from the bank accounts of his father and these cash withdrawals from assessee father’s bank a/cs were deposited in the assessee’s bank a/c. Considering these facts on record, we are of Assessment Year: 2016-17 Siddhartha Das the view the amount of Rs. 7,83,000/- was fully explained and accordingly the same is deleted by setting aside the order of CIT(A) on this issue. Ground no 1 is allowed.

Issue raised in ground no.2 is against the confirmation of addition of Rs. 23,50,000/- by CIT(A) as made by the AO towards unexplained investments.

Facts in brief are that during the course of assessment proceedings, the AO noted that the assessee has made unexplained investment for purchase of property and accordingly added the sum of Rs. 23,50,000/-. The underlying facts are that the AO noted that the assessee has purchased a residential property at Mouza-Bolpur, Birbhum at a purchase consideration of Rs. 50,00,000/- . As per sale deed collected from D.S.R, Birbhum through notice u/s 133(6) of the Act, the assessee purchased the said property from Shri Gurudas Mitra. Accordingly, the AO issued show cause notice to the assessee on 17.12.2018 which was replied by the assessee on 21.12.2018 submitting therein that his father has given him the money from his Allahabad bank. The assessee stated that one payment to the builder was given from his account to Gurudas Mitra of Rs. 7,00,000/- vide cheque no. 700062 dated 25.02.2015 and second 16,50,000 vide cheque no. 700066 dated 13.05.2015 from his father account and both these amounts were gifts from father. It was also submitted Rs. 7,00,000/- was paid directly to the builder whereas Rs. 16,50,000/- was received again as gift on 14.05.2015 from his father from Indian Bank a/c no. 65029 which was joint a/c and source of money was FDR maturity. This amount was transferred to SBI house building loan a/c and then the bank issued Rs. 43,00,000/- in favour of the seller. The assessee’s reply did not find favour with the AO as per sale deed he observed that Shri Gurudas Mitra got the sale consideration vide a Draft no. 573158 dated 14.05.2015 of SBI Shantiniketan Branch of Rs. 43,00,000/- and further Rs. 7,00,000/- in cash and thus rejected the reply of the assessee. According to the submissions of the assessee , he received two cheques from his father but the AO rejected the contention and added the same to the income of the assessee u/s 69 of the Act.

After hearing the rival contentions and perusing the material on record, we note that Rs. 7,00,000/- has been paid directly by the assessee’s father to Shri Gurudas Mitra through cheque no.700062 dated 25.02.2015 issued from his bank account no. 65029 maintained with BOI as an advance but in the conveyance deed the document has wrongly been mentioned the same as paid in cash. We note that this is a mistake which has been inadvertently made by the document writer as apparent from the bank statement of Bank of India, account no. 65029 which showed a payment of Rs. 7,00,000/- was made to Shri Gurudas Mitra on 25.02.2015 through cheque no. 700062. We have also examined the Affidavit filed by Shri Gurudas Mitra in this regard confirming Rs. 7,00,000/- was received through cheque on 25.02.2015. So far as the remaining Rs. 43,00,000/- is concerned the same was paid by SBI out of house building loan sanctioned by the Bank as well as the money transferred by assessee into SBI house building account of Rs. 16,50,000/- . In other words the bank issued consolidated bank draft of Rs. 43,00,000/- on 14.05.2015 in favour of the assessee for purchase of residential property comprising Rs. 23,50,000/- bank loan and Rs. 16,50,000/- as gift from father. Considering these facts on record with documentary evidences filed before us, we set aside the order of Ld. CIT(A) and direct the AO to delete the addition. The ground no. 2 is allowed.

Issue raised in ground no. 3 is against the confirmation of addition of Rs. 14,00,000/- by the Ld. CIT(A) as made by the AO towards unexplained cash credit.

Facts in brief are that the AO during the course of assessment proceedings observed statement of SBI house building loan collected from SBI, Shantiniketan Branch through notice 133(6) that a payment of Rs. 14,00,000/- was made on 04.08.2015. Accordingly, the assessee was asked to furnish the source thereof by issuing notice u/s 142(1) dated 10.12.2018 which was not replied by the assessee and accordingly, this amount was added as unexplained cash credit.

After hearing the rival contentions and perusing the material on record including above statement before us, we note that Rs. 14,00,000/- was received by way of gift by the assessee from his father which was also submitted before the AO. We note that the assessee for the purpose of purchase of flat paid the said amount in the immediately preceding assessment year to M/s Debarpan Estates Pvt. Ltd. on 17.11.2014 which was paid from his father account no. 65029 maintained with joint Indian Bank which was received as gift and directly paid to the seller. However, due to some reasons, the deal did not materialize and the amount was refunded back to the assessee through cheque. The assessee deposited the cheque amounting to Rs. 14,00,000/- directly to the State Bank of India Home Loan Account No. 333319 on 04.08.2015 for one time payment of loan. Thus, Rs. 14,00,000/- was clearly received from M/s Debarpan Estates Pvt. Ltd. and certificate to the effect was also available in the PB. Considering these facts and circumstances with the evidences available before us , we are of the opinion that this amount of Rs. 14,00,000/- was fully explained . Accordingly ,we set aside the order of Ld. CIT(A) and direct the AO to delete the addition. Ground no. 3 is allowed. In the result, the appeal of the assessee is allowed. 17.