NIRMAL DEBNATH ,NADIA vs. ITO, WARD- 54(3), KOLKATA. , KOLKATA

The grounds of appeal taken by the assessee are not in consonance with Rule 8 of Income Tax Appellate Tribunal Rules. They are descriptive and argumentative in nature. The assessee has taken fourteen grounds of appeal, whereas his grievances revolve around a single issue, namely whether addition of Rs.17,50,000/- made by the ld. Assessing Office with the aid of Section 69A of the Income Tax Act on account of unexplained cash credit deserves to be sustained or not.

Brief facts of the case are that the assessee has filed his return of income declaring total income of Rs.2,96,150/-. This return of the assessee was selected for scrutiny assessment under CASS and a notice under section 143(2) was issued and served upon the assessee. The ld. Assessing Officer found that the assessee has made deposit a sum of Rs.8,00,000/- in Savings Bank Account with Allahabad Bank, Nabadwip Branch and a sum of Rs.9,95,000/- was deposited with Dearapara Sub Post Office. On perusal of the accounts, it revealed further that the deposits made in the Allahabad Bank was made in two instalments, namely Rs.2,50,000/- on 12.01.2016 and Rs.5,50,000/- on 13.11.2016. Similarly, Rs.9,95,000/- have been deposited in the Post Office in three instalments, namely Rs.9,74,500/- on 11.11.2016, Rs.500/- on 10.12.2016 and Rs.20,000/- on 10.11.2016. The ld. Assessing Officer sought explanation of the assessee about the source of such deposits. The assessee contended that he retired on 13.1.2.2015 (A.Y. 2017-2018) Nirmal Debnath and he received retirement benefits of Rs.23,38,863/-. The break- up of the retirement benefits was given as under:-

(a) Commuted Pension Rs.6,50,538/- (b) Gratuity Rs.6,00,000/- (c) Provident Fund Rs.5,31,265/- (d) Leave Encashment Rs.5,48,820/- (e) Group Insurance Benefit Rs. 8,240/- These amounts have been received on different dates and deposited on different dates in the Bank Account as well as with the Post Office. For example- the Gratuity amount was deposited on 07.01.2016 and P.F. & Leave Encashment was deposited on 16th April. In order to prove the deposits as well as withdrawal from the above Bank Account, the assessee has submitted the following documents:- (1) According to the submission of the assessee that he has withdrawn and held cash in hand, justification of withdrawal of cash cannot be understood. (2) When the assessee is maintaining three bank / post office accounts, then the reason for keeping huge money in hand is not understood. In this respect, your explanation regarding holding cash in hand not tenable. (3) Assessee unable to submit any cash flow statement. (4) Assessee never explained why he withdrew cash and why he hold the cash in hand. (5) Knowing the fact that keeping cash money in hand leads to loss of interest and also risk factor, the assesse kept a large amount of money in hand over the years without assigning any valid reason. (6) It is the onus of the assessee to prove with documentary evidence regarding whether he deposited (during demonetization period) the (A.Y. 2017-2018) Nirmal Debnath same money as he withdrawn earlier. Assessee fails to submit such documentary evidence. (7) It has not become clear when the assessee has hold the cash amount of Rs. 17,95,000/- in old notes, for which reason he deposited his holding money in different a/c in different dates.

The ld. Assessing Officer disbelieved the stand of assessee simply for the reason that the assessee could not explain why he withdrew cash and why he holds the cash in hand, which was redeposited in the Bank Account. The rest of the reasons given by the ld. Assessing Officer are as under:- (1) According to submission of the assessee that he has withdrawn and hold the cash in hand, justification of withdrawal of cash cannot be understood. (2) When the assessee is maintaining three bank/post office accounts, then the reason for keeping huge money in hand is not understood. In this respect your explanation regarding holding cash in hand not tenable. (3) Assessee unable to submit any cash flow statement. (4) Assessee never explain why he withdrawn cash and why he hold the cash in hand. (5) Knowing the fact that keeping cash money in hand leads to loss of interest and also risk factor, the assessee kept a large amount of money in hand over the years without assigning any valid reason. (6) It is the onus of the assessee to prove with documentary evidence regarding whether he deposited (during demonetization period) the same money as he withdrawal earlier. Assessee fails to submit such documentary evidence. (7)It has not become clear when the assessee has hold the cash amount of Rs.17,95,000/-in old notes, for which reason he deposited his holding money in different a/c in different dates. (A.Y. 2017-2018) Nirmal Debnath 5. On the strength of the above reasons, ld. Assessing Officer has made the addition of Rs.17,95,000/- under Section 69A of the Income Tax Act.

Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee.

With the assistance of ld. Representatives, we have gone through the record carefully. A perusal of section 69A would indicate that this section contemplates that where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion…..etc. is not in the opinion of the Assessing Officer, satisfactory, the money, bullion, ……may be deemed to the income of the assessee of such financial year. There is no doubt that a sum of Rs.17,95,000/- was found to be deposited in the Bank account of the assessee. In order to explain the source of such deposits, he has submitted that he has received Rs.23,38,863/- as retirement benefit and such benefit has been received by him from the month of January, 2016 to April, 2016. The details of such deposits in the Bank Account were given to the ld. Assessing Officer. The assessee thereafter withdrew the amounts from these accounts and redeposited it. The only reason assigned by the ld. Assessing Officer is that the assessee failed to establish as to why he withdrew the amounts from the Bank. (A.Y. 2017-2018) Nirmal Debnath According to him, the assessee is having Bank Account and Post Office, then why he withdrew and kept the money in hands. To our mind, the circumstances/reasoning narrated by the ld. Assessing Officer are not conclusive. There is no bar for withdrawing the money and keeping in cash in hand with the assessee. The assessee is a retired person and does not require to maintain cash flow, which has been expected by the ld. Assessing Officer. All the reasonings given by the ld. Assessing Officer are superficial in nature for disbelieving the claim of the assessee. It is very difficult to keep demonstrative proof of routine daily affairs. There might be some circumstance for making withdrawn and when assessee was not required the money, he redeposited it. It cannot be such an offence that the addition of Rs.17,95,000/- be made in the hands of the assessee as unexplained money. The ld. Assessing Officer was not able to lay his hand on any other circumstances, which can suggest that assessee might have earned the income during this period. The ld. Assessing Officer has unnecessarily dragged the assessee into litigation. The ld. CIT(Appeals) further failed to appreciate the true circumstances of the case in hand. The addition made by the ld. Assessing Officer is not sustainable. Accordingly, we allow the appeal of the assessee and delete the addition.