UDDARAJU ROHINI,VISAKHAPATNAM vs. INCOME TAX OFFICER, WARD-3(1), VISAKHAPATNAM
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Income Tax Appellate Tribunal, VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE
PER DUVVURU RL REDDY, Judicial Member :
This appeal filed by the assessee is against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld. CIT(A)-NFAC”] in DIN & Order No. ITBA/NFAC/S/250/2023-24/1061031575(1), dated 16/02/2024 arising out of the order passed U/s. 144 of the Income Tax Act, 1961 [“the Act”] for the AY 2017-18.
2 2. Briefly stated the facts of the case are that the assessee is an individual. As per the information available with the Department, the Ld. AO noticed that the assessee made cash deposits of Rs. 13,07,500/- in the bank accounts of the assessee during the demonetization period. Accordingly, a notice U/s. 142(1) of the Act was issued on 13/02/2018 calling for the assessee to file the return of income for the AY 2017-18 on or before 31/3/2018. But the assessee failed to furnish the return for the AY 2017-18 either U/s. 139 or in response to the notice issued under section 142(1) of the Act. Since the assessee has not filed her return of income and in the absence of any compliance to the notices issued, the Ld. AO initiated the proceedings U/s. 144 of the Act. Accordingly, notice U/s. 142(1) of the Act was issued and the assessee was asked to furnish certain information and explanation with respect to the sources for the cash deposits. In response, the assessee filed information from time to time electronically. After verification of the information filed by the assessee, as well as the information obtained from bank authorities U/s. 133(6) of the Act and also based on the information available with the Department, the Ld. AO proceeded to complete the assessment. During the assessment proceedings, the assessee vide her letter dated
3 17/09/2019 stated about the sources for cash deposits made into the assessee’s bank accounts and submitted that the amounts deposited during the post demonetization were made out of the withdrawals from the same bank account and rental income of the assessee. After considering the submissions of the assessee, the Ld.AO issued a show cause notice on 25/09/2019 requiring the assessee to file documentary evidence in support of her explanation in respect of sources for the said cash deposits. In response, the assessee furnished confirmation letter from her husband who confirmed that he has received the amount from his wife and repaid the money to his wife before date of demonetization. However, the Ld. AO did not consider the submission and the explanations given by the assessee and considered the cash deposits of Rs. 13,07,500/- made during the course of demonetization period in the FY 2016-17 in SBNs as unexplained money of the assessee and added the same U/s. 69A r.w.s U/s. 115BBE of the Act. Thus, the Ld. AO determined the assessed income at Rs. 13,07,000/- and passed the assessment order U/s. 144 of the Act dated 16/12/2019. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A)-NFAC.
4 3. On appeal, after considering the submissions of the assessee, the Ld. CIT(A)-NFAC dismissed the assessee’s appeal and confirmed the addition made by the Ld. AO U/s. 69A r.w.s 115BBE of the Act. Aggrieved by the order of the Ld. CIT(A)- NFAC, the assessee is in appeal before the Tribunal by raising the following grounds of appeal: “1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A) is not justified in sustaining the addition of Rs. 13,07,500/- made by the Assessing Officer U/s. 69A of the Act towards unexplained cash deposits during demonetization period. 3. Any other ground that may be urged at the time of appeal.”
At the outset, the Ld. Authorized Representative submitted that the assessee has withdrawn the amount of Rs. 13 laksh on 21/09/2016 and on 10/10/2016 an amount of Rs. 2,50,000/- for the purpose of commencing construction work to the assessee’s existing building at Rayalam, West Godavari District. But, due to heavy rains, the assessee could not complete the construction work and in the meanwhile, demonetization of currency notes was announced. Due to these reasons, the assessee deposited the amount of Rs. 9,90,000/- on 12/11/2016 and Rs. 2,55,000/- on 16/11/2016. However, the Ld. AO made an addition of Rs. 13,07,500/- U/s. 69A r.w.s 115BBE of the Act without
5 considering the submissions of the assessee. On appeal, the Ld. CIT(A)-NFAC also did not consider the assessee’s submissions and confirmed the addition made by the Ld. AO. The Ld. AR pleaded to set-aside the orders of the Ld. Revenue Authorities and grant relief to the assessee.
On the other hand, the Ld. Departmental Representative submitted that the assessee has not produced any documentary evidence for the disputed cash deposits of Rs. 13,07,500/- before the Ld. Revenue Authorities and therefore the decision taken by the Ld. AO and the Ld. CIT(A)-NFAC cannot be faulted with. The Ld. DR pleaded to uphold the orders of the Ld. Revenue Authorities.
I have heard both the sides and perused the orders of the Ld. Revenue Authorities as well as the material available on record. It is an undisputed fact that the assessee has withdrawn the amounts of Rs. 13 laksh on 21/09/2016 and Rs. 2,50,000/- on 10/10/2016. The main contention of the assessee is that due to heavy rains the assessee was not able to complete the construction work and therefore due to the announcement of the demonetization, the assessee deposited the cash withdrawals in her bank account. Considering the facts and circumstances of
6 the case as well as on careful perusal of the bank statements and the material placed before the Bench, I find merit in the argument of the Ld. AR that the assessee has withdrawn the money for the purpose of construction work and deposited the same due to demonetization of the currency. Accordingly, I am of the considered view that the sources for the cash deposits are properly explained and hence the grounds raised by the assessee are allowed. The Ld.AO is directed to delete the addition made U/s. 69A r.w.s 115BBE of the Act. It is ordered accordingly.
In the result, appeal of the assessee is allowed.
Pronounced in the open Court on 25th September, 2024.
Sd/- (दु�वू� आर.एल रे�ी) (DUVVURU RL REDDY) �याियकसद�य/JUDICIAL MEMBER Dated :25/09/2024 OKK - SPS आदेश की �ितिलिप अ�ेिषत /Copy of the order forwarded to:- 1. िनधा�रती/ The Assessee – Uddaraju Rohini, D.No. 50-1-50, ASR Nagar, Seethammadhara, Visakhapatnam, Andhra Pradesh – 530015. 2. राज�व/The Revenue – Income Tax Officer, Ward-3(1), Infinity Towers, Sankaramatham Raod, Visakhapatnam, Andhra Pradesh – 530016. 3. The Principal Commissioner of Income Tax, 4.आयकर आयु� (अपील)/ The Commissioner of Income Tax (Appeals),
7 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, िवशाखापटणम/ DR, ITAT, Visakhapatnam 6.गाड� फ़ाईल / Guard file आदेशानुसार / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam
