SOBHA DEVI DILIPKUMAR,VIJAYAWADA vs. INCOME TAX OFFICER, WARD-2(1), VIJAYAWADA
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Income Tax Appellate Tribunal, VISAKHAPATNAM 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 Ld. CIT(A)-NFAC, Delhi in DIN & Order No. ITBA/NFAC/S/250/2022-23/1049442170(1), dated 6/2/2023 arising out of the order passed U/s. 143(3) 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 filed her return of income for the AY 2017-18
electronically on 1/2/2018 admitting a total income of Rs.
7,84,640/-. The return was processed U/s. 143(1) of the Act.
Later on, the case was selected for ‘limited scrutiny’ under CASS
for the reason to verify ‘cash deposits during the demonetization
period’. Thereafter, notice U/s. 143(2) of the Act was issued on
17/08/2018 and the same was served on the assessee through
email. Notice U/s. 142(1) of the Act was issued on various dates
calling for certain information through email and in reply, the
assessee furnished the information called for. On perusal of the
submissions made by the assessee, it was noted by the Ld. AO
that the assessee has deposited an amount of Rs. 29,75,000/- in
Lakshmi Vilas Bank during the demonetization period on various
dates. On being asked, the assessee explained that the said cash
deposits are out of the realization of advances of Rs. 23,03,474/-
as well as advance receipts of Rs. 4,50,000/-. But the Ld. AO did
not accept the explanation given by the assessee. Further, the
Ld. AO observed that as per the books of account of the assessee
which was furnished during the assessment proceedings, the
closing cash balance as on 09/11/2016 was Rs. 23,26,440/-.
Therefore, the Ld. AO opined that the made the assessee ought to
3 have deposited the said amount of cash atleast before
20/11/2016 as they are in the form of SBNs. However, the Ld.
AO considered the cash deposit of Rs. 2,25,000/- as explained
and the other cash deposits aggregating to Rs. 27,50,000/- were
treated as unexplained money in the hands of the assessee as per
the provisions of section 69A of the Act and brought to tax U/s.
115BBE of the Act. Thus, the Ld. AO completed the assessment
U/s. 143(3) of the Act and determined the total income at Rs.
35,34,640/-. Aggrieved by the order of the Ld. AO, the assessee
preferred an appeal before the Ld. CIT(A)-NFAC.
On appeal, the Ld. CIT(A)-NFAC, dismissed the appeal of the
assessee by holding that the availability of so called cash balance
in the books of account is only evidence on paper and the said
amount must have been utilized for some other purposes which
are not brought on record (para 6.6 of the CIT(A)’s order).
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)-NFAC is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A)-NFAC is not justified in sustaining the addition of Rs. 27,50,000/- made by the Assessing
4 Officer U/s. 69A of the Act towards unexplained cash deposits in the bank account. 3. Any other grounds may be urged at the time of hearing.”
At the outset, the Ld. Authorized Representative submitted
that the assessee being involved in money lending business, on
the monies lent, the assessee has received an amount of Rs.
3,63,609/- as interest income and the principal amount was
given as loan during the previous year relevant to the assessment
year 2017-18 to various persons and the same fact was recorded
in the books of account which has been furnished before the Ld.
Revenue Authorities. However, the assessee made cash deposits
during the demonetization period and therefore the Ld. AO
treated the amount of cash deposits as unexplained money U/s.
69A of the Act. The Ld. AR further submitted that the assessee
has disclosed the investments in the books of accounts and the
computation of income which was offered for taxation and
therefore the question of invoking the provisions of section 69A
does not arise. The Ld. AR relied on the decision of this Bench of
the Tribunal in the case of ITO vs. Sri Tatiparti Satyanarayana in
ITA No. 76/Viz/2021, dated 16/03/2023 to state that when the
investments are disclosed by the assessee in the books of
5 accounts, there is no application of the provisions of section 69A
of the Act. The Ld. AR further submitted that the Ld. CIT(A)-
NFAC, on similar set of facts, considered the assessee’s son’s
case (Ankit Dilip Jain) but the Ld. CIT(A)-NFAC has not
considered the assessee’s case. Therefore, the Ld. AR pleaded
that the addition made by the Ld. AO and confirmed by the Ld.
CIT(A)-NFAC may be deleted.
On the other hand, the Ld. Departmental Representative
submitted that the assessee has not filed any details before the
Ld. AO and even before the Ld. CIT(A)-NFAC and therefore there
is no infirmity in the orders of the Ld. Revenue Authorities and
the same may be sustained.
I have heard both the sides and perused the material
available on record as well as the orders of the Ld. Revenue
Authorities. It is an undisputed facts that the assessee has
disclosed the investment in his books of account and also shown
the same in the computation of income which was offered for
taxation. Therefore, the Ld. AR’s contention that the provisions
of section 69A are not applicable in the present case of the
assessee as the cash deposits during the demonetization period
are duly recorded in the assessee’s books of accounts holds good.
6 I have also considered the decision of the Division Bench of this Tribunal in the case of ITO vs. Sri Tatiparti Satyanarayana [ITA No.76/Viz/2021], dated 16/03/2021 wherein the Tribunal held that the provisions of section 69 cannot be invoked when the assessee has disclosed investment in the books of account and in the computation of income which was offered for taxation. Considering the above facts and circumstances of the case, I find force in the arguments of the Ld. AR and accordingly I direct the Ld. AO to delete the addition made on account of unexplained money amounting to Rs.27,50,000/- since the provisions of section 69A are not applicable in the case of the assessee. It is ordered accordingly.
In the result, appeal of the assessee is allowed.
Pronounced in the open Court on 31st January, 2024.
Sd/- (दु�वू� आर.एल रे�डी) (DUVVURU RL REDDY) �या�यकसद�य/JUDICIAL MEMBER
Dated : 31/01/2024
OKK - SPS
आदेश क� ��त�ल�प अ�े�षत/Copy of the order forwarded to:- 1. �नधा�रती/ The Assessee– Sobha Devi Dilipkumar, Shop No.82, Swarna Complex, Rajagopalachari Street, Governorpet, Vijayawada, Andhra Pradesh – 520002. 2. राज�व/The Revenue – the Income Tax Officer, Ward-2(1), CR Building, 1st Floor, Annex, MG Road, Vijayawada, Andhra Pradesh – 520002. 3. The Principal Commissioner of Income Tax, 4.आयकर आयु�त (अपील)/ The Commissioner of Income Tax (Appeals), 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, �वशाखापटणम/ DR, ITAT, Visakhapatnam 6.गाड� फ़ाईल / Guard file आदेशानुसार / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam
