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Income Tax Appellate Tribunal, HYDERABAD BENCHES “SMC”, HYDERABAD
Before: SHRI LALIET KUMAR
O R D E R PER LALIET KUMAR, J.M. The appeal of the assessee for A.Y. 2017-18 arises from the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dt.27.12.2023 invoking proceedings under section 144 of the Income Tax Act, 1961 (in short, “the Act”).
The grounds raised by the assessee read as under :
“ 1. On the facts and the circumstances of the case the order of the ld.CIT(A) is erroneous and bad in law. 2) The ld.CIT(A) grossly failed to consider and appreciate the facts and evidence on record and summarily passed the order without application of mind. 3) The ld.CIT(A) erred in upholding the addition of Rs.16,32,500/- as unexplained investment u/s 69A of I.T. Act, 1961. 4) The ld.CIT(A) further erred in upholding the levy of tax u/s 115BBE of I.T. Act, 1961.”
The brief facts of the case are that assessee is an individual and super senior citizen. Initially he did not file any return of income. During the demonetization period, assessee made cash deposit of Rs.16,32,500/- in his savings bank accounts maintained with State Bank of India. A notice u/s 142(1) was issued to the assessee on 15.02.2008 to which he did not respond. Further, a show cause notice was issued on 13.03.2019 to explain the non- compliance. However, the assessee did not respond again. Finally, another show cause notice was issued on 25.04.2019 to furnish the sources of making huge cash deposits with supporting documents.
3.1. In response to the final show cause notice, the assessee submitted that he retired from defence service in the year 1973 subsequently worked with HMT Bearings Limited and got retired in the year 1995. Further, in the year 2007-08, he sold house at B.K.Guda at Hyderabad at Rs.9,22,000/-. Thus, saved income out of sale proceeds, rental income, insurance policy maturity, salary income etc. In response to notice u/s 133(6), Statement of Savings account has been provided showing total deposits of Rs.16,32,500/-. However, the aforesaid contents made by the assessee have been rejected on the ground that substantial time has elapsed from the sale of house, therefore, failed to substantiate the cash deposit with documentary evidence. Eventually, the Assessing Officer assessed the total income of the assessee as unexplained cash deposit u/s 69A of the Act and accordingly, passed assessment order on 26.11.2019 u/s 144 of the Act.
Feeling aggrieved with the order of Assessing Officer, assessee filed an appeal, which was later migrated to the ld.CIT(A), NFAC, Delhi, who dismissed the appeal of assessee by holding as under :
“6.1 I have gone through the Assessment Order and submissions of the appellant. The AO has carried out additions to the tune of Rs. 16,32,500/- for the year under consideration. 6.2 The AO has stated that during the course of the assessment proceedings, the AO has stated that the appellant had made total cash deposits of Rs.16,32,500/- in his bank account Nos. 31478643801 and 4270101001717 held with State Bank of India, Dr.A.S Rao Nagar Branch and Axis Bank Limited, Dr.A.S.Rao Nagar Branch during the demonetization period. 6.3 During the course of the assessment proceedings, the appellant was asked to furnish the explanation of cash deposits. 6.4 In response the appellant had submitted his letter dated 18.08.2019 before the AO and the appellant has stated that the appellant is a super senior citizen and filed return of income in response to notice u/s 142 of the I.T.Act admitting total income of Rs 4,83,486/-. The appellant was retired from defence services in the year 1973 and thereafter worked for HMT Bearings Limited as Security Supervisor and retired in the Year 1995.
6.5 Further the appellant has stated that the appellant had sold a house at B.K.Guda, Hyderabad in the year 2007-08 for Rs. 9,22,000/- and paid tax of Rs 63,194/-. The appellant has stated that cash deposits out of this sale proceeds. 6.6 The AO has stated during the assessment proceedings that the contention of the appellant that the cash deposits are out of sale proceeds of the appellant during the Asst year 2007-08 cannot be accepted as there is nearly 12 years gap between the year of sale proceeds and year of cash deposits. Therefore, the sources of cash deposits were remained unexplained. Hence the amount of Rs. 16,32,500/- was added to the total income of the appellant for the year under consideration. 6.7 It is noted from the submissions furnished before this office that the appellant has stated that the appellant had deposited Cash during demonetization period and that cash deposited was made out of cash withdrawals by the appellant and his daughter. 6.8 Further it is noted that the appellant has not furnished any documentary evidences to substantiate his claim for the year under consideration. Therefore, the contention of the appellant is not found to be acceptable. 6.9 In view of the above, I am of the considerate view that the reason mentioned for the appellant’s claim by the appellant is not satisfied. Therefore, the addition made to the tune of Rs. 16,32,500/- by the AO is upheld.”
Before me, ld.AR submitted that the assessee, who is a super senior citizen, got retired from defence service as well as HMT bearings Limited, made cash deposits in question out of salary savings, withdrawals of self and his daughter. He further submitted that the cash deposits made by the assessee were out of genuine source of income. The learned Authorised Representative submitted that considering the above legitimate facts, the addition made in the extant case as unexplained income was uncalled for and deserves to be deleted.
On the other hand, Ld. D.R. relied upon the orders of lower authorities.
I have heard the rival contentions of both the parties and perused the material available on record. On perusal of the orders of lower authorities, the submissions made by the assessee and the facts relating to the cash deposits, it is an admitted fact that the assessee and her daughter made cash withdrawals accumulating to Rs.10,61,000/- during the period from 2014 to 2016. It is also not in dispute that assessee is a senior citizen and worked with defence services and HMT bearings Limited. The contention of the assessee that being in old age, he kept the amount for some emergency expenses like medical expenses etc., is acceptable. Though, the assessee has properly demonstrated the source of cash deposits to an extent of Rs.10,61,000/-, however, he failed to explain the sources of the remaining amount. In the totality of the facts and circumstances of the instant case, I deem it appropriate to confirm the addition to an extent of Rs.4,00,000/- and thereby deleting the addition to an extent of Rs.12,32,500/- to meet the ends of justice. Accordingly, an addition to an extent of Rs.4,00,000/- is confirmed and the remaining amount of Rs.12,32,500/- is deleted. Thus, the appeal of the assessee is partly allowed.
In the result, the appeal of the assessee is partly allowed.
Order pronounced in the Open Court on 30th January, 2024.