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Facts
The assessee deposited Rs. 10,00,000/- in cash in his savings account. The Assessing Officer (AO) treated this deposit as undisclosed income, which was upheld by the First Appellate Authority. The assessee contended that the cash was from past savings and current income of the family.
Held
The Tribunal found that neither the assessee fully explained the source of the cash nor did the department completely disregard the evidence. In the interest of justice, the Tribunal restricted the addition to Rs. 1,00,000/-.
Key Issues
Whether the cash deposit in the savings account was rightly treated as undisclosed income by the AO and sustained by the CIT(A)?
Sections Cited
143(2), 148, 142(1)
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Income Tax Appellate Tribunal, DELHI BENCH “SMC’’ : NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLE
ORDER This appeal by the assessee is emanating from the order of the NFAC, Delhi in Appeal No. ITBA/NFAC/S/250/2024-25/1070575639(1) dated 22.11.2024 relating to assessment year 2012-13.
Heard both the sides and perused the records. At the threshold, it is noted that there is a delay of 212 days in filing the appeal before the Tribunal. It was the contention of the assessee that assessee had filed the appeal through his counsel and deposited Tribunal Fee of Rs. 10,000/- vide challan on 25.01.2025 and submitted all the documents before his counsel Late Shri Anil Kumar within the stipulated time. It was further submitted that the said Counsel filed the appeal before the ITAT, but could not file the annexures within the stipulated time and in the meantime he passed away, as a result delay was occurred in filing the appeal. After hearing both the sides, I find that in view of the aforesaid factual matrix, reasonable cause has been attributed to the assessee for filing the belated appeal.
Hence, I condone the delay in dispute and proceed further.
Brief facts of the case are that the assessee is an individual and derives income from salary and part time accounting during the year. The case of the assessee was selected for scrutiny assessment after reopening u/s. 143(2) of the Act on the basis of information that the assessee has deposited cash of Rs. 10,00,000/- in his saving bank account during the FY 2011-12. Accordingly, statutory notice u/s. 148 of the Act was issued on 19.03.2019 by the Assessing Officer after recording the satisfaction Pr. CIT, Muzffarnagar, which was duly served upon the assessee. In compliance with the notice u/s. 148 of the Act, the assessee e-filed his return declaring taxable income of Rs.1,77,930/- on 04.11.2019. Notice u/s.143(2) and notice u/s. 142(1) of the Act along with questionnaire were issued and served upon the assessee. In compliance with the statutory notices, the assessee submitted online replies to the queries raised. During the assessment proceedings, the assessee was asked to furnish the source of cash deposit of Rs. 10,00,000/- in his saving bank account with State Bank of India, Meerut. In response, the assessee has submitted that the cash deposit of Rs. 10,00,000/- was deposited out of his income, income of his wife and mother of past years as well as of current year. AO did not accept the contention of the assessee and held that assessee has deposited the amount of Rs. 10 lacs in cash in his saving bank account out of his undisclosed income and added the same in the hands of the assessee. However, in appeal, Ld. First Appellate Authority sustained the addition. Against the above, assessee appealed before the Tribunal.
Upon careful consideration, I note that it was the contention of the assessee before the AO, that the addition made by the AO on account of cash deposited worth Rs. 10,00,000/-. The assessee deposited Rs. 10,00,000/- in his savings account with State Bank of India specifically for the purpose of purchase consideration of property/asset. The said cash realized from business receipts, withdrawals during the current financial year, which has been duly recorded in the books/return of income and the source is also from accumulated savings and previous years’ disclosed and assessed income/ withdrawals, accumulated over the preceding years. It was the further contention that to 2 | P a g e keep such cash at home is for meeting urgent, unforeseen medical emergencies and routine cash requirement, being senior citizen and medical conditions of the assessee. It was further submitted that AO wrongly rejected the explanation of the assessee that the assessee and his wife having regular income and filing returns, could not save money at home. It was submitted that AO factually wrong in alleging that the assessee kept all the family income at home in spite of having a bank account whereas the fact remains that the bank account was opened for the first time in May, 2011 and the cash of Rs. 10 lacs was also deposited in May, 2011 itself as per bank statement, filed on record. It was further submitted that during the year under consideration the assessee was having receipt at Rs. 1,77,930/-, her wife Neeraj Sharma, having receipt of Rs. 1,68,000/- (received from professional income of tuitions and coaching) and her mother Smt. Kamla Rs. 2,50,000/- (received from rent) and had sufficient money at home. It was further submitted that assessee decided to buy agriculture land and therefore a sum of Rs. 10 lacs was deposited on 30.05.2011 in the assessee’s savings account with State Bank of India and three cheques were issued of Rs. 3,33,333/- each in the name of Sh. Ved Prakash and Shri Ram Karan both sons of Shri Hukem Chand, R/o Gagol Pargana, Tehsil and District Merrut, but the said deal could not materialize and money was returned to the assessee in cash and with part of this money, the assessee renovated his house. However, AO made the addition on account of that no such deposits were made earlier years; family income was small and could not accumulate such savings, and income must have been consumed over the years and in appeal, Ld. CIT(A) upheld the action of the AO by holding that the income of all the members of the family taken together was just enough to meet the basic requirements and would not allow savings of amount as high as Rs. 10 lacs.
I have given my thoughtful consideration to the assessee’s contentions before the lower authorities and the documents/evidences placed before me as well as Revenue’s contention in support of the impugned addition. I find no reason to accept either parties stand in entirety. This is for the precise reason that neither the assessee has been able to properly explain the source of full cash deposits nor the department could simply brush aside all the relevant evidences at one go. Be that as it may, the tribunal is of the considered view that in these peculiar facts, it is deemed appropriate in the 3 | P a g e larger interest of justice to restrict the impugned addition of Rs.10,00,000/- to Rs.1,00,000/- only with a rider that the same shall not be as a precedent. The assessee gets relief of Rs. 9,00,000/- in other words. Necessary computation shall follow as per law.