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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
This appeal by the assessee is directed against the order dated 28.09.2022 of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi for Assessment Year 2017-18. The assessee has raised following grounds of appeal:
“1. Ground for challenging addition of Rs. 8,00,000/- u/s 62A being the cash deposited in saving bank accounts.That the learned CIT (A) erred in retaining the addition of Rs. 8,00,000/- as unexplained investment u/s 69A being the amount of demonetized currency deposited in the bank accounts contrary to the facts of the cases and not appraising the circumstances of appellant in which he lives. As a matter of fact, the cash was deposited in several bank accounts with different nationalized banks. This cash was deposited out of his own savings, savings of his deceased wife who was also a retired Page 1 of 7 Gyan Prakash Shrivastava Page 2 of 7 government pensioner and partly out of recoveries received from a debtor with whom long litigation was going on. And which is most arbitrary, unwarranted and not backed by the facts on records. The appellant is super senior citizen and has no family and live alone as his wife died few years back and has no children, Being very old and therefore suffers from lot many diseases as well as ailments and being alone and therefore had the tendency to keep large amount of cash at home to cover any contingent expenses as there is nobody left in the family to look after him. This cash at home was comprising of his own savings from retirement funds and pension as well as savings of his deceased wife. A total of Rs.5,73,000/- was deposited out this sum in bank account. This sum was to be deposited in the bank account in view of demonetization of old currency and all his saving were in old high denomination demonetized currency as otherwise this money will have no value after 31 December 2016. This abnormal situation compelled him to deposit the money in the bank account. Here it is important to note that the appellant as well his wife both were regular income tax assesses as both of them were government employees. The PAN of his wife is BELPS3826Q. The learned CIT(A) partly believed his contention and allowed the relief of Rs. 5,73,000/- and retained the addition of Rs. 8,00,000 for want of documentary proof of litigation which were already part of original assessment record and which is against the principal of natural justice and otherwise bad in law.
Ground for challenging addition of Rs. 8,00,000/- as unexplained investment u/s 69A though is a recovery from on identifiable debtor. That the learned CIT(A) erred in not realizing the fact that a sum of Rs. 8,00,000 was received from a debtor in demonetized currency with whom litigation was going on and appellant had no option but to accept the demonetized currency as after about 13-14 years of long litigation he had almost the hope of recovery of the amount advanced by cheques in 2004 and therefore the acceptance of currency and deposit of the same in the bank account should have been accepted but the CIT(A) has totally ignored this fact and which is totally wrong and unjustified. As a matter of fact at least 9 criminal cases were pending bearing numbers (7099/06, 2082/05, 7024/06, 821/07, 8933/06, 468/05, 430/05, 13693/06, 8923/06). The defendant (Mr. Jay Khandelwal) was absconding and several search warrants were issued by the court against him.
That the Appeal Order passed by the learned CIT(A) is wrong, unjustified and against the principle of natural justice.
That the appellant prays leave to add, amend, alter and/ or modify all or any of the grounds of Appeal on or before the date of final hearing.” Page 2 of 7
Gyan Prakash Shrivastava Page 3 of 7 4. The solitary issue arises in this appeal of the assesse is regarding the addition of Rs.8 lacs made by the AO u/s 69A of the Act and sustained by Ld. CIT(A) towards cash deposit in the Bank account. The assesse is an individual and filed return of income for the year under consideration on 27th July 2017 declaring total income of Rs.7,43,200/-. The case was selected for limited scrutiny with reason cash deposit during the demonetization period. The AO noted that the assesse has made total deposit of Rs.13,73,000/- in his saving bank account with IDBI and Bank of India. The assesse was asked to explain the source of cash deposit made by him during the demonetization period. The assesse submitted before the AO that the assesse has received recovery of Rs.8 lacs of loan in old currency notes and balance amount of Rs.5,35,000/- was deposited out of the saving of his wife. The AO did not accept this explanation and made the addition of the entire amount of deposit of Rs.13,73,000/-. On the appeal the Ld. CIT(A) has accepted the explanation of source of cash deposit of Rs.5,73,000/- by considering the fact that both assessee and his wife are retired Government employees but confirm the balance of Rs.8 lac addition made by the AO.
Before the Tribunal the Ld. AR of the assesse has submitted that the assesse is retired teacher and victim of fraud and cheating of his retirement benefit in the hand of one Shri Khandelwal. He has submitted that the assesse has paid a sum of Rs.11 lacs from retirement benefit to one Shri Jain Khandelwal who promised a high return on the investment but subsequently the assesse realized that he was cheated his money. He
Gyan Prakash Shrivastava Page 4 of 7 has referred to the details of the payment of Rs.11 lacs to Shri Jai Khandelwal through cheques out of his retirement benefit and thereafter, he has initiated the criminal proceedings against the said person u/s 138 of the Negotiable Instrument Act wherein arrest warrant was also issued against the said person by the Court. The relevant documents are filed in the paper book at page no.7 onwards. Thus, the ld. AR has submitted that during the demonetization period Shri Jain Khandelwal has returned sum of Rs.8 lace in old currency which was deposited in the bank account by the assessee. Thus, the source of deposit has been duly explained with supporting evidence. He has pleaded that the addition sustained by the Ld. CIT(A) be deleted.
On the other hand, ld. DR has submitted that in absence of any evidence to show that the alleged amount of Rs.8 lac has been received by the assesse from Shri Jain Khandelwal the explanation cannot be accepted. He has relied upon the orders of the authorities below.
We have considered the rival submissions as well as relevant material on record. The assesse has explained the source of Rs.8 lac with documentary evidence of giving amounts from his retirement benefit to one Shri Jain Khandelwal through cheques. The details of cheques are as under:
Gyan Prakash Shrivastava Page 5 of 7
This fact of giving amount to Shri Jai Khandelwal is not in dispute. Thereafter, the assesse filed a case in the court of law u/s 138 of the Negotiable Instrument Act wherein the court took cognizance and also Gyan Prakash Shrivastava Page 6 of 7 issues arrest warrant against the accused. The assesse has filed relevant record regarding court proceedings and issue of arrest warrant. The assesse has then explained that during the demonetization period Shri Jai Khandelwal has returned a sum of Rs. 8 lac in old currency notes. It is pertinent to note that the details and evidence filed by the aasessee clearly shows that the assesse was victim of fraud and cheating of his hard earned money in the hands of the said person Shri Jai Khandelwal. The assessee has taken all steps under law to recover the money and finally received a sum of Rs. 8 lac from the said person in old currency notes. It is well known fact that during the demonetization period there was a tendency of discharging the liability in old currency if available with someone instead of depositing the same in the bank account to avoid scrutiny. Both assessee and his wife ( now deceased ) were government employees and having retirement fund with them and therefore, the explanation of the assesse giving funds through cheques to Shri Jain Khandelwal and receiving back the fund during the demonetization period cannot be disbelieved. Accordingly in the facts and circumstances of the case, we find that the assesse has duly explained the source of Rs.8 lac deposited in the bank account and consequently the addition sustained by the Ld. CIT(A) is deleted.
In the result, appeal of assessee is allowed.
Order in pronounced in Open Court on 27/ 07/2023.