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Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI
Before: SHRI SANJAY GARG & SHRI ASHWANI TANEJA
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the Revenue against the order dated 09.05.2012 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2008-09.
The Revenue has taken the following grounds of appeal:
1. On the facts and in the circumstances of the case and in law, the Ld. C1T(A) has erred in allowing an opening cash balance of Rs.5,00,000/- on the mere assumption that the assessee had income of Rs.1,00,000/- per year during the last five years.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing gift of Rs.2,00,000/- as genuine transaction without any confirmatory evidence, identity, capacity and creditworthiness of the donors.
3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing Rs.1,80,000/- as saving out of cash
4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting an addition of Rs.2,50,248/- ignoring the fact that the investigation of the department clearly proves that the explanation offered regarding cash received from sale of jewellery is bogus in nature."
3. The assessee in this case is an 83 year old widowed lady. During the assessment proceedings the Assessing Officer (hereinafter referred to as the AO) noted that the assessee had made cash deposits in saving account of Rs.8,40,000/- with Central Bank of India and Rs.1,95,000/- in Union Bank of India during the relevant financial year. She had also made fixed deposits of Rs.4,75,000/- in cash in HDFC bank. On being asked to explain, the assessee submitted that the cash deposits in saving bank accounts and fixed deposits in HDFC Bank were being out of cash in hand of Rs.11,50,000/- and out of savings from household expenses of Rs.35,000/- per month received from children, Rs.3,20,000/- received as gifts on various occasions and Rs.2,50,248/- out of jewellery sold in cash. The total of above items comes out at Rs.19,00,248/- out of which the assessee had deposited cash in bank of Rs.10,60,000/- and FD in HDFC Bank of Rs.4,75,000/-. The assessee further explained the source of cash in hand that the same had accumulated to the assessee over a number of years, the source of which was from tuition fees in earlier years, gift from family and friends and relatives and sale proceeds of jewellery etc. Since the assessee was an old aged illiterate lady, hence she did not maintain the formal records. It was explained that the assessee was accumulating the household money saved out of the contributions made by her children and that the assessee had barely any personal expenditure and therefore preferred to save and secure the money so that the same may be used in time of need. However, the AO was not satisfied with the explanation given by the assessee. He held that the assessee could not provide the documentary
3 Smt. Rati A. Daruwalla evidences in support of her claim and added the above amounts into the income of the assessee making a total addition of Rs.17,82,776/-. Being aggrieved by the order of the AO, the assessee preferred appeal before the Ld. CIT(A).
The Ld. CIT(A), after considering the overall facts and circumstances of the case, observed that in the instant case, the AO had ignored the evidences filed by the assessee such as return of income, PAN of the children along with their confirmation in respect of the household expenditure/contributions paid by them to the assessee. He noted that the children of the assessee were salaried employees and were assessed to income tax. There was no doubt about the creditworthiness and financial status of the children to provide Rs.35,000/- per month towards household expenses to the assessee. He therefore held that the amount of Rs.35,000/- per month received by the assessee from children has passed the test of human probabilities and the AO has not brought any evidence to show that the above contention of the assessee was not correct. He therefore deleted the addition of Rs.1,80,000/- in relation to deposits out of savings from household. With regard to the receipt of money by sale of jewellery, the Ld. CIT(A) found that the assessee had produced the copies of the purchase bill of the jewellery, PAN of Mr. Pravin Jain to whom the jewellery was sold and sales tax registration details of the said concern. He noted that the assessee had discharged the initial burden of proof to prove the genuineness of the transaction. On the other hand, the AO has not proved or brought any contrary evidences on record that the transaction was not genuine. He, relying upon the various case laws, held that merely because the creditor/purchaser of the jewellery could not be found or produced, it would not be correct to invoke provisions of section 69A when the assessee, otherwise, has produced the relevant documents on the file showing the genuineness of the transaction. He, considering the overall facts and 4 Smt. Rati A. Daruwalla circumstances of the case, observed that the assessee had reasonably explained the receipt of money of Rs.2,50,248/- on sale of old gold ornaments and deleted the addition in this respect also.
With regard to the gifts from relatives, the assessee had submitted a list of relatives to the AO from whom the assessee had received the gifts of small amounts aggregating Rs.3,20,000/-. The Ld. CIT(A), considering the facts of the case and considering the age of the assessee of 83 years, held that an amount of Rs.2 lakh can be a reasonable amount which would have been received by the assessee from her son, daughter or brothers. He held that it was improbable that the rest of the small amounts in the range of Rs.15,000/- to Rs.20,000/- could have been given by so many relations in a particular year. He, therefore, considering the overall circumstances, treated the amount of Rs.2 lakh as explained out of the total addition of Rs.3,20,000/- and therefore confirmed the addition of Rs.1,20,000/- as unexplained investment. With regard to the opening balance of Rs.11,50,000/-, the Ld. CIT(A) observed that taking into consideration the overall facts and circumstances, the age and widowed status of the assessee it would be reasonable to assume that she had an income or receipts of about one lakh of rupees a year which could be below taxable limit. He therefore taking an average of 4 to 5 five years held that a reasonable amount of Rs.5 lakh could be said to be explained. He therefore confirmed the addition of Rs.6,50,000/- out of the total addition made by the AO of Rs.11,50,000/- in relation to the cash in hand/opening balance. The Ld. CIT(A) further observed that since the opening balance of Rs.5 lakh was treated as explained, hence the investment in fixed deposits to the tune of Rs.4,75,000/- will remain explained.
So far as the interest income of Rs.2,47,776/- was concerned, the assessee had explained that the tax was deducted at source by the bank of Rs.10,112/- with respect to interest income earned and that there was no loss of revenue to the department and thus the said interest income was not taxable income. The said income could not be said to be a concealed income of the assessee. The Ld. CIT(A) therefore held that out of total disallowance of Rs.15,35,000/- (10,60,000/- + Rs.4,75,000/-) an amount of Rs.11,30,248/- is held as explained and confirmed the remaining disallowance made by the AO. The Revenue, thus, has agitated the deletion of the remaining disallowance by the Ld. CIT(A).
We have heard the rival contentions. We find that the Ld. CIT(A) has given a detailed reasoning after properly appreciating the explanation and evidences submitted by the assessee before him. Even otherwise the assessee could not be supposed to be without any cash or deposits at the age of 83 years and hence, the entire amount found deposited/cash in hand with the assessee cannot be said to be as unexplained. The Ld. CIT(A) has duly considered the source of the income of the assessee, the financial status of her children, the age of the assessee and has made a reasonable estimate of the approximate money which the assessee was supposed to possess and treated the same as explained. We do not find any infirmity in the above well reasoned order of the Ld. CIT(A) and the same is therefore upheld.
In the result, the appeal of the Revenue is therefore dismissed.
Order pronounced in the open court on 24.11.2015.