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Income Tax Appellate Tribunal, “B” BENCH: KOLKATA
Before: Shri Mahavir Singh, JM & Shri Waseem Ahmed, AM]
Payal Sanei Vs. Income-tax Officer, Wd-32(2), Kolkata (PAN: AEOPA1820L) (Appellant) (Respondent) Date of hearing: 13.10.2015 Date of pronouncement: 15.10.2015 For the Appellant: Miss Varsha Jalan, Advocate For the Respondent: Md. Ghayas Uddin, JCIT, Sr. DR ORDER Per Shri Mahavir Singh, JM:
This appeal by assessee is arising out of order of CIT(A)-XIX, Kolkata in Appeal No. 201/CIT(A)-XIX/ITO,Wd-32(2)/Kol/11-12 dated 06.12.2012. Assessment was framed by ITO, Wd-32(2), Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2009-10 vide its order dated 19.12.2011.
The first issue in this appeal of assessee is against the order of CIT(A) confirming the addition made by AO being cash deposit in ICICI Bank amounting to Rs.3,12,294/- in the name of minor daughter of the assessee. Alternatively, assessee also pleaded for application of peak credit theory in respect to cash deposit. For this, assessee has raised following ground nos. 1 and 2: “1. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the addition of Rs.3,12,294/- made by the AO on account of cash deposits in ICICI Bank.
2. Without prejudice to the above ground no. 1, the Ld. CIT(A) ought to have considered the application of peak credit theory of respect of the alleged cash deposits of Rs.3,12,294/- in the bank.”
We have heard rival submissions and gone through facts and circumstances of the case. The AO during the course of assessment proceedings noticed from AIR Information that she is maintaining another savings bank account no. 030501002168 with ICICI Bank 1/1, Asutosh Chowdhury Avenue, Ballygunge, Kolkata, which is not disclosed in her accounts. During the year under consideration there is total deposit of Rs.3,12,120/- in the said savings bank account. The AO required the assessee to explain the source of deposit and in turn assessee stated that the said bank account was open for the purpose of her minor daughter Miss Ishika Sanei and Payal Sanei AY 2009-10 this cash deposit in the said bank account is out of gift made by Smt. Gita Devi Sanei the grandmother of Miss Ishika Sanei. Smt. Gita Devi Sanei, the donor passed away on 14.04.2009 and it was not possible to verify the source from her. The AO required the assessee to explain the sources by producing the documents like bank account details of Smt. Gita Devi Sanei and her income tax particulars. The AO issued summon u/s. 131 of the Act to assessee, her father in law, her husband and brother in law to know the particulars of Smt. Gita Devi Sanei but none could provide the details. Accordingly, the AO treated the cash deposit as unexplained. Aggrieved, assessee preferred appeal before CIT(A) and before CIT(A) also assessee could not file any details and he confirmed the addition by observing as under: “During the appeal proceedings nothing new has been submitted other than the submission made before the AO at the time of assessment proceedings. In view of the detailed material brought on record and discussed in the assessment order and assessee’s failure to substantiate his explanation only justifies that the addition made is on proper appreciation of facts and evidences. In view of this the addition of Rs.3,12,120/- as income from undisclosed sources is confirmed on merit.”
Aggrieved, assessee is in appeal before us 4. We find that the assessee failed to produce details before the AO and before CIT(A) also. But now Ld. Counsel for the assessee made only plea that since the donor expired and her details were not available at the time of assessment with the assessee and assessee pleaded that now these details are available and the same can be produced before the lower authorities. In term of this, she requested that the issue can be set aside to the file of CIT(A) for adjudicating the issue afresh. When a query from the bench was put to Ld. Sr. DR, he did not raise objection to the setting aside of this issue. Alternatively, Ld. Counsel for the assessee also requested that she is ready to produce the peak credit details in respect of cash deposit of Rs.3,12,294/- in the undisclosed bank account and for that the CIT(A) should give opportunity to the assessee. We find that the plea of the assessee is quite reasonable and let the assessee produce evidence before CIT(A) and also consider the plea of peak credit theory in case the assessee produces evidence. Accordingly, this issue of assessee’s appeal is set aside to the file of CIT(A) and allowed for statistical purposes.
Payal Sanei AY 2009-10 5. The next issue in this appeal of assessee is against the order of CIT(A) confirming the addition on account of disallowance of interest on bank overdraft. For this, assessee has raised following ground no. 3: “3. For that on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.20,048/- on account of interest on bank overdraft.”
6. We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee has claimed deduction of Rs.20,048/- on account of payment of bank interest on bank overdraft. The AO during the course of assessment proceedings noticed that the overdraft facilities were taken for providing loans to various persons, companies namely, Shri Gopal Kr. Sanei, G. S. Fertilizers Pvt. Ltd. etc. wherein her family members were having substantial interest. According to AO, this is nothing but diversion of interest bearing funds by giving interest free loans. Accordingly, AO disallowed this claim of interest of Rs.20,048/-. Before CIT(A) also assessee could not produce any evidence. Even now before us, assessee could not produce any evidence or could not argue how this interest is to be allowed. In term of the above, we confirm this addition and this issue of assessee’s appeal is dismissed.
7. The next issue in this appeal of assessee is against the order of CIT(A) confirming the addition made by AO on account of cash deposit in State Bank of Hyderabad amounting to Rs.32,000/-. For this, assessee has raised following ground no. 4: “4. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the addition of Rs.32,000/- made by the AO on account of alleged deposits at State Bank of Hyderabad.”
We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee is maintaining another bank account no. 52092154683 and no. 62018292708 with State Bank of Hyderabad. From the above bank accounts it is clear that assessee has deposited a sum of Rs.32,000/- in cash on various dates and source is not explained. Before the AO assessee could not file any evidence to support the source of deposit of this cash. Accordingly, the AO added this being undisclosed cash deposit in the bank account. The CIT(A) also confirmed as the assessee could not rebut the findings of AO treating the cash deposit of Rs.32,000/- as unexplained deposit. Now before us, Ld. Counsel for the assessee only made a request that since a major issue of cash deposit is going back to the file of CIT(A) for fresh adjudication, this will have bearing on this issue. Hence, this may also be remitted back to the file of CIT(A). On Payal Sanei AY 2009-10 query from the bench, ld. Sr. DR did not raise any objection to the setting aside this issue to the file of CIT(A). Hence, we remit the matter back to the file of CIT(A) for fresh adjudication. This issue of assessee’s appeal is allowed for statistical purposes.
In the result, the appeal of assessee is partly allowed for statistical purposes.