SHRI ISMAIL NURMAMAD SIPAI,ANAND vs. THE INCOME TAX OFFICER, WARD-2 (3) (5), RAJKOT

This appeal is filed by the Assessee as against the order dated 16.03.2018 passed by the Ld. Commissioner of Income Tax (Appeals)-2, Rajkot, as against the assessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2009- 10.

The brief facts of the case is that the assessee is an individual and employed in Bharat Sanchar Nigam Limited. For the Assessment Year, 2009-10, the assessee has not filed his Return of Income. The Department was in possession of information that the assessee has deposited Rs. 14,81,000/- by way of cash in his ICICI Bank account during the financial year 2008-09. Therefore the case was reopened by issuing a notice u/s. 148 dated 17/03/2016. In response the assessee filed the Return of Income on 08/07/2016 declaring total income of Rs. 4,46,970/-. During the scrutiny assessment, the assessee explained that he borrowed money from friends and relatives for the medical treatment of his brother and nephew. Due to medical emergency reasons, the cash drawn were being re-deposited in the ICICI Bank account. However, the above explanation was not accepted by the assessing officer and therefore the entire cash deposited is treated as unexplained cash deposit and added to the income of the assessee.

Aggrieved against the same, the assessee filed an appeal before Ld. Commissioner of Income Tax(Appeals). The Ld. CIT(A) partly allowed the appeal namely the loans received from 13 persons which is below Rs. 20,000/-. However confirmed the additions of gift received from the wife of Rs. 1,75,000/- and Rs. 3,87,700/- being the past savings of the assessee as not genuine. Thus the Ld. CIT(A) confirmed the addition of Rs. 5,62,700/- as unexplained income.

Aggrieved against the same, the assessee is in appeal before us raising the solitary ground: 1. The Learned Commissioner of Income Tax, (Appeals)-2, Rajkot has erred in law and on facts of the case in confirming addition of Rs. 5,62,700/- made by the Assessing Officer in respect of deposits made in ICICI Bank.

Per contra, the Ld. D.R. appearing for the Revenue supported the order of the Lower Authorities and pleaded that it does not require any interference and additions made is being sustained and assessee’s appeal be dismissed.

We have given our thought consideration and perused the materials available on record. The Ld. CIT(A) had estimated Rs. 5,00,000/- as the past savings of the assessee and disallowed balance Rs. 3,87,000/-. While making such an estimation, the Ld. CIT(A) has not shown on what basis such the disallowance were being made. The assessee had shown an opening cash balance of Rs. 7,20,000/- as on 01/04/2008. Therefore the estimation made by the Assessing Officer is not supported with any valid material therefore the disallowance is not justified. Similarly, the gift of Rs. 1,75,000/- received by the assessee from his wife is also disallowed without assigning any reasons thereon. Such a disallowance is not justifiable in law. Therefore we hereby delete both the disallowance of Rs. 3,87,700/- and Rs. 1,75,000/- and allow the assessee’s appeal.

In the result, the appeal filed by the Assessee is allowed.