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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
This appeal has been filed by the assessee against the order dated 01.10.2019 passed by the Ld. Commissioner of Income Tax (Appeals)-2, Amritsar, in respect of the Assessment Year 2011-12.
The assessee has raised the following grounds of appeal:
Paramjit Kaur v. ITO “1. The order of the CIT(A) is contrary to facts and law.
2. The ld. CIT(A) has grossly erred in not considering an amount of Rs.493984/- which was invested out of the saving of the appellant and her family members.
The lower authorities has grossly erred in making / confirming an addition of Rs. 493984/- without bringing any material on record to prove that the appellant has earned this amount from undisclosed sources and this amount was not accumulated from past savings of the appellant and her family members.
4. That the assessment order passed/confirmed by the lower authorities are arbitrary, illegal, illogical, unreasonable, and unwarranted with considering the facts and circumstances of the case and law on the point.
That the appellant craves to leave and or amend grounds of appeal till the appeal is heard and disposed off.”
3. None attended on behalf of the assessee. However, considering the small addition of Rs.4,93,984/- made on account of undisclosed income earned without being substantiated, after hearing of the ld. DR, it is decided to hear the appeal.
4. During the assessment proceedings, the AO being not satisfied with the submission of the assessee holds that source of investment in purchase of land to the extent of Rs. 8,93,984/— remained unsubstantiated and added the same to the return income of the assessee. However, in appeal the Ld. CIT(A) has granted part relief by observing as under-
“7. I have considered the facts of the case, submissions of the appellant and the affidavit and statement of Sh. Dalbir Singh recorded now by Ld AO.
During assessment proceedings the appellant filed a confirmation (though given the title Affidavit) dated 17.06.2010 from Dalbir Singh stating that a tractor Mahindra 275DI Engine no. RCS3833 was purchased by him from Sh. Charan Singh. Ld. AO did not accept the so called affidavit on the ground that it was dated 17. 6. 2010, but had been attested by the notary on 22.11. 2018, that is, after almost 8 ½ years. No sale consideration was mentioned in the affidavit.
In the statement recorded now, Sh. Dalbir Singh has submitted that he works as a subcontractor and that he had purchased the tractor for Rs. 3 lakhs. In view of above, it is held that the availability of cash in hand of Rs, 3 lakhs stands explained. Source of investment in purchase of land to the extent of Rs. 3 lakhs is further accepted.
Regarding the remaining amount of investment of Rs.5,93,984/-, (Rs. 8,93,984/— Rs. 3,00,000/-) , no explanation has been furnished by the appellant apart from stating that it was out of the past savings of the family members kept as cash in hand/ earlier cash withdrawals. As per bank a/c statement, the appellant has withdrawn only Rs. 50,000/- from her account on 06.01.2011. The submission of the appellant that the amount was-used for purchase of fend is accepted. Source of investment in purchase of land to the extent of Rs.50,000/- is accepted. Further submission that Rs. 49,000, Rs 78,000/- were contributed by her sons/ daughters-in-law out of their savings is accepted to the extent of Rs 50,000/-.
In view of above, the addition made by Ld. AO at Rs. 8,93,984/- is restricted to Rs. 4,93,984/-.”
5. The appellant contended in the grounds that the ld. CIT(A) has grossly erred in confirming an amount of Rs.493984/- as unexplained ignoring the fact that it was invested out of the saving of the appellant and her family members; that an addition of Rs. 493984/- is confirmed without bringing any material on record to prove that the appellant has earned this Paramjit Kaur v. ITO amount from undisclosed sources and this amount was not accumulated from past savings of the appellant and her family members and that the addition made in the assessment order/confirmed by the lower authorities are arbitrary, illegal, illogical, unreasonable, and unwarranted under the facts and circumstances of the case and law point.
The Ld. DR stands by the impugned order.
Having heard the Ld. Addl. CIT DR, perusal of record, memorandum of appeal and impugned order, it is noted that the appellant assessee had made investment of Rs. 8,93,984/- in bank deposit. The Ld. CIT(A) has accepted Rs. 3,00,000/-, Rs. 50,000/- and Rs. 50,000/- as explained on account of sale of tractor, cash withdrawal and contribution buy son, the remaining amount of investment i.e., Rs.4,93,984/-, [Rs. 8,93,984/— (Rs.
3,00,000/- +50,000/- +50,000/-)), is confirmed as unexplained by rejecting the appellant explanation that the deposit was out of the past savings of the family members kept as cash in hand/ earlier cash withdrawals without bringing on record the supporting corroborative documentary evidence to disprove the claim of the appellant.
In case of Smt. Uma Agrawal Vs. ITO-1(3), Gwalior [2021] 127 taxmann.com 735 (Agra - Trib.) ITAT Agra Bench has noted that Assessing
Paramjit Kaur v. ITO Officer had not brought on record any document, evidence etc. to show that amount deposited in account by assessee was her undisclosed income arising from business or any other source. Assessee had duly explained source of deposit i.e her previous year savings. Thus, on facts, the Tribunal observed that said amount in question deposited by assessee during demonetization could not be treated as income of assessee and addition under section 69A made by Assessing officer was unjustified vide para 28 and 29 as under:
In the present case the assessee had given the explanation to the AO during the assessment proceedings and had submitted that the amount deposited in the bank, were her money saved by her in last many year's and were kept by her , for herself and for the family in case of emergency need. However, this explanation was rejected by the AO on the pretext the assessee was not having income from any business. However assessing officer has not brought on record any document, evidence etc to show that the assessee was having any income from any other source other than saving from various activities mentioned elsewhere. Further no evidence had been brought on record , AO, in terms of press statement dated 18-11-2016 and SOP to established that the amount deposited in the account was not of the account holder/assessee but of somebody else. In the light of the above when the AO had brought on record the evidence of proving that the money belongs to other person and not of the assessee, the amount deposited shall not added as income of the assessee.
In our opinion assessee had duly explained the source of deposit i.e previous years saving and we have no hesitation to accept the same , as it would been presumed that this small amount of Rs. 2,21, 000/would have been accumulated or saved by her from various activities undertaken by her for and on behalf of family in last many years . Further as mentioned herein above, in the decision of Kirti (supra), women per say cannot be said to be not having income from any activities, as they are presumed to always been doing economic activities in the family for many years, hence in our view the assessee had duly explained the source of her investment. Therefore no additions can be made by lower authority. Further even if we ignore the explanation, for the sake
Paramjit Kaur v. ITO of argument, then also it is for the assessing officer to bring on record some cogent evidence to prove that the amount deposited in the bank was undisclosed income arising from the business or from any other activities. No evidence has been brought on record by the lower authorities. Hon'ble Supreme Court in the matter of CIT v. Smt. P.K Noorjahan [1999] 103 Taxman 382/237 ITR 570 it was held as "3. Shri Ranbir Chandra, the learned counsel appearing for the revenue, has urged that the Tribunal as well as the High Court were in error in their interpretation of section 69. The submission is that once the explanation offered by the assessee for the sources of the investments found to be non-acceptable the only course open to the ITO was to treat the value of the investments to be the income of the assessee. The submission is that the word 'may' in section 69 should be read as 'shall'. We are unable to agree. As pointed out by the Tribunal, in the corresponding clause in the Bill which was introduced in the Parliament, the word 'shall' had been used but during the course of consideration of the Bill and on the recommendation of the Select Committee, the said word was substituted by the word 'may'. This clearly indicates that the intention of the Parliament in enacting section 69 was to confer a discretion on the ITO in the matter of treating the source of investment which has not been satisfactorily explained by the assessee as the income of the assessee and the ITO is not obliged to treat such source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. The question whether the source of the investment should be treated as income or not under section 69 has to be considered in the light of the facts of each case. In other words, a discretion has been conferred on the ITO under section 69 to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case.
In the instant case, the Tribunal has held that the discretion had not been properly exercised by the ITO and the AAC in taking into account the circumstances in which the assessee was placed and the Tribunal has found that the sources of investments could not be treated as income of the assessee. The High Court has agreed with the said view of the Tribunal. We also do not find any error in the said finding recorded by the Tribunal. There is, thus, no merit in these appeals and the same are, accordingly, dismissed. No order as to costs."
We understand that the intention of the Parliament in enacting section 69 was to confer a discretion on the ITO in the matter of treating the source of investment which has not been satisfactorily explained by the assessee
Paramjit Kaur v. ITO as the income of the assessee and the ITO is not obliged to treat such source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. The question whether the source of the investment should be treated as income or not under section 69 has to be considered in the light of the facts of each case.
In other words, a discretion has been conferred on the ITO under section 69 to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case.
In the present case, the discretion had not been properly exercised by the ITO and the ld. CIT(A) in taking into account the circumstances in which the assessee was placed and in view of that matter we hold that the past saving and receipt from relatives and family members would be genuine sources of investments of disputed amount. Thus, the amount of Rs.493984/- stands explained.
In the above view, we hold the order of the CIT(A) is perverse to the facts on record. Accordingly, the addition confirmed amounting to Rs. 4,93,984/- is deleted.
Paramjit Kaur v. ITO 12. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 26.09.2022 Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr/PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T