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Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE
O R D E R
Per Shri Duvvuru RL Reddy, Judicial Member :
This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No.ITBA/NFAC/S/250/2021- 22/1036569377(1) dated 26.10.2021 for the Assessment Year (A.Y.) 2017-18.
Brief facts of the case are that the assessee is an individual, deriving income from salary, income from other sources apart from agricultural income, filed his return of income for A.Y.2017-18 on 25.11.2017 Gurubilli Venkata Durga Naga Prasad Rao, Kakinada declaring total income at Rs.3,51,240/-. Subsequently, the case was selected for CASS scrutiny for the reason ‘cash deposits during the year’. Accordingly, notices u/s 143(2) and 142(1) of the Income Tax Act, 1961 (in short ‘Act’) were issued through ITBA system and duly served on the assessee asking for detailed information relating to the cash deposited during the F.Y.2016-17, relevant to A.Y.2017-18. The Assessing Officer (AO) completed the assessment u/s 143(3) on 15.12.2019 determining the total income at Rs.34,51,240/- by disallowing a sum of Rs.31,00,000/- on account of gifts received by the assessee from his father, mother and wife by way of sale of agricultural lands. The AO treated the sum of Rs.31,00,000/- as unexplained income u/s 69A of the Act and added to the income returned in the absence of any circumstantial evidence and also the time lag between the availability of the source with that of the deposit.
Aggrieved by the order of the AO, the assessee preferred appeal before the CIT(A) and the Ld.CIT(A) upheld the addition made by the AO and dismissed the appeal of the assessee.
4. Aggrieved by the order of the Ld.CIT(A), the assessee preferred appeal before the Tribunal and raised the following grounds :
Gurubilli Venkata Durga Naga Prasad Rao, Kakinada 1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.
2. The learned Commissioner of Income Tax (Apepals) is not justified in sustaining the addition of Rs.31,00,000/- made by the assessing officer u/s 69A of the Act towards alleged unexplained cash deposits in the bank account of the appellant.
Any other grounds may be urged at the time of hearing.
Ground No.1 and 4 are general in nature which does not require specific adjudication.
Ground No. 2 is related the disallowance of Rs.31,00,000/- made by the AO u/s 69A of the Act towards alleged unexplained cash deposits in the bank account of the assessee. The Ld.AR submitted that the assessee had received gifts of Rs.11 lakhs from his mother on 27.09.2015, Rs.10 lakhs from his wife on 14.12.2015 and Rs.10 lakhs from his father on 30.01.2016 on account of sale of agricultural land. The assessee further submitted that his father, mother and wife are assessed to income tax and filed confirmation letters. The Ld.AR submitted that for each and every amount of cash deposited in bank accounts, evidence as well as supportive information and explanation was submitted. But the AO, without properly verifying and enquiring the details and documents submitted, came to the conclusion and treated the amount of Rs.31 lakhs as unexplained income and brought to tax u/s 69A of the Act is not Gurubilli Venkata Durga Naga Prasad Rao, Kakinada correct in law and on facts.. The Ld.CIT(A) is also not justified in sustaining the addition of Rs.31,00,000/- made by the AO towards alleged unexplained cash deposits in the bank account of the assessee. The Ld.AR, therefore pleaded to set aside the order of the Ld.CIT(A) and allow the appeal of the assessee on this ground.
Per contra, the Ld.DR supported the order of the Ld.CIT(A) and submitted that the Ld.CIT(A) is correct in sustaining the addition made by the AO as the assessee could not adduce any evidence to substantiate that all the three i.e. his father, mother and wife have all deposited in the bank during the financial year out of sheer love and affection which is not acceptable in terms of timing of the transfer. Therefore, pleaded to uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee on this ground.
We have heard both the parties and perused the material placed on record. The contention of the assessee is that he has received the amount of Rs.31,00,000/- from his parents and wife, who are also assessed to income tax and they have given confirmation letters. They have received this amount by way of sale of agricultural land for Rs.32,00,000/-. But the contention of the revenue on this aspect is that there is time gap between the sale deed and deposit of cash in the bank account of the assessee. It is Gurubilli Venkata Durga Naga Prasad Rao, Kakinada not a valid reason to make addition u/s 69A simply for the reason that there is time gap. The persons, who gave money are none other than the assessee’s parents and wife. The assessee has filed paper book, which established the sale transaction of the family members, considering the above evidence. Therefore, I am of the firm view that the assessee has explained his source properly. Therefore, I direct the AO to delete the addition of Rs.31,00,000/- made u/s 69A of the Act.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 31st January, 2023.