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Income Tax Appellate Tribunal, RAIPURBENCH “SMC”, RAIPUR
आदेश / ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 23.03.2022, which in turn arises from the order passed by the A.O under Sec. 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 20.12.2019 for the assessment year 2017-18. The assessee has assailed the impugned order on the following grounds of appeal: “1. On the facts and in the circumstances of the case, the Learned AO has erred on facts and in law in making addition of Rs.9,00,000/- on account of Cash deposit (Specified Bank Notes) in Bank during demonetization period u/s 69A and the Learned CIT (Appeals), National Faceless Appeal Centre, Delhi has erred in confirming the addition to the tune of Rs.7,50,000/- as the addition is contrary to facts, law and legislative intent, hence, it is prayed that the addition of Rs.7,50,000/- confirmed by the Learned CIT (Appeal) may kindly be deleted. 2. The Appellant craves leave to add, amend, alter vary and/ or withdraw any or all the above grounds of Appeal.” 2. At the very outset of the hearing of the appeal, it was submitted by the Ld. Authorized Representative (for short ‘AR’) that the present appeal is time barred by 86 days for which necessary condonation application a/w. an affidavit has been filed by the assessee-appellant. The reasons enshrined in the application reveals that the delay was
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caused because of circumstances which could neither be attributed to any deliberate conduct nor smack of a lackadaisical approach on the part of the assessee-appellant. It was submitted by the Ld. AR that the assessee had remained unaware about passing of the order in her case, for the reason that the mobile number and email-id mentioned in the e-filing portal did not belong to her and was that of her previous counsel. On the basis of the aforesaid fact, it was stated by the assessee applicant that as the impugned order passed by the CIT(Appeals), NFAC came to her notice only as on 12.07.2022, therefore, delay was involved in filing of the present appeal. The Ld. Departmental Representative (for short ‘DR’) did not raise any objection to the seeking of condonation of the delay by the assessee applicant. After hearing the parties, I am satisfied with the reasons leading to the delay and condone the same.
Succinctly stated, the assessee had e-filed her return of income for the assessment year 2017-18 on 30.07.2017, declaring an income of Rs.2,98,250/-. Case of the assessee was, thereafter, selected for limited scrutiny u/s. 143(2) of the Act for examining the cash deposits made in her bank account during the demonetization period”.
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During the course of the assessment proceedings, it was observed by the A.O that the assessee had during the demonetization period deposited an amount of Rs.1,50,000/- on 10.11.2016 and Rs. 9 lacs on 17.12.2016 in her SB account No.53038973268 maintained with SBI Bank, Brach : Janjgir. As per the details gathered by the A.O under Sec. 133(6) of the Act from the bank, the assessee had during the year in old Specified Bank Notes (SBN) i.e. high demonetized notes of Rs.1000/- and Rs.500/- made cash deposits of Rs.10.50 lac in his bank a/c in two tranches i.e on 10.11.2016 and 17.11.2016. On being queried, it was initially claimed by the assessee that the aforesaid amounts were deposited out of the funds received from the debtors prior to 08.11.2016. It was the claim of the assessee that as the aforesaid amount due to demonetization could not be deposited in bank, therefore, the same were deposited during the subsequent period. It was observed by the A.O that the assessee had during the year under consideration made total cash deposits of Rs.10.80 lacs in her bank a/c, wherein an amount of Rs.30,000/- was made during the period 01.04.2016 to 08.11.2016, while for the balance amount of Rs. 10.50 lacs was deposited during the demonetization period. Shifting from her earlier explanation, it was now the claim of the assessee that the aforesaid cash deposits were sourced out of her multi facet vocations, viz. mehendi services,
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rangoli services, tuitions to students and interest income received on petty advances. However, the aforesaid explanation of the assessee did not find favour with the A.O. Considering the fact that the assessee had during the pre-demonetization period made a cash deposit of Rs.30,000/- only in her bank account, the A.O was of the view that in case the assessee had funds to the extent as was claimed by her available during the said period, then the same in all probabilities would have been deposited by her in the bank account. Also, the A.O did not find favour with the claim of the assessee of having opening cash in hand of Rs.11,82,757/- available with her on 01.04.2016. It was further observed by the A.O that though there was no change in the nature of income earned by the assessee as was declared by her in her returns of income for A.Y.2016-17 and A.Y.2017-18, but strangely there was 677 % increase in cash deposits in her bank account during the year under consideration. The A.O in the backdrop of the aforesaid fact, thus, was not inclined to accept the assessee’s explanation as regards the source of cash deposits in her bank account. Considering the totality of the facts involved in the case before him, the A.O was of the view that the assessee had failed to come forth with any plausible explanation as regards the nature and source of the cash deposits in her bank account during the demonetization period, i.e, 09.11.2016 to
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30.12.2016. Although the A.O in all fairness accepted the assessee’s claim qua the cash deposit of Rs. 1.50 lac in SBN made on 10.11.2016, but at the same time held the source of the cash deposit of Rs.9 lacs on 17.11.2016 in SBN as her unexplained money u/s.69A of the Act. Accordingly, the A.O vide his order passed u/s. 143(3), dated 20.12.2019 determined the income of the assessee at Rs.11,98,250/-.
Aggrieved the assessee carried the matter in appeal before the CIT(Appeals). Considering the fact that Indian wives habitually keep cash at home, the CIT(Appeals) drawing support from the CBDT Instruction No.03/2017 dated 21.02.2017, and placing reliance on the order of the ITAT, Agra in the case of Smt. Uma Agarwal Vs. ITO, ITA No.35/Agr/2021, dated 18.06.2021 scaled up the availability of cash in hand with the assessee to an amount of Rs.3 lacs, and thus restricted the addition made by the A.O u/s.69A of the Act to an amount of Rs. 7.50 lacs.
The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before me.
I have heard the ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material
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available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions.
The Ld.AR took us through the facts of the case and relied on the CBDT Instruction No. 03/2017 dated 21.02.2017. It was averred by the Ld. AR that the assessee who is a 34 years old women deriving income from various streams, viz. providing mehendi services, rangoli services, tuitions to students etc. for the last many years, had deposited an amount of Rs. 10.50 lacs in her bank account out of the income deriving during the year under consideration, as well as out of her past savings that was generated over the years. It was the claim of the Ld. AR that both the lower authorities had grossly erred in brushing aside the aforesaid factual position and held/partly held the amount of cash deposits as her unexplained income for the year under consideration. Ld. A.R in order to fortify his aforesaid contention, had drawn support from the fact that the assessee had consistently in the past regularly been filing her returns of income, disclosing her multi-facet sources of income. My attention was drawn by the Ld. AR to the copies of returns of income for the aforementioned preceding years, Page 3 to 15 of APB. It was further submitted by the Ld.AR that as the cumulative returned income of
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the assessee for the aforesaid years aggregated to an amount of Rs.25.40 lacs, therefore, the availability with her of cash-in-hand of Rs.10.50 lacs that was deposited in the bank account during the year under consideration could safely be related to her past savings. The Ld. AR in order to support his aforesaid contention had relied on certain judicial pronouncements, Page 1 to 46 of APB. On the basis of his aforesaid contention, it was the claim of the Ld. AR that as the availability of the cash-in-hand could justifiably be related to her past savings and current years income, therefore, the CIT(Appeals) had grossly erred in sustaining an addition of Rs.7.50 lacs (out of cash deposit of Rs.10.50 lacs) by dubbing the same as the unexplained money of the assessee u/s.69A of the Act.
Per contra, the Ld. DR relied on the orders of the lower authorities. It was submitted by the Ld. DR that though the assessee had failed to substantiate on the basis of irrefutable documentary evidences the source of the cash deposit of Rs.10.50 lacs, however, the CIT(Appeals) had acted in all fairness and restricted the addition to Rs.7.50 lacs.
After having given a thoughtful consideration to the issue in hand, I am unable to persuade myself to subscribe to the contentions advanced by the Ld. AR. Admittedly, it is a matter of fact that the
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assessee had over the year under consideration, during the demonetization period made a cash deposit in SBN of Rs.10.50 lac in her SB account No.53038973268 with SBI Bank, Branch: Janjgir, i.e., an amount of Rs.1.50 lacs on 10.11.2016 and Rs.9 lacs on 17.11.2016. Although the A.O had held the cash deposit made on 10.11.2016 of Rs.1.50 lac in SBN as having been sourced by the assessee out of her disclosed sources, but held the cash deposit made on 17.11.2016 of Rs.9 lac in SBN as her unexplained money u/s 69A of the Act. On appeal, the CIT (Appeals) in all fairness restricted the addition to an amount of Rs.7.50 lacs. Although it is the claim of the Ld. AR that now when the assessee had regularly been filing her returns of income for A.Y.2004-05 to A.Y 2016-17, therefore, the availability of cash-in-hand to the extent of Rs. 10.50 lac (supra) deposited by her during the year in bank would not call for any adverse inferences in her hand, however, the same does not find favour with me. Admittedly, there is no denying the fact that the assessee had consistently filed her returns of income from A.Y.2004- 05, but considering the miniscule income returned by her over the years, it can safely be concluded that not much of funds during the year under consideration would have been available with her by way of savings. Considering the aforesaid facts, I am of a strong conviction that the CIT(Appeals) had adopted a fair approach and
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concluded that cash-in-hand of Rs.3 lac could safely be held to be available with the assessee for explaining the source of cash deposits in her bank account. Nothing is either discernible from the orders of the lower authorities nor brought to my notice, which would irrefutably evidence the availability of past savings a/w current year savings to the extent of Rs.10.50 lac as had been vehemently claimed by the Ld. AR before me. Also, the CBDT Instruction No.03/2017 dated 21.02.2017 would not assist the claim of the Ld. AR. On the contrary, the aforesaid CBDT Instruction No.03/2017 (supra) provides that though no further verification would be required if the total cash deposits is upto Rs.2.50 lac, but the amount above the said cut off limit would require verification to ascertain whether the same had been explained or not. Considering the fact that the assessee had failed to discharge the onus that was cast upon her as regards substantiating to the hilt that the cash deposits in her bank account were made out of explained sources, therefore, I find no reason to dislodge the view taken by the CIT(Appeals), who in all fairness had rightly sustained the addition to the extent of Rs.7.50 lacs made by the A.O u/s.69A of the Act.
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In the result, appeal of the assessee being devoid and bereft of any merit is dismissed in terms of the aforesaid observations.
Order pronounced in open court on 23rd day of November, 2022. Sd/- (रवीश सूद/RAVISH SOOD) �या�यक सद�य/JUDICIAL MEMBER
Raipur; �दनांक / Dated : 23rd November, 2022 ***SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals), Raipur (C.G.) 4. The Pr. CIT, Raipur (C.G.) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, / DR, ITAT, “SMC” Bench, Raipur. गाड� फ़ाइल / Guard File. 6.
आदेशानुसार / BY ORDER, // True Copy // �नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण,/ ITAT, Raipur