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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
The captioned appeal is filed by the assessee against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 09.02.2023for Assessment Year: 2012-13.
Pawan Kumar Mahajanv. ITO 2. The assessee has raised the following grounds of appeal:
“1. That proceedings initiated u/s 147 by the AO and confirmed by the CIT(A) is bad in law.
That the ld.CIT(A) National Faceless Appeal Centre has erred in confirming the addition of Rs.350000 made by the AO being the amount deposited by the assessee in the bank by treating the same as unexplained cash.
That both the Id.AO as well as CIT(A) have erred in law and on facts in rejecting the submissions made by the assessee along with necessary evidence in support of source of deposit of cash in bank.
That the ld.CIT(A) National Faceless Appeal Centre has erred in law and on facts in holding that submissions filed by AR are not tenable as no supporting documents was filed ignoring the fact that all the bank accounts of the assessee as well as spouse were produced along with Fund Flow Statement in support of source of deposit of cash of Rs.350000.
That the order framed by CIT(A) National Faceless Appeal Centre is bad in law andon facts.
6. That the appellant craves leave to add or amend the ground of appeal before the appeal is heard and disposed off.”
3. The assessee is an employee of State Bank of India. During the year under consideration, he made cash deposit of Rs. 3,50,000/- in its Bank A/c during the demonetization period. The AO was not satisfied with the explanation furnished by assessee regarding the source of said cash deposit. Accordingly, the AO has made the addition as unexplained cash to the return income of the assessee.
Pawan Kumar Mahajanv. ITO 4. The ld. CIT(A) has confirmed the addition by observing vide para 5.2 of the impugned order.
“5.2 I have considered the facts of the case, assessment order and the submission filed. The submission filed by the A/R for the appellant is not tenable because during the course of assessment proceedings and the appellate proceedings the A/R for the appellant did not produce any supporting documents in this regard and the money was deposited by the appellant in cash at bank which remains unexplained. The submission filed by the A/R for the appellant general in nature. Accordingly, the addition made by the AO of Rs.3,50,000/- is held to be justified and the same is sustained. The appellant fails on this ground.”
5. Being aggrieved with the appellate order of the CIT(A), he has filed this appeal before us. The Ld. AR for the appellant submitted that both the Id.AO as well as CIT(A) have erred in law and on facts in rejecting the submissions made by the assessee along with necessary evidence in support of source of deposit of cash in bank and that the ld.CIT(A) National Faceless Appeal Centre was wrong on facts in holding that submissions filed by AR are not tenable as no supporting documents was filed ignoring the fact that all the bank accounts of the assessee as well as spouse were produced along with Fund Flow Statement in support of source of deposit of cash of Rs.350000. The AR file a brief synopsis which reads as under:
“11. It may be mentioned here that even during the demonetization also the Govt had announced that no question shall be asked for deposit upto Rs.250000 in the bank account by an individual being out of their savings.In this case all the funds of the husband and wife were joint and the amount deposited represents
Pawan Kumar Mahajanv. ITO funds of both the husband and wife hence the amount of rs.350000 is within the limits prescribed by the Govt. during demonetization period being the norm of Indian households as it was reasonable to accept saving of difference members of house hold out of their past savings.
The assessee had filed his return of income for R.641620 and wife also was a regular income tax assessee.
We are enclosing herewith the copy of bank statement of appellant wife Anita Mahajan for the period from 1.4.2010 to 31.3.2011 with Hindu Co-operative Bank. From the perusal of this account it will be appreciated that there are cash withdrawls of Rs.385000 from 30.4.2010 to 23.4.2011. The major part of her withdawls were lying as saving in the house which were redeposited in the bank.
Similarly, we are enclosing herewith copy of appellant's bank account with State Bank of India A/c No. 11404461452 from 1.12.2010 to 31.3.2011. From the perusal of this account will be observed that on 22.3.2011 the assessee had withdrawn Rs.210000 from Bank out of which Rs. 120000 was re-deposited on 25.3.2011 and balance of Rs.90000 was available with him for redeposit as on 1.4.2011. Similarly the assessee had withdrawn a sum of Rs.20000 on 19.2.2011 out of his saving bank account 271 with State Bank of India which was available for redeposit. Thus the appellant had following amounts available with him for redeposit which can directly be co-reiterated with the redeposit.
i) Withdrawals made by Anita Mahajan from bank from 30.4.2010 to 23.4.2011 Rs.385000 ii) Net Withdrawal by the appellant out of Bank account No.4461452 Rs.90000 iii) Withdrawal on 19..2.201 out of Saving A/c No.271 Rs.20000 ------------- Rs.495000
Keeping in view the financial status of the appellant and his wife the deposit of rs.350000 in the bank is very nominal and no addition was called for.
Pawan Kumar Mahajanv. ITO 16. We may mention here that the AO did not allow any allowance for the past saving in hand but made the addition of whole amount of Rs.350000.”
Park Contra, the learned dear stands by the impugned order.
We have heard both the sides, perused the material on record and the impugned order. Admittedly, the appellant has deposited cash amounting to Rs.3,50,000/- in his bank accounts during the demonetization. We know that as argued by the Ld. AR that the Govt had announced as a policy decision that no question shall be asked for deposit upto Rs.250000 in the bank account by an individual being out of their savings. In this case, appellant claimed that all the funds of the husband and wife were joint and the amount deposited represents funds of both the husband and wife and after giving the relief of rupees 2,50,000 as per Government policy as above, the balance amount remains of Rs. 1,00,000/-only. In our view, as per the norm of Indian households, it is reasonable to have cash of Rs. 1,00,000/- at home over and above to Rs. 2,50,000 as being exempted for an individual lay member towards Stridhan as per norms of Government policy as above. Further, the small amount of cash deposit of Rs.3,50,000in the bank account the appellant is explained with the support of the cash flow statement and bank statements before the Pawan Kumar Mahajanv. ITO authorities below. In our view, the CIT(A) failed to appreciate the merits of the case and the evidence produced before him on the record in the form of bank statement and cash flow statement which are self-explanatory.
In view of about discussion, we hold that the decision of the learned CIT appeal suffers from perversity and infirmity to the facts on record.
Accordingly, the impugned order is set aside and the addition of Rs. 3,50,000 is deleted.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 30.08.2023