Income Tax Appellate Tribunal - Amritsar
Inderjit Kaur , Malout Distt Muktsar vs Ito Ward Ii(2) Muktsar, Muktsar on 22 July, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH, AMRITSAR.
BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER
AND SH. UDAYAN DAS GUPTA, JUDICIAL MEMBER
I.T.A. No.130/Asr/2024
Assessment Year: 2011-12
Mrs. Inderjit Kaur W/o Jaswant Vs. ITO-Ward II-(2),
Singh Mann VPO Deon Khera Muktsar.
Via Tappa Khera Tehsil Malout
Distt. Muktsar. (Respondent)
[PAN:BZAPK5295F]
(Appellant)
Appellant by Sh. Ashwani Kalia, CA
Respondent by Sh. Radhey Shyam Jaiswal, Sr.
DR
Date of Hearing 14.05.2024
Date of Pronouncement 22.07.2024
ORDER
Per: Udayan Das Gupta, JM This appeal is filed by the assessee against the order of CIT (A) NFAC, dated 25/01/2024, passed u/s 250, of the Act 61, which has arisen out of the assessment order passed u/s 143(3)/147 of the Act 61, dated 28/12/2018, by the AO, Ward -II (2) Muktsar.
2. The grounds raised by the assessee in this appeal are as under:
I.T.A. No.130/Asr/2024 Assessment Year: 2011-12 2 "1 That the Id. CIT(A) NFAC Delhi has erred in law and on facts in confirming the addition of Rs.28,45,000 being the amount of cash deposited by the appellant in the bank which was treated as unexplained money u/s 69A of the Act by the AO. 2 That the Id.CIT(A) NFAC Delhi has erred in law and on facts in confirming the addition of Rs.28,45,000 made by the AO by invoking the provisions of section 69A in complete defiance of the provisions of the law since the invocation of section 69A to the facts of the case was absolutely wrong and bad in law.
3 That the Id.CIT(A) NFAC Delhi has erred in law in confirming the addition of Rs.2845000 by summarily rejecting the assessee's submissions as well as various case laws cited by the assessee in support of her submissions without distinguishing the same.
4 That the order of the Id.CIT(A) is bad in law and on facts.
5 That the appellant craves leave to add or amend the ground of appeal before the appeal is heard and disposed off."
3. The appellant has taken five grounds of appeal as per annexure attached to the memorandum of appeal in Form 36, and the entire appeal revolves around one single issue, cash deposited by the assessee in the month of October 2010 in saving bank account no. 1339000100044018 amounting to Rs.28,45,000/-.
I.T.A. No.130/Asr/2024 Assessment Year: 2011-12 3
4. Brief facts of the case are that the assessee has deposited amount of Rs.28,45,000/- in her bank account no. 1339000100044018 in Punjab National Bank, the source of which needs to be explained.
5. As per AO the source of deposit in bank Punjab National Bank a/c no. 44018could not be explained satisfactorily by the assessee and as such the same has been added back as unexplained money u/s 69A of the Act.
6. The initial answer of the assessee was that the amount has been deposited in bank by her son Mr. Deepender Singh out of withdrawals in cash from his personal account no. 44027 Punjab National Bank (the son is a joint holder with mother). It was observed by the AO that the son of the assessee has withdrawn an amount of Rs.18,56,000/- from his bank account during the period September 2008 to January 2009 but he has also deposited an amount of Rs.47,70,440/- in his own Punjab National Bank account no. 44027 during the period from June 2009 to October 2010. When this aspect was put before the assessee, the assessee subsequently retracted her reply and stated that she had withdrawn an amount of Rs.62,28,000/- from her bank account at Punjab National Bank, Account No. 1339000100058756 which according to the AO, is obtained against F.D. pledge by her close relatives Mr. Swaran Singh and Mr. Baldev Singh during the period January 2008 to October 2008 and out of the said amount, the amount of Rs.28,45,000/- has been re deposited in her bank account.
I.T.A. No.130/Asr/2024 Assessment Year: 2011-12 4 6.1 She further explained that the amount of Rs.62,28,000/- was withdrawn for the purpose of purchase of an agricultural land but since no suitable land was found and the purchase never materialized a part of the said amount has to be re- deposited in the bank. During the course of assessment proceedings, it is seen that the AO has made inquiries and verification and has brought on record the fact that an amount of Rs.22 lac has been paid to Mr. Swaran Singh and Baldev Singh, relatives of assessee and further an amount of Rs. 13 lacs have also been deposited in her bank account on 8th August 2009.
6.2 The main thrust of the argument of the ld. AR was that the out of total cash withdrawal of Rs.62,28,000/- made by the assessee even if it is accepted that an amount of Rs.13 lac plus Rs.22 lacs totaling Rs.35 lacs has been utilized by the assessee, the remaining balance of Rs.27,75,000/- will remain with the assessee for making the cash deposit in her bank account in the month of October 2010 which is the main issue in this case, and as such the source of deposit stands explained. 6.3 As such, he prayed that the addition made u/s 69A is not legally justified and the said addition may please be deleted.
7. The matter was carried in first appeal before the ld. CIT(A) and the ld. CIT(A) due to written reason contained in his appellate order has dismissed the appeal by observing as follows:
I.T.A. No.130/Asr/2024 Assessment Year: 2011-12 5 "4.1 I have considered the submission of the appellant and perused the relevant assessment records. In the instant case, reopening of assessment has been made u/s 143(3)/147/ of the Act on the information that the assessee has made cash deposit in a bank of Rs.28,45,000/-. During the year under assessment, the assessee has made cash deposit of Rs.28,45,000/- as per the assessment order. Since the appellant failed to justify the source of such cash deposit to the satisfaction of the AO, the AO added back the entire amount of Rs.28,45,000/- to the total income of the appellant as unexplained money u/s 69A of the Act.
4.2 During the course of appellate proceedings, the appellant argued that she had withdrawn a sum of Rs.62,28,000/- from her account with Punjab National Bank, Account No. 1339000100058756 in Jan/Feb 2008 for purchase of agricultural land which was not materialize and amount withdrawn was kept at appellant's house. The appellant further argued that she deposited the sum of Rs.28,45,000/- in her bank account no. 1339000100044018 after a gap of 30/31 months. The appellant further argued that she had agricultural income of Rs.16,30,125/- which was also deposited in her bank account. The AO in his assessment had stated that cash has been withdrawn by Swaran Singh and Baldev Singh through the bank account of the appellant. The appellant stated that Sh.
Baldev Singh and Sh. Swara Singh are closely relatives and have allowed to use the funds of FDR's. The appellant I.T.A. No.130/Asr/2024 Assessment Year: 2011-12 6 reiterated the facts that the AO has merely rejected the explanation of the appellant without leading any evidence to show that the amount withdrawn by the appellant from savings bank account was utilized by her elsewhere during 30/31 months.
4.3 I have considered the submission of the appellant and cash laws cited by the appellant which has duly perused. I am inclined to concur with the views of the AO that the amount of cash deposits amounting to Rs.28,45,000/- reflects the circulation of the undisclosed income of the appellant. The appellant state and submit that it often deposited cash in the bank account and subsequently withdrawn such cash from bank account for utilized elsewhere. The AO in assessment order has made out the case that the keeping of cash by the appellant at home most probably is a cooked-up story and that why the appellant kept this amount of cash at home for so long rather than depositing the same in Bank FDR's and earned interest income, is not convincing explained. Therefore, the situation of cash recycle in the bank account cannot be ignored. Hence, I find merit in the order passed by the AO and therefore do not see convincing reasons to interfere with it. Accordingly, the appeal is hereby dismissed.
5. In the result, the appeal dismissed."
8. Now, the assessee is in appeal before the Tribunal against the said addition of Rs.28,45,000/-. In course of hearing before the Tribunal the assessee has filed I.T.A. No.130/Asr/2024 Assessment Year: 2011-12 7 written submissions by way of rebuttal to the observation of the ld. CIT(A) which is reproduced as under:
"1. It was explained before the AO as well as CIT(A) that the amount was by the appellant for the purposes of buying agricultural land.
2. However, since no suitable deal could materialize the amount withdrawn -remained with the assessee at home. Ultimately she deposited amount of Rs.28,45,000 remaining with the assessee in her bank account.
3. It is not that she deposited whole of Rs.62,28,000 in her bank account which was withdrawn by her earlier. The AO has himself given the detail of the amount earlier used by the assesse. It was only the balance with her which was redeposit in the bank.
4 The amount earlier utilized by the appellant as confirmed by the AO is detailed as under:-
i) 24.1.2008
Deposit in saving bank account 13,00,000
ii) 8.8.2008 Amount deposited by Swam Singh and Baldev Singh in Loan A/c against FDR 22,00,000 35,00,000 5 Thus even after the utilization of amount of Rs.35,00,000 the assessee had surplus of Rs.27,75,000 as cash in hand (62,50,000-35,00,000) which was deposited by the assessee in her bank account. 6 In addition to above the assessee had huge earning from agriculture income every year as the total land holding was 217 Kanai 07 Marla from which there was income of Rs.15,00,000 (approx.) per annum.
I.T.A. No.130/Asr/2024 Assessment Year: 2011-12 8
7. Thus the total deposit of Rs.28,50,000 in the bank get fully justified and no addition is called for.
8. The CIT(A) had confirmed the addition only on the ground that period of holding of cash was not justified by the assessee.
9. In rebuttal to above it is submitted that the assessee and her family are pure agriculturist having no other source of income.
10. It is also a fact that people in the villages, being agriculturist, do not maintain any books of account or record and were not very methodical about their financial affairs and it was not something strange for them to keep money at their homes.
11 Moreover, it was explained by the assessee both to the AO as well as CIT(A), that amount was withdrawn by the assessee for the purposes of purchase of agriculture land but since no suitable deal matured as a result the amount remained unutilized and remained with the assessee at home. The assessee was trying regularly to find a suitable land deal during all this period and ultimately the amount remaining with the assessee was deposited in the bank which was only Rs.28,45,000.
12 No other source of income was found by the AO from where the above amount could have accrued to the assessee. Nor the AO has pointed out that the amount was utilized any where else. The assessee was left with the amount which was deposited in the bank after utilizing the amounts as pointed out by the AO.
13. The AO has not pointed out any trail of money to hold that the amount was utilized by the assessee elsewhere. When the AO is duly accepting that the amount of Rs.35,00,000/- was utilized by the assessee out of cash withdrawals of Rs.62,50,000/- then how can he deny that the balance I.T.A. No.130/Asr/2024 Assessment Year: 2011-12 9 amount of Rs.28,50,000 deposited by the assessee in the bank was not available with her.
14. The appellant had duly explained the reasons for the long period of holding of cash in hand."
9. Further the ld. AR, relied upon the decision of Hon'ble Punjab & Haryana High Court in the case of Shiv Charan Dass vs CIT 126 ITR 263 (P & H). Apart from the above the ld. AR further relied upon the following decision of the Coordinate Bench of the Tribunal:
i. Baldev Raj Charla & Ors ITAT, Delhi Benches IT (SS) A Nos. 92 to 95/Del/2007 ii. Mrs. Deepali Sehgal ITAT, Delhi Bench ITA No. 5660/Del/2012 iii. Navdeep Singh in ITA No. 25/Asr/2013, Amritsar Bench iv. Inderpal Singh Ahuja in ITA No. 132/Asr/2006, Amritsar Bench v. R. K. Dave 94 TTJ (2005) Jodhpur Bench 19.
10. The ld. DR vehemently argued and relied on the order of the ld. CIT(A).
11. We have heard both the parties and perused the material available on record. We find that the assessee in this case had initially tried to explain the deposits in her bank account out of withdrawals from her son's bank account.
12. Later on, on being confronted by the ld. AO, she retracted her reply and disclosed the fact that an amount of Rs.62,28,000/- has been withdrawn by her from Punjab National Bank, Account No. 1339000100058756 during the year 2008 as per Bank Certificate. She further explained that a part of the said amount I.T.A. No.130/Asr/2024 Assessment Year: 2011-12 10 has been utilized by her for the purpose of deposit in her saving bank account and also for the purpose of deposit in the bank account of Mr. Swaran Singh and Mr. Baldev Singh and the remaining balance was retained by her and has been subsequently re-deposited in her bank account No. PNB 44018 in the year October 2010 amounting to Rs.28,45,000/-, which is the main issue in this case, and according to her the said deposited amount stand explained. 12.1 We are of the opinion that the assessee has stated different explanations at different times, and which one of the statement is true is very difficult us to judge. The observation of the AO in the assessment order regarding date wise cash withdrawn and deposits are summarized in a tabular form for better understanding. Summary of Deposits and Withdrawals in CASH made by the Assessee and her son , as narrated in the assessment order:
Assessee Bank A/c by Assessee :
Deposit / Repayments Amount withdrawn A/c xxxxxx 0058756 by Assessee:
9th January 2008 700,000.00 24th January 2008 1,700,000.00
18th January 2008 2,200,000.00 24th January 2008 500,000.00
15th February 2008 2,500,000.00 8th August 2009 1,300,000.00
24th May 2008 684,000.00
30th October 2008 144,000.00
6,228,000.00 3,500,000.00
Cash Drawn by son Mr Deependra Singh
Deposit by son
Son A/c No 44027 PNB
Deepender Singh
5th Sept 2008 500,000.00 20th June 2009 150,000.00
8thSept 2008 600,000.00 17th July, 2009 350,000.00
27th Jan 2009 56,000.00 24th July, 2009 100,000.00
30th Jan 2009 700,000.00 28th July 2009 1,300,000.00
1,856,000.00 31st july 2009 1,400,000.00
I.T.A. No.130/Asr/2024
Assessment Year: 2011-12 11
12th October 2010 950,000.00
4,250,000.00
Deposit by Assessee in
her account
Assessee A/c : No:
xxxx00044018
12/10/2010 950,000.00
13/10/2010 900,000.00
23/10/2010 995,000.00
2,845,000.00
12.2 Considering all aspects of the matter, we find it proper and reasonable to sent the matter back to the file of the ld. AO to examine the aspect as to whether the assessee had sufficient funds available as on October 2010 with her after considering the deposits and repayment already made by her. 12.3 If it is found that the cash withdrawn by the assessee is not utilized by her for making any payment, or for making any investment, or otherwise then the benefit of the unutilized amount may be allowed to the assessee for covering the bank deposit in the month of October 2010 in A/c No. 44018.
13. As such, the assessee is directed to appear before the AO and cooperate in explaining her bank deposits. The assessee will get a reasonable opportunity of being heard and the appeal is allowed for statistical purposes as per terms indicated above.
I.T.A. No.130/Asr/2024 Assessment Year: 2011-12 12
14. In the result, the appeal of the assessee bearing ITA No. 130/Asr/2024 is allowed for statistical purposes.
Order pronounced in the open court on 22 .07.2024 Sd/- Sd/-
(Dr. M. L. Meena) (UDAYAN DAS GUPTA)
Accountant Member Judicial Member
AKV
Copy of the order forwarded to:
(1)The Appellant
(2) The Respondent
(3) The CIT
(4) The CIT (Appeals)
(5) The DR, I.T.A.T.
True Copy
By order