Income Tax Appellate Tribunal - Chandigarh
Mrs. Gurtej Kaur vs Income Tax Officer on 8 July, 2004
Equivalent citations: (2006)99TTJ(CHD)443
ORDER
N.K. Saini, A.M.
1. This is an appeal by the assessee against the order of CIT(A) dt. 4th Oct., 2000. The only effective ground raised in this appeal reads as under:
2. That the learned CIT(A) has erred in treating the deposit of Rs. 50,000 on 27th April, 1994 as unexplained investment.
2. The facts of the case, in brief, are that during the assessment proceedings, the AO noticed that the assessee had deposited a sum of Rs. 50,000 on 27th July, 1994 with M/s Golden Forest Ltd. He asked the assesaee to file the evidence as regards to the source of deposit. The assessee explained that the amount was deposited out of maturity deposit of earlier FDR. It was stated that the money was deposited out of the refund of Rs. 50,000 received in cash on 27th July, 1993. An affidavit dt. 21st Nov., 1997 was also filed stating therein that the assessee took refund of Rs. 50,000 from M/s Golden Forest Ltd. on 27th July, 1993 in cash and the same was kept at home for personal use and was reinvested on 27th July, 1994. A cash flow statement was also filed to justify the claim. The AO did not find any merit in the explanation of the assessee and also found that in the cash flow statement the amount lying in the bank had not been mentioned. The AO also asked the assessee to produce the copy of bank account. However, the assessee did not comply with the direction of the AO. The AO also made efforts to collect the information from M/s Golden Forest Ltd. regarding the receipt of Rs. 50,000 in cash and deputed one Inspector to collect the information from company's office. It was informed that all the refunds on maturity were repaid by cheque only. The AO considered the amount of Rs. 50,000 as unexplained investment and made the addition.
3. The assessee carried the matter to the CIT(A) and reiterated the submission made before the AO. It was stated that the assessee was 85 years old and was living alone as her sons were posted out of Chandigarh, therefore, the amount of Rs. 50,000 was kept at home for her personal welfare and medical purposes. The learned CIT(A) after considering the submission of the assessee observed that the assessee could not give any convincing explanation for keeping the amount at home when she was maintaining bank account. She, therefore, confirmed the addition made by the AO.
4. Now the assessee is in appeal. Before us, the learned counsel for the assessee reiterated the submission made before the authorities below and also stated that there was no bar to have the cash at home and the amount in question had been deposited by the assessee out of the earlier FDR which malured on 27th July, 1993. Reliance was also placed on the following cases:
(i) CIT v. Smt. P.K. Noorjahan
(ii) 'S.R. Venkata Ratnam v. CIT
5. In his rival submission, the learned Departmental Representative strongly supported the orders of Tax Authorities below and stated that the assessee miserably failed to furnish any evidence as regards to the source of deposit with M/s Golden Forest Ltd. He vehemently argued that the assessee was maintaining the bank account but the amount was not deposited in the bank, so, it was not believable that the amount in question had been kept in cash at home.
6. We have considered the rival submissions and the material available on records. In the instant case, it is noticed that the only explanation given by the assessee was that the amount deposited on 27th July, 1994 was out of the maturity of the FDR with M/s Golden Forest Ltd. on 27th July, 1993. It is also noticed that when the inspector enquired from M/s Golden Forest Ltd., it was informed that the maturity amount is paid by cheque. From the above, it would be clear that there was no merit in this contention of the learned counsel for the assessee that the amount was kept at home for one year, i.e., from 27th July, 1993 to 27th July, 1994 and was deposited later on. Considering the totality of the facts, we are of the view that the assessee could not explain the source of investment made by her. Therefore, the AO was justified in making the addition and the learned CIT(A) rightly confirmed the same. As regards to the case laws relied upon by the learned counsel for the assessee, the facts involved therein are different from the facts of the assessee's case. In the case of S.R. Venkata Ratnam v. CIT (supra), the Hon'ble Karnataka High Court held that, "once the petitioner disclosed the source of Rs. 15,000 as having come from the withdrawal made on a given date from a given bank, it was not for the ITO or the Commissioner to concern themselves with what the petitioner did with that money, i.e., whether he had kept the money in his house or deposited the same in a bank." However, in the instant case, the assessee could not give any evidence that the amount in question had been withdrawn in cash from the company, M/s Golden Forest Ltd. on 27th July, 1993 particularly when the assessee stated that the amount had been withdrawn in cash and the employees of the concerned company informed that the repayment was made by cheque only. Similarly, in the case of CIT v. P.K. Nooijahan (supra), the Hon'ble Supreme Court held that "in the corresponding clause of the Bill which was introduced in Parliament, while inserting Section 69 in the IT Act, 1961, 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 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 of the Act 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.
7. From the above, it would be clear that no addition should be made under Section 69 of the IT Act when the explanation offered by the assessee is found to be satisfactory and if the explanation offered by the assessee is found to be not satisfactory then the AO can make the addition. In the instant case, the explanation offered by the assessee was that the amount in question had been received by her in cash on 27th July, 1993 from M/s Golden Forest Ltd. However, the staff of that company informed the Inspector deputed by the AO that on maturity the repayment was made by cheque only. Therefore, the explanation of the assessee was not satisfactory. In other words, the assessee could not explain the source of investment, i.e., the investment made with M/s Golden Forest Ltd. on 27th July, 1994. Therefore, the AO rightly made the addition in the hands of the assessee on account of unexplained investment and the learned CIT(A) was fully justified in confirming the addition. We, therefore, decline to interfere with the finding of learned CIT(A).
8. In the result, the appeal of the assessee is dismissed.