DHARAMDATT SHIVSHANKAR PATHAK L/H. LATE RAJESHWARIDEVI DHARAMDATT PATHAK,SURAT V. INCOME TAX OFFICER, WARD-3(2)(8), SURAT

ITA 285/SRT/2024

AI Insights

The case involves an appeal by Dharamdatt Shivshankar Pathak, the legal heir of Late Rajeshwaridevi Dharamdatt Pathak, against the order of the National Faceless Appeal Centre, Delhi, which upheld the addition of Rs. 14.44 lacs to the assessee's income for the Assessment Year 2017-18. This addition was made on account of cash deposits during the demonetization period, taxed under Section 115BBE of the Income Tax Act, 1961. The Tribunal considered the submissions that only Rs. 9,79,000 was actually deposited during the demonetization period and that the assessee had substantial cash balances from business activities, which were consistently reported in income tax returns. The Tribunal also noted the assessee's status as a senior citizen, eligible for a cash deposit benefit of up to Rs. 5.00 lacs as per CBDT Circular No. 3/2017.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 33932 (ITAT-SURAT)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 15-03-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 285/Srt/2024 (Assessment Year 2017-18) (Physical hearing) Dharamdatt Shivshankar Pathak, Legal Heir of Late Rajeshwaridevi Dharamdatt Pathak, D/70, Vishal Nagar Society, Dharam Nagar Road, A.K. Road, Surat-395008 (Gujarat) PAN No. AIRPP 5933 G Vs. I.T.O., Ward 3(2)(8), Surat, Income Tax Office, Anavil Business Centre, Adajan Hazira Road, Adajan, Surat, Gujarat-395007. Appellant/ assessee Respondent/ revenue Assessee represented by Shri P M Jagasheth, CA Department represented by Shri Ravish Bhatt, Sr.DR Date of Institution of Appeal 18/03/2024 Date of hearing 11/11/2024 Date of pronouncement 28/11/2024 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the legal heir of the deceased assessee i.e. Rajeshwaridevi Dharamdatt Pathak (appellant), is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals), (in short, the ld. CIT(A)) dated 29/01/2024 for the Assessment year (AY) 2017-18. The appellant has raised multiple grounds of appeal, however, sole ground of appeal relates to making addition of Rs. 14.44 lacs on account of cash deposit during demonetization period and taxing the same under Section 115BBE of the Income Tax Act, 1961 (in short, the Act). 2. Rival submissions of both the parties have been heard and record perused. At the outset of hearing, the learned Authorised Representative (ld. AR) of ITA No. 285/Srt/2024 Dharamdatt Shivshankar Pathak,L/H-Late Rajeshwaridevi Dharamdatt Pathak Vs ITO 2 the appellant submits that during demonetization period, the assessee has deposited only Rs. 9,79,000/-, such fact is accepted by the Assessing Officer in para 2 of assessment order. Though, there was total cash deposit during financial year was Rs. 14.44 lacs. The Assessing Officer made addition of entire cash deposit. The Assessing Officer has disregarded the fact that the assessee was engaged in the business and has offered income under Section 44AD of the Act. The Assessing Officer made addition of entire cash deposit during whole of financial year. The assessee was 62 years old and as per CBDT Circular No. 3/2017 being a senior citizen, was eligible for getting a benefit of cash deposit up to Rs. 5.00 lacs, he date birth of assessee is mentioned in ITR for A.Y. 2015-16 as of 10/06/1960. After passing assessment order, the assessee has died, during pendency of first appeal, copy of death certificate of assessee is filed at page No. 19 of paper book. The ld. AR of the appellant submits that the assessee was having sufficient cash balance out of business receipt. The assessee has shown cash in hand in return of income for A.Y. 2015-16 as Rs. 20,18,941/- and in A.Y. 2016-17 as of Rs. 23.92 lacs. Copy of return of income for AY 2015-16 and AY 2016- 17 is filed on record and relevant entry showing cash balances are shown at page No. 4 & 7 of paper book. Thus, the assessee was having sufficient cash available with him. Even in A.Y. 2017-18, the assessee was having cash in her hand as has been shown while filing return of income for A.Y. 2017-18 on 17/09/2017 as of Rs. 3,78,054/-. The ld. AR of the assessee submits that the assessee was engaged in the business activities and was consistently ITA No. 285/Srt/2024 Dharamdatt Shivshankar Pathak,L/H-Late Rajeshwaridevi Dharamdatt Pathak Vs ITO 3 showing sufficient cash balance in her return of income. The ld. AR of the assessee submits that no addition was warranted in her case, keeping in view the fact that the assessee was having sufficient cash balance in her hand and has no option except to deposit the entire cash available in her hand. The ld. AR of the assessee reiterated that only a sum of Rs. 7,97,000/- was deposited in the form of specified bank notes (SBN) yet, the Assessing Officer made addition of Rs. 14.44 lacs. 3. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the orders of the lower authorities. 4. We have considered the submissions of both the parties and have gone through the orders of the lower authorities carefully. It is not in dispute that during demonetization period, the assessee has deposited only Rs. 9,79,000/-, though, the Assessing Officer made addition of entire cash deposit during relevant financial year. It is also not in dispute that the assessee was engaged in the business activities and has offered income under Section 44AD. We also find that the assessee has consistently shown sufficient cash in hand while filing return of income for A.Y. 2015-16, the assessee has shown cash in hand of Rs. 20,18,941/- and in A.Y. 2016-17 the assessee has shown cash in hand of Rs. 23,92,298/- and even after during demonetization period, the assessee was having cash balance at Rs. 3,79,000/- on 31/03/2017 as has been shown in the return of income for A.Y. 2017-18. Considering the peculiar facts of the case that the assessee was a senior citizen and was having sufficient cash balance shown in the ITA No. 285/Srt/2024 Dharamdatt Shivshankar Pathak,L/H-Late Rajeshwaridevi Dharamdatt Pathak Vs ITO 4 various return of income, thus no addition on account of cash deposit was warranted in his case. Therefore, we direct the Assessing Officer to delete the addition. In the result, ground of appeal raised by the assessee are allowed. 5. In the result, this appeal of assessee is allowed. Order pronounced in the open court on 28th November, 2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 28/11/2024 *Ranjan Copy to: 1. Assessee – 2. Revenue - 3. CIT 4. DR 5. Guard File By order Sr. Private Secretary, ITAT, Surat "