DINESHBHAI CHHOTABHAI PATEL,VADODARA V. THE ACIT, CIRCLE INTERNATIONAL TAXATION, VADODARA

ITA 884/AHD/2023

AI Insights

The case involves an appeal by Dineshbhai Chhotabhai Patel against the order of the Commissioner of Income Tax (Appeals)-13, Ahmedabad, which sustained additions made by the Assessing Officer (AO) under section 69A of the Income Tax Act, 1961. The additions pertained to unexplained cash deposits totaling Rs. 21,93,000 in various bank accounts and additional amounts related to interest income and other unexplained credits. The assessee, a senior citizen residing in the USA, argued that the cash deposits were from legally declared foreign currency. The Tribunal, after reviewing the submissions and evidence, concluded that the assessee had adequately explained the sources of the deposits, leading to the allowance of the appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 33534 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 06-11-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVINDRA
• Assessee Lawyers: MANJISH J SHAH
• Keywords: Unexplained cash credit
• Section: 250; 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD ] ] BEFORE DR. BRR KUMAR, ACCOUNTANT MEMBER ITA No.884/Ahd/2023 Asstt.Year : 2017-18 Dineshbhai Chhotabhai Patel IB, Shevashram Society Bhnd Atma Jyot Ashram Ellora Park Vadodara 390 023. PAN : ALYPP 5251 F Vs ACIT, Cir.International Taxation, Vadodara. (Applicant) (Responent) Assessee by : Shri Manjish J Shah, Advocate Revenue by : Shri Ravindra, SR.DR सुनवाई क\t तारीख/Date of Hearing : 09/10/2024 घोषणा क\t तारीख /Date of Pronouncement: 09/10/2024 आदेश आदेश आदेश आदेश/O R D E R This is assessee’s appeal against the order of the ld.Commissioner of Income Tax (Appeal)-13, Ahmedabad dated 26.9.2023 for the Asst.Year 2017-18 passed under section 250 of the Income Tax Act, 1961 (“the Act” for short). 2. The assessee has raised the following grounds in the appeal against the impugned order of the ld.CIT(A). 1. The Learned C.I.T.(Appeals) has erred in law and on facts of the case, in sustaining addition U/S.69A of Rs.21,93,000/- on account of unexplained cash deposits in bank accounts. 2. The Learned C.I.T.(Appeals) has erred in law and on facts of the case, in not deleting addition of interest income from savings accounts of Rs.31,698/-. 3. The Learned C.I.T.(Appeals) has erred in law and on facts of the case, in sustaining addition U/S.69A of Rs.64,500/- on account of unexplained cash deposits in RBL Bank Account. ITA No.884/Ahd/2023 2 4. The Learned C.I.T.(Appeals) has erred in law and on facts of the case, in sustaining addition u/s.69A of Rs.11,000/- on account of inter-bank fund transfer of unexplained cash deposit. 3. Heard both the parties on the issues raised in the grounds, and perused the impugned orders of the Revenue authorities and the material available on record. 4. As the facts merge out from the record, the assessee is a senior citizen residing in USA since 1976. AO made addition of Rs.21,93,000/- being amount of cash deposits made in various bank maintained by the assessee. As the assessee could not explain the source of deposits with proper details thereof, the AO treated these cash deposits as unexplained cash credits under section 69A of the Act and added to the total income of the assessee. This action of the AO was confirmed by the ld.CIT(A) by confirming addition of Rs.21,93,000/- towards cash deposits. With regard to other addition of Rs.13,80,560/- being unexplained credit entries in the bank accounts, the ld.CIT(A) restricted the addition to Rs.31,698/- being interest earned on cash deposits. It was submitted before the ld.CIT(A) that he has brought foreign currency duly declared at Customs Department. The assessee had brought US dollar of approx.1,41,000 over a period of time and converted into Indian rupees. The same was retained in India for his expenses in India and to meet the expenses of his mother living in India. 5. I find that the AO has not disputed the declaration of dollar brought in India by the assessee before the Custom authorities in the prescribed form, but disputed that the assessee has not submitted any details documentary evidencing that the dollar so brought in India was converted into Indian currency. Since bringing of the dollar to ITA No.884/Ahd/2023 3 India and declaration of the same before the Custom authorities as per the rule is not in dispute, it can be presumed that the dollars were brought in India after completion of legal formalities and converted into India rupees for meeting his as well as the expenses of his parents, who used to keep at home and save certain amounts out of the money so given by the assessee. All these facts, go to show that the assessee has reasonably explained the source of cash credits, and there is no justification for the Revenue authorities to make the impugned addition. Thus the grounds raised by the assessee are allowed. 6. In the result, the appeal of the assessee is allowed. Dictated on the Open Court, typed and pronounced on 9th October, 2024. Copy of this order be given to the assessee. The Registry is directed to dispatch as per procedure. Sd/- (DR. BRR KUMAR) ACCOUNTANT MEMBER Ahmedabad, dated 09/10/2024 "