SURENDRA MADANLAL MEHTA , MUMBAI V. ITO WARD 41(3)(4), MUMBAI

ITA 130/MUM/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6505 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 28-05-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 08-01-2024
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NAGNATH PASALE
• Section: 250; 69A; 64

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRI, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER IT A N o.1 30 /M u m/2 0 2 4 (A . Y . 2 01 7-18) S ur e n d r a M ad a n l al Me h t a B 2 4 , N ew V ai s h a l C H S L td ., N a rs i n g L a n e , M a l a d W es t, Mu mb ai-4 0 0 0 64 V s . IT O W a r d 4 1( 3 ) ( 4 ) , Mu mb ai as p e r I n c o me-t ax P or t al an d o rd e r p as s e d b y IT O , W a rd 3 0( 2) ( 7) , M umb ai K a u ti l y a B h av an , Mu mb ai-4 0 0 0 5 1 स्थायी लेखा सं./जीआइआर सं./PAN / GI R N o : AA C PM 92 9 6N Appellant .. Respondent Appellant by : None. Respondent by : Shri Nagnath Pasale D a t e o f H e a ri n g 29.05.2024 D a t e o f P r on o un c em e n t 13.06.2024 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre [NFAC] [hereinafter referred to as “CIT(A)”] dated 26.10.2023 passed for Assessment Year [A.Y.] 2017-18. 2. The grounds of appeal filed by the assessee are as under: P a g e | 2 ITA No. 130/Mum/2024 AY 2017-18 Surendra Madanlal Mehta “Ground 1- To Delete the addition made of Rs. 17,06,500/- as Unexplained Money u/s 69A of the Income Tax Act, 1961: The Ld. Assessing officer (A.O.) erred in making addition of Unexplained Money u/s 69A of the Income Tax Act, 1961 Rs.17,06,500/-. The cash deposited in the savings bank accounts (joint accounts) pertains to me and my spouse Mrs. Leena Surendra Mehta. This cash accumulation has been shown in the Income tax return as cash balance in the Balance Sheet amounting Rs.7,63,312/-in my ITR and Rs.4,81,171/- in my spouse ITR of AY 2016-17. The Ld. A.O. has applied sec 69A of the Income Tax Act, 1961. As mentioned in para 5 of Assessment Order, stating "All three limbs of Section 69A of the Act stands qualified in the case of the assessee, Ld. (i). the assessee was found to be owner of the Money; (ii), such Money was not recorded in the books of accounts; and (iii), its nature and source is not identifiable." However, I would like to state that to apply sec 69A the conditions (ii) and (iii) are not getting satisfied in my case. As I had duly recorded the cash amount in my ITR of AY 2016-17 and its nature and source has been explained by submitting cash flow statement and explanations to the Ld. A.O. It is beyond reach to give explanation for every cash transaction in case of accumulation of funds out of income over a period of time. Holding cash without earning interest is a personal understanding with particular situation and requirements. This amount of Rs. 17,06,500/- is collective cash of me and my spouse. The Ld. A.O. is not appreciating that this amount was deposited in bank accounts out of the savings made over a period of time. The amount was retained in cash for medical and other emergencies for me and my spouse both being senior citizens. Further bank frauds and increasing NPAs made us deposit the cash in different banks accounts merely for security purpose. Appellant plead before your honour to direct assessing officer to delete the addition made of Rs.17,06,500/-as Unexplained Money u/s 69A of the Income Tax Act, 1961.” P a g e | 3 ITA No. 130/Mum/2024 AY 2017-18 Surendra Madanlal Mehta 3. The brief facts of the case is as under: a. The assessee had filed for AY 2017-18 on 13.07.2021 declaring total income of Rs. 1,73,780/-. The case was selected for scrutiny to verify the cash deposited of Rs. 17,06,500/- during the demonetization period. The assessee was asked to justify the source of cash deposit during the assessment proceedings. After considering the assessee’s reply, the Assessing Officer [AO] held that the explanation furnished by him was not tenable and hence addition u/s 69A was made and the assessment completed at a total income of Rs. 18,00,280/- vide order dated 10.12.2019. b. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A)/ NFAC on 02.01.2020 which was dismissed by the CIT(A) vide his order dated 26.10.2023. c. The only ground of the appeal of assessee is regarding the addition made of Rs. 17,06,500/- as unexplained money u/s 69A of the Act. The case was fixed for hearing on 21.05.2024 on which date none appeared on behalf of the assessee. The case was again fixed for 29.05.2024 and notices were issued by email and RPAD. However, on this date also there was no compliance by the assessee. 4. We have carefully considered the facts of the case. It is seen that the CIT(A) has confirmed the addition made by the AO, after considering the P a g e | 4 ITA No. 130/Mum/2024 AY 2017-18 Surendra Madanlal Mehta written submissions of the assessee. Relevant portion of the order is reproduced below: “6.5 At the outset, it is an admitted fact that consequent to demonetization of SBNs i.e., Rs.500/- and Rs.1000/- notes, i.e., w.e.f. 09.11.2016, it has been made illegal to transact in SBNs while conducting business operations or for that matter any other activities in exchange of SBNs. The assessee claimed that the source for the cash deposits during the demonetization period are accumulated past savings out of the commission income earned but failed to furnish necessary/reliable documentary evidence in support of his claim. Further, the assessee failed to furnish clarification on multiple deposits of SBNs in multiple bank accounts during the demonetization period. 6.6 No prudent person would keep such huge amount of cash at home without earning interest from the bank. Further, the assessee is living in a metro city like Mumbai where it is not required to keep huge amount of cash for any transactions including medical emergencies. During the appellate proceedings, the assessee claimed that the cash deposited in the savings bank accounts (joint accounts) pertain to him and his spouse, Mrs. Leena Surendra Mehta. The assessee further claimed that this cash accumulation is reflected in the Income Tax Returns (ITR) filed for the A.Y. 2016-17. The argument of the assessee cannot be accepted as the assessee filed the return of income for the A.Y 2016-17 only on 24.03.2017 which is subsequent to the demonetization period. In fact, as noticed by the AO from the e-filing portal, the assessee never filed income tax returns before the demonetization period. Therefore, it is clear that the return of income for the A.Y 2016- 17 has been filed subsequent to the demonetization period as an afterthought and only to justify the sources for the cash deposits made during the demonetization period. 6.7 Further, the argument of the assessee that (ii) and (iii) limbs of Section 69A of the Act are not applicable to the facts of his case is not tenable as it is clear from the discussions in the foregoing paragraphs P a g e | 5 ITA No. 130/Mum/2024 AY 2017-18 Surendra Madanlal Mehta that all the three limbs of Section 69A are applicable to the facts of the instant case as elaborately explained by the AO in Para 5 of the assessment order. Further, the case law relied upon by the assessee i.e., decision of Hon'ble ITAT Bengaluru in the case of Smt. Teena Bethala, Bengaluru in ITA No. 1383 &1384/Bang/2019 is not applicable to the facts of the case and do not pertain to the demonetization period. 6.8 Further, even during the course of present appellate proceedings, the assessee has failed to rebut the findings of the AO. Under the circumstances, as the assessee failed to furnish necessary/ reliable documentary evidence in support of his claim, I am of the considered opinion that the AO rightly made the impugned addition. of Rs. 17,06,500/- u/s 69A warranting no interference of the appellate authority. Therefore, the grounds of appeal raised by the assessee on this issue are dismissed” 5. The assessee has not appeared before us despite specific opportunities provided, as such it is presumed that he has nothing to submit in the matter. Accordingly, we uphold the order of the Ld. CIT(A) which has been passed after duly considering the assessee’s written submissions. 6. In the result, the appeal filed by the assessee is dismissed. Order Pronounced in Open Court on 13.06.2024 Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (RENU JAUHRI) JUDICIAL MEMBER ACCOUNTANT MEMBER Place: Mumbai Date 13.06.2024 ANIKET SINGH RAJPUT/STENO आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT P a g e | 6 ITA No. 130/Mum/2024 AY 2017-18 Surendra Madanlal Mehta 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अतिकरण/ ITAT, Bench, Mumbai.