P Durga Venkata Mangatayaru, Visakhapatnam V. Income-tax Officer, Ward-4(5), Visakhapatnam

ITA 161/VIZ/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0784 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 23-09-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PAVAN KUMAR GORTI
• Section: 143(3); 142(1); 201; 143(2); 69A

Judgement Text

आयकरअपीलीयअधधकरण, धिशाखापटणमपीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्रीदुव्िूरुआरएलरेड्डी, न्याधयकसदस्यएिंश्रीएसबालाकृष्णन, लेखासदस्यकेसमक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकरअपीलसं./ I.T.A. No.161/Viz/2021 (धनधाारणिर्ा/ Assessment Year :2017-18) Smt. Durga Venkata Mangatayaru Puppala, Visakhapatnam. PAN: BGBPM 4729 C Vs. The Income Tax Officer, Ward-4(5), Visakhapatnam. (अपीलाथी/ Appellant) (प्रत्यथी/ Respondent) अपीलाथीकीओरसे/ Appellant by : Sri Pavan Kumar Gorti प्रत्याथीकीओरसे/ Respondent by : Sri SPG Mudaliar, Sr. AR सुनिाईकीतारीख/ Date of Hearing : 09/05/2022 घोर्णाकीतारीख/Date of Pronouncement : 30/05/2022 O R D E R PER S. BALAKRISHNAN, Accountant Member : This appeal is filed by the assessee against the order of the Ld. CIT(A), National Faceless Appeal Centre, Delhi vide DIN and Order No. ITBA/NFAC/S/250/2021-22/1034444466(1) dated, 27/07/2021 for the AY 2017-18 arising from the order of the ITO, Ward-4(5), Vizag dated 27/12/2019 passed U/s. 143(3) of the Act. 2 2. The assessee has raised the following grounds in her appeal: “1. That on the facts and circumstances, the order of the Ld. CIT(A), NFAC and the Ld. AO are erroneous and bad in law. 2. That on the facts and circumstances of the case, both the Ld. CIT(A) and Ld. AO erred in treating the deposit of Rs. 10,84,000/- as unexplained money and accordingly charging the same to tax. 3. That on the facts and circumstances of the case, the Ld. CIT(A)/Ld. AO were wrong in drawing a conclusion that the period of holding cash in hand for 17 months is beyond human probability. 4. The appellant craves to consider each of the above grounds of appeal without prejudice to each other and craves leave to add, alter, delete or modify all or any of the above grounds of appeal.” 3. Brief facts of the case are that the assessee field her return of income admitting total income of Rs. 2,83,471/- on 1/8/2017. The case was selected for a limited scrutiny under CASS to examine the “cash deposit during the demonetization period”. Accordingly, statutory notices U/s. 143(2) and 142(1) were issued and served on the assessee. The AO based on the reply furnished by the assessee, treated the cash deposit of Rs. 10,84,000/- as unexplained money u/s. 69A of the Act and accordingly added the same to the income returned by the assessee. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A), NFAC, Delhi. Based on the submissions made by the assessee’s representative, the Ld. CIT(A) upheld the order of the Ld. AO by placing reliance in the decision of the Hyderabad Tribunal in the case 3 of Mir Basheeruddin Ali Khan vs. ITO [2014] 42 taxmann.com 69 (Hyderabad.Trib.). Aggrieved, by the order of the Ld. CIT(A), the assessee is in appeal before us. 4. The Ld. AR relied on the paper book submitted and demonstrated that the assessee had fixed deposits placed by Mr Puppala Chandrasekara Rao, husband of assessee, in the name of the assessee, with Andhra Bank made on 10/07/2012 vide FD No. 095510100041147 for Rs. 17 lakhs and said that the FD matured for Rs 22,46,483/- on 10/07/2015. The assessee has withdrawn cash of Rs. 20 lakhs on 10.07.2015, from the maturity proceeds available in the SB account. The Ld. AR explained that since the assessee wanted to buy an immovable property the amount was kept in cash by the assessee. Since the purchase of immovable property could not materialize and due to the announcement of demonetization during November 2016, the assessee initially deposited Rs. 2.50 lakhs on 16/11/2016 and Rs. 10.84 lakhs on 5/12/2016. The Ld. AR submitted that the balance amount of Rs 6,66,000/- was spent by the assessee. The Ld. AR relied on the judgment in the case of CIT vs. K. Sreedharan (1993) 201 ITR 1010 (Ker.). The Ld.AR also relied on decisions of Co-ordinate Benches as detailed in the paper book. 4 Per contra, the Ld. DR questioned the necessity of holding such huge cash balance for a period of 17 months. The Ld. DR also pointed out to the fact that the assessee has deposited the cash subsequent to the announcement of demonetization in two installments which was also admitted by the Ld. AR. The Ld. DR argued that in the normal circumstances, it is an undisputed fact that each and every citizen wished to deposit the entire cash into the bank account in the first instance itself, consequent to the announcement of demonetization. The Ld. DR also supported the orders of the authorities below. 5. We have heard both the sides and perused the material available on record and the orders of the Authorities below. The admitted facts are that the assessee has withdrawn cash out of the matured Fixed Deposits on 10/07/2015. We find that in the instant case, the assessee has deposited Rs. 2.50 lakhs on 16/11/2016 and Rs. 10.84 lakhs on 5/12/2016 in two phases. The ratio laid down in K. Sreedharan (supra) and co-ordinate benches cited by the Ld.AR is not relevant in the instant case as facts are distinguishable from the instant case where the cash deposit is in two phases consequent to demonitisation. We find merit in the argument of Ld. DR that subsequent to demonetization every citizen of the country rushed to deposit the money into their bank accounts as early as possible. There is also no cogent evidence provided by the Ld. 5 AR that the cash withdrawn from savings account on 10/07/2015 was deposited on 5/12/2016. In the absence of a reasonable explanation and the necessity of depositing the cash in two phases, we find no merit in the arguments of the Ld. AR that it is out of the cash withdrawals of earlier years which was deposited into the bank account of the assessee consequent to the demonetization announced by the Government of India. We therefore find no infirmity in the order of the Ld. CIT(A) and in our opinion no interference is required in this regard. 6. In the result, appeal of the assessee is dismissed. Pronounced in the open Court on the 30 th May, 2022. Sd/- Sd/- (दुव्िूरु आर.एल रेड्डी) (एस बालाकृष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याधयकसदस्य/JUDICIAL MEMBER लेखासदस्य/ACCOUNTANT MEMBER Dated :30.05.2022 OKK - SPS 6 आदेशकीप्रधतधलधपअग्रेधर्त/Copy of the order forwarded to:- 1. धनधााररती/ The Assessee –Smt. Durga Venkata Mangatayaru Puppala, D.No. 501-C, Sector-6, Ukkunagaram, Visakha Steel Plant, Visakhapatnam – 530032. 2. राजस्ि/The Revenue – The Income Tax Officer, Ward-4(5), Aayakar Bhavan, Visakhapatnam. 3. The Principal Commissioner of Income Tax, 4. आयकरआयुक्त (अपील)/ The Commissioner of Income Tax (A), NFAC, Delhi. 5. धिभागीयप्रधतधनधध, आयकरअपीलीयअधधकरण, धिशाखापटणम/ DR,ITAT, Visakhapatnam 6. गाडाफ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam