Shri Mukesh Kumar Jain , Indore V. The ITO 3(5), Indore

ITA 2/Ind/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5950 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 03-01-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Salary income
• Section: 144; 154; 143(3); 142(1); 143(2)

Judgement Text

आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER (Conducted through Virtual Court) ITA No. 2/Ind/2022 Assessment Year: 2017-18 Shri Mukesh Kumar Jain Indore बनाम /Vs. ITO 3(5) Indore (Appellant / Assessee) (Respondent/ Revenue) PAN: ADHPJ 6674 M Assessee by Shri A.G. Shastri, AR Revenue by Shri Ashish Porwal, DR Date of Hearing 10.08.2022 Date of Pronouncement 18.08.2022 आदेश / O R D E R Per B.M. Biyani, A.M.: 1. This appeal filed by assessee is directed against the order dated 29.11.2021 of Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi [“Ld. CIT(A)”] which in turn arises out of the rectification-order dated 05.02.2020 passed by the learned CPC, Bangalore [“Ld. AO”] u/s 154 of the Income-tax Act, 1961 [“the Act”] for the Assessment-Year 2017-18. 2. The assessee has filed following grounds of appeal: “1. In the facts & circumstances of the case the learned CIT(A)- NFAC erred in allowing relief of Rs. 21,60,000/- instead of Rs. 24,00,000/-. 2. In the facts & circumstances of the case the learned CIT(A)- NFAC erred in consequently sustaining addition of Rs. 2,40,000/- Mukesh Kumar Jain ITA No.2/Ind/2022 Assessment year 2017-18 Page 2 of 6 though the assessee had deposited Rs. 2,40,000/- cash in demonatisation period which is within permissible limits. 3. In the facts & circumstances of the case the learned CIT(A)- NFAC erred in not allowing the appeal in toto and not allowing full relief of Rs. 24,00,000/- alleged deposit of cash in demonatisation period, though in fact the assessee had deposited only Rs. 2,40,000/- in demonatisation period in his bank A/C No. 9411529315 with Kotak Mahindra Bank Ltd, Metro Tower, Vijay Nagar, Near Square AB Road, Indore, Madhya Pradesh on 12-11-2016. 4. In the facts & circumstances of the case the CIT(A)-NFAC erred in sustaining addition of Rs. 2,40,000 and allowing relief of Rs 21,60,000 as against Rs. 24,00,000. 5. In the facts & circumstances of the case the appellant reserves right to amend alter add to modify the above grounds of appeal as and when occasion arises. ” 3. Precisely stated the facts of case are such that the assessee is an individual who earned income from salary, house-property and other sources. For the relevant assessment-year 2017-18, the assessee submitted return declaring a total income of Rs. 4,56,580/-. The case was selected for limited scrutiny under CASS for the reason of cash-deposits during demonetisation-period and statutory notices u/s 143(2) / 142(1) were issued. During assessment-proceeding, in response to the notice u/s 142(1), the assessee e-filed a reply alongwith a copy of bank-pass-book and informed the Ld. AO that the assessee deposited only a sum of Rs. 2,40,000/- on 12.11.2016 during demonetisation-period but wrongly mentioned a sum of Rs. 24,00,000/- in the return of income. However, the Ld. AO, without taking into account this letter of assessee, completed assessment u/s 143(3) vide order dated 05.12.2019, after making an addition of Rs. 24,00,000/- as unexplained cash-deposit in bank. Subsequently, the assessee filed an application u/s 154 of the Act to the Ld. AO requesting for rectification of assessment-order but the Ld. AO rejected assessee’s application vide order dated 13.02.2020. Being aggrieved, the assessee filed appeal to Ld. CIT(A). 4. The Ld. CIT(A) considered the submission of assessee and granted relief as under: Mukesh Kumar Jain ITA No.2/Ind/2022 Assessment year 2017-18 Page 3 of 6 “5. Decision: 5.1 The facts of the case are as under: The appellant had made a deposit of Rs 2,40,000/- in his bank account in Kotak Mahindra Bank. The case was selected for scrutiny and the AO passed an order u/s 143(3) of the Act dated 05.12.2019 whereby an addition of Rs 24,00,000/ was made. The appellant filed an application uls 154 of the Act whereby a copy of the bank passbook was also submitted in which a deposit of Rs. 2,40,000/- was reflected. However, while passing the order u/s 154 of the Act dated 13.02.2020, the petition of the appellant was rejected and the amount of Rs 24,00,000/- which the appellant was claiming to be a typographical error (in place of Rs 2,40,000/-) was rejected. 5.2 The main reason of making the addition u/s 143(3) amounting to Rs 24,00,000/- was that the same was mentioned by the appellant in the computation of income as a cash deposit in Kotak Mahindra Bank at the time of demonetisation. In the assessment order, the AO is mentioning that no details are available with him and the addition has been made purely on the basis of the amount having been mentioned by the appellant. In proceedings u/s 143(3) this is rather unfortunate observation. Moreover, when the assessee is submitting the passbook of the concerned bank clarifying the amount cash deposits to be Rs 2,40,000/- as against Rs 24,00,000/- taken by the AO in the assessment order, it is a fit case of mistake apparent from record. The AO ought to have allowed the petition of the appellant while passing the order u/s 154 of the Act dated 13.02.2020, I am compelled to further point out that the AO is rather careless in passing order u/s 154 of the Act in so far as, in the first line itself it is mentioned that" in this case the assessment was completed u/s 144 of the Act on 05.12.2019 on a total income of Rs 28,56,580/-." This itself is factually incorrect as the order dated 05.12.2019 which the appellant has requested to rectify by filing petition u/s 154 of the Act, was passed u/s 143(3) of the Act as can be seen from the first page of the body of the assessment order dated 05.12.2019. 5.3 The appeal of the appellant is allowable. The AO is directed to take the correct amount of Rs. 2,40,000/- by way of cash deposited in Kotak Mahindra Bank as against Rs 24,00,000/- taken to be the amount which was bereft of any evidence. The appellant will get a relief of Rs 21,60,000/-. 6. In the result, the appeal is allowed.” Mukesh Kumar Jain ITA No.2/Ind/2022 Assessment year 2017-18 Page 4 of 6 5. Analysing aforesaid order of Ld. CIT(A), Ld. AR submitted that the Ld. CIT(A) has wrongly restricted relief to Rs. 21,60,000/- only. Ld. AR submitted that the correct amount of cash-deposit made during demonetization-period is just Rs. 2,40,000/- and not Rs. 24,00,000/- which is though correctly accepted by Ld. CIT(A) as basis for granting relief of Rs. 21,60,000/- but the Ld. CIT(A) ought to have granted full relief of Rs. 24,00,000/-, rather than restricting relief to Rs. 21,60,000/- due to the fact that the cash-deposit of Rs. 2,40,000/- made by assessee is well below the limit of Rs. 2,50,000/- fixed by CBDT in Instruction No. 3/2017 dated 21.02.2017, which is well known to all citizens of the country and which is binding upon the authorities including Ld. CIT(A). Ld. AR drew our attention to Para No. 1.1 of the Annexure to Instruction No. 3/2017 dated 21.02.2017 issued by the CBDT, which reads as under: “1.1 In case of an individual (other than minors) not having any business income, no further verification is required to be made if total cash deposit is up to 2.5 lakh. In case of taxpayers above 70 years of age, the limit is Rs. 5.0 lakh per person. The source of such amount can be either household savings/savings from past income or amounts claimed to have been received from any of the sources mentioned in Paras 2 to 6 below. Amounts above this cut- off may require verification to ascertain whether the same is explained or not. The basis for verification can be income earned during past years and its source, filing of ROI and income shown therein, cash withdrawals made from accounts etc.” 6. Ld. AR further referred to the decision of Hon’ble Co-ordinate Bench of ITAT, Delhi in Shri Aniket Agarwal Vs. ITO, Ward-2(3)(1), ITA No. 627/Del/2021 dated 11.05.2022 wherein it has been held: “5. Replying to the above the ld. Sr. DR strongly supported the assessment as well as the first appellate order. However, he could not controvert that the assessee is an Individual earning income from salary and regularly filing return of income and paying due tax thereon. The ld. DR also could not controvert that the total deposits made by the assessee to his bank account was Rs. 2,30,000/- and as per CBDT Instruction No. 1.1 (supra) no further verification is required in a case where an Individual earning income from salary Mukesh Kumar Jain ITA No.2/Ind/2022 Assessment year 2017-18 Page 5 of 6 has deposited an amount up to Rs.2,50,000/- during demonetization period. I also inclined to hold that the order of ITAT, Agra Bench in the case of Smt. Uma Agrawal Baba Kapur Sunaran Ka Mohalla Vs. ITO (supra) and ITAT, Kolkata Bench in the case of Priya Ranjan Saha Vs. ITO (supra) also supports the explanation and submission of assessee and no contrary judgement or order has been shown by the ld. DR in this regard. 6. Therefore, In View of foregoing discussion I hold Instruction No. 1.1 to a logical conclusion that when the CBDT Circulars clearly provide, no further clarification and verification is required to be made in the case of an Individual who is earning income from salary filing return of income has deposited amount of Rs.2,30,000/- during demonetization period. Therefore, addition made by the Assessing Officer and confirmed by the ld. CIT (Appeals) cannot be held as sustainable as the same is clearly against the Instruction issued by the CBDT. Therefore sale ground of appeal of the assessee is allowed.” 7. Ld. AR argued that the assessee is neither minor nor earning income from business. Hence the assessee is squarely covered by the aforesaid Instruction No. 3/2017 of CBDT as well as the decision of Hon’ble Co- ordinate Bench of ITAT, Delhi. Therefore, the cash-deposit of Rs. 2,40,000/- made by the assessee during demonetization-period cannot be enquired by the tax-authorities. Being so, the addition of Rs. 2,40,000/- made by lower authorities deserves to be deleted. 8. Ld. DR, without opposing the submission of Ld. AR, left the matter to the wisdom of Bench. 9. Heard both sides, considered submissions and also perused the record. 10. We observe that the assessee is earning income from salary, house- property and other sources. The assessee is neither minor nor having income from business. We further observe that the correct amount of cash-deposit during demonetization-period was Rs. 2,40,000/- only and the same is not a Mukesh Kumar Jain ITA No.2/Ind/2022 Assessment year 2017-18 Page 6 of 6 matter of dispute by the revenue. Hence, in such circumstances, the case of assessee is directly covered by the Instruction No. 3/2017 of CBDT as analysed by Hon’ble Co-ordinate Bench of ITAT, Delhi in Aniket Agarwal (supra). Therefore, respectfully following the decision of Hon’ble Co-ordinate Bench, we delete the addition of Rs. 2,40,000/- made by Ld. AO. 11. Before parting, we make it clear so that there remains no confusion at all, that the Ld. CIT(A) has already granted a relief of Rs. 21,60,000/- and we have also deleted the remaining addition of Rs. 2,40,000/-, therefore the whole addition of Rs. 24,00,000/- made by Ld. AO comes to an end. 12. In the result, this appeal of assessee is allowed. Order pronounced as per Rule 34 of I.T.A.T. Rules 1963 on 18.08. 2022. Sd/- Sd/- (MAHAVIR PRASAD) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore दनांक /Dated : 18.08.2022 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Benches, Indore