Maltiben Gurudutt Yadav, Ahmedabad V. The ITO, Ward-2(2)(3), Ahmedabad

ITA 227/AHD/2023

AI Insights

The case involves Maltiben Gurudutt Yadav, who appealed against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, which upheld the addition of Rs. 2,70,000 to her income as unexplained cash deposit. The assessee, primarily earning from running PG accommodation, had deposited a total of Rs. 3,89,500 in her bank account, of which Rs. 1,69,000 was from cheques and the rest in cash. The Assessing Officer accepted only Rs. 1,19,500 as income from PG accommodation and treated the remaining Rs. 2,70,000 as unexplained. The Tribunal, after reviewing the detailed cash flow statement provided by the assessee, concluded that all deposits were accounted for from her PG income, leading to the decision to allow the appeal and delete the addition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299913 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-08-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 09-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MRS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No. 227/Ahd/2023 िनधा रणवष /Assessment Year: 2015-16 Maltiben Gurudutt Yadav, 25, Kundan Park Society, Naranpura Cross Road, Ahmedabad-380013 PAN : AAEPY 6239 M Vs. Income Tax Officer, Ward 2(2)(3), Ahmedabad / (Appellant) / (Respondent) Assessee by : Shri S.N. Divatia & Shri Samir Vora, ARs Revenue by : Shri Satish Solanki, Sr. DR सुनव ई क त र ख/Date of Hearing : 24.08.2023 घोषण क त र ख /Date of Pronouncement: 29.08.2023 आदेश/O R D E R The present appeal has been filed by the assessee against order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as "CIT(A)" for short] dated 17.02.2023 passed under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act" for short] for the Assessment Year (AY) 2015-16. 2. The solitary issue in the present appeal relates to cash found to be deposited in the bank account of the assessee to the tune of Rs.2,70,000/- remaining unexplained. The grounds raised by the assessee in this regard are as under:- “1.1 The order passed by U/s.250 passed on 17.02.2023 by NFAC (CIT(A), Delhi(for short "NFAC] upholding the addition of Rs.2,70,000/- made by A.O. towards cash deposit in bank account is wholly illegal, unlawful and against the principles of natural justice. 2.1 The Id. NFAC has grievously erred in law and or on facts in not considering fully and properly the explanation submitted by the appellant. 2.2 That in the facts and circumstances of the case the ld.NFAC ought not to have upheld the addition of Rs. 2,70,000/- towards cash deposit in bank account as unexplained credit. (SMC) ITA No. 227/Ahd/2023 Maltiben Gurudutt Yadav Vs. ITO AY : 2015-16 2 2.3 Without prejudice to above and in the alternative, the impugned addition of Rs. 2,70,000/- is highly excessive and calls for reduction.” 3. As transpires from the orders of the authorities below, the assessee is a lady who earns income from running PG accommodation and it was noted that she had deposited cash of Rs.3,89,500/- in her bank account with Kalupur Commercial Bank during the impugned year. The Assessing Officer noted that the assessee had returned PG income of Rs.2,88,500/-. He further noted that to the extent of Rs.1,69,000/- the PG income had been received by way of cheque. Therefore, out of the total PG income returned by the assessee of Rs.2,88,500/-, he reduced the amount received by way of cheque amounting to Rs.1,69,000/- and the balance he accepted the assessee to have received in cash which amounted to Rs.1,19,500/-.Out of total cash deposited of Rs.3,89,500/-,he therefore accepted the source of the same out of PG income to the tune of Rs.1,19,500/- and the balance amount of Rs.2,70,000/- was added to her income as unexplained cash deposited in the bank. 4. I have considered the submissions of both the parties and perused the material available on the record. I have noted that the assessee is a lady with meager means who has returned taxable income of Rs.67,540/- for the impugned year. Admittedly, her major source of income is PG income. The computation of income filed before us reveals that the assessee had returned profits from her business as Rs.2,54,951/- and income from savings bank interest and other bank interest as Rs.8,224/-. Against the same, she had claimed deduction on account of investment in LIC and PF as allowable deduction under Section 80-C of the Act to the tune of Rs.1,50,000/-, and other deduction under Section 80-D of the Act for medical insurance premium paid and u/s 80-TTA for interest earned from savings account (SMC) ITA No. 227/Ahd/2023 Maltiben Gurudutt Yadav Vs. ITO AY : 2015-16 3 amounting to Rs.11,454/-; thus a total deduction of Rs.1,61,454/- was claimed from the gross total income of Rs.2,28,990/- returned by the assessee, resulting in net taxable income of Rs.67,540/-. What the assessee has returned as her income from business of Rs.2,54,951/- is a net profit from the business. The Assessing Officer has taken a figure of Rs.2,88,500/- as a gross receipt from the PG business, which records do not reveal from where he has taken. The assessee has contended that the entire deposits in her bank account was primarily on account of PG income with the component of cash deposit of Rs.3,89,500/- and cheque deposit of Rs.1,69,000/-. The complete cash flow statement has been filed before us at page no. 5 of the paper-book revealing the deposits on account of PG income as stated above, on account of other income from shares, mutual funds, TRFF to the tune of Rs.4,07,627/- and cash withdrawals to the tune of Rs.5,03,500/- on account of PG deposits returned and other withdrawals. I, therefore, find that the entire source of cash deposited in her bank account stands completely explained as coming from PG income only. Running a PG entails substantial expenses also; therefore, what the assessee had returned to tax in her return of income of Rs.2,54,951/- was her net profit from her business. The authorities below have totally misguided themselves by treating this amount as total gross receipts from PG income. Therefore, we do not find any merit in the order passed by the authorities below treating the amount of Rs. 2,70,000/- of cash deposited in her bank account as unexplained and we direct deletion of the same. 5. Before concluding, I would like to observe that assessee such as the present assessee, who is a woman having very meager source of income, should be spared from the rigors Income-tax assessments which result in such small quantum of additions. In my view, it is an entire waste of the huge resources and skill available with the Department which can be used (SMC) ITA No. 227/Ahd/2023 Maltiben Gurudutt Yadav Vs. ITO AY : 2015-16 4 for unraveling larger cases of undisclosed incomes. The assessee like this woman in the present case who must be barely managing to run her house with her meager source of income should be spared the troubles of participating in assessments and being subjected to the pressure of paying up demands raised. The CBDT, we have noted, is making all efforts to bring a human touch in its interaction with the general public and the assessees, and cases such as this, genuinely require human touch. With the above observations, I conclude my order directing the deletion of addition made in the present case. 6. In effect, the appeal of the assessee is allowed. Order pronounced in the open Court on 29/08/2023 at Ahmedabad. Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad; Dated 29/08/2023 **bt आदेश आदेशआदेश आदेश क琉 क琉क琉 क琉 灹ितिलिप 灹ितिलिप灹ितिलिप 灹ितिलिप अ灡ेिषत अ灡ेिषतअ灡ेिषत अ灡ेिषत/Copy of the Order forwarded to : 1. अपीलाथ牸 अपीलाथ牸अपीलाथ牸 अपीलाथ牸 / The Appellant 2. 灹瀄यथ牸 灹瀄यथ牸灹瀄यथ牸 灹瀄यथ牸 / The Respondent. 3. संबंिधत संबंिधतसंबंिधत संबंिधत आयकर आयकरआयकर आयकर आयु猴 आयु猴आयु猴 आयु猴 / Concerned CIT 4. आयकर आयकरआयकर आयकर आयु猴 आयु猴आयु猴 आयु猴)अपील अपीलअपील अपील (/ The CIT(A)- 5. िवभागीय िवभागीयिवभागीय िवभागीय 灹ितिनिध 灹ितिनिध灹ितिनिध 灹ितिनिध ,आयकर आयकरआयकर आयकर अपीलीय अपीलीयअपीलीय अपीलीय अिधकरण अिधकरणअिधकरण अिधकरण/DR,ITAT, Ahmedabad, 6. गाड榁 गाड榁गाड榁 गाड榁 फाईल फाईलफाईल फाईल /Guard file. आदेशानुसार आदेशानुसारआदेशानुसार आदेशानुसार/ BY ORDER, TRUE COPY सहायक सहायकसहायक सहायक पंजीकार पंजीकारपंजीकार पंजीकार (Asstt. Registrar) आयकर आयकरआयकर आयकर अपीलीय अपीलीयअपीलीय अपीलीय अिधकरण अिधकरणअिधकरण अिधकरण ITAT, Ahmedabad 1. Date of dictation ......24.08.2023........ 1. Date on which the typed draft is placed before the Dictating Member ..25.08.2023.......... 2. Other Member...28.08.2029.................. 3. Date on which the approved draft comes to the Sr.P.S./P.S......28.08.2029.................... 4. Date on which the fair order is placed before the Dictating Member for pronouncement...29.08.2029....... 5. Date on which the fair order comes back to the Sr.P.S./P.S......29.08.2029............. 6. Date on which the file goes to the Bench Clerk...29.08.2029.......... 7. Date on which the file goes to the Head Clerk....... 8. The date on which the file goes to the Assistant Registrar for signature on the order............ 9. Date of Despatch of the Order..................