RIYAZUDDIN, JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 233/JPR/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5022 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 08-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: TANUJ AGARWAL
• Section: 142(1); 201; 143(2); 69A

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, ‘’SMC” JAIPUR Jh laanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 233/JP/2021 fu/kZkj.k o"kZ@Assessment Year : 2018-19 Shri Riazuddin 3634, Mohalla Handipura Jagannath Shak Ka Rasta Ramganj Bazar, Jaipur cuke Vs. The ITO Ward 5 (5) Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAAPU 9117 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Tanuj Agarwal, Advocate jktLo dh vksj ls@ Revenue by: Smt. Monisha Choudhary, Addl. CIT lquokbZ dh rkjh[k@ Date of Hearing : 14/07/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 21 /07/2022 vkns'k@ ORDER PER: SANDEEP GOSAIN, JM This appeal of the assessee is directed against the order of the ld. CIT(A) dated 14-09-2021, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2017-18 wherein the solitary ground raised by the assessee is as under:- ‘’That on the facts and circumstances of the case and in law the ld. CIT(A) grossly erred in sustaining the addition of Rs.11.00 lacs u/s 69A of the Income Tax Act, 1961 by8 treating 2 ITA NO. 233/JP/2021 – RIYAZUDDIN VS ITO, WARD 5(5), JAIPUR the cash deposits in bank account as unexplained thereby ignoring all the material evidences on record including the fact that the sources of cash deposits was the earlier cash withdrawals from the bank account.’’ 2.1 Apropos solitary ground of the assessee, brief facts of the case are that the assessee had filed the original return of income electronically on 7-02-2018 declaring total income at Rs.3,52,270/-. The case of the assessee was selected for limited scrutiny under CASS for the reason of ‘’Cash deposit during demonetization period’’. According, notice u/s 143(2) was issued on 9-08-2018 by the ITO, Ward 5(4), Jaipur which was acknowledged by the assessee. Because of transfer of jurisdiction to ITO, Ward 5(5), the notice u/s 142(1) with questionnaire was issued online on 6-09-2019 and 4-10-2019 to the assessee. In response this, the assessee has filed reply stating that the amount of cash deposit during demonetization was the cash withdrawn from bank account prior to demonetization. The assessee further AO stated that he has withdrawn of Rs.11.00 lacs on 7-10-2016 which was deposited during demonetization period. For purpose of cash withdrawal from bank, he has stated that the cash was withdrawn for the purpose of construction / renovation of house property. The AO further noted that as per ITR filed by the assessee, the assesse has shown income from house property of Rs.5.13.244/- and income from other sources of Rs.4,023/-. The assessee has cash deposited during the demonetization period for Rs.11.00 lacs 3 ITA NO. 233/JP/2021 – RIYAZUDDIN VS ITO, WARD 5(5), JAIPUR (Rs.5.00 lacs on 25-11-2016, Rs.5.00 lacs on 29-11-2016 and Rs.1.00 lacs on 17- 12-2016) in his bank account No. 10991101577 maintained with Dena Bank, Johri Bazar, Jaipur. The assesse has withdrawn total Rs.22.00 lacs in month of Oct. 2016 (i.e. Rs.11.00 lacs on 7-10-2016 and Rs.11.00 lacs on 10-10-2016) whereas he deposited cash of Rs.5.00 lacs on 25-11-2-15, Rs.5.00 lacs on 29-11-.2016 and Rs.1.00 lacs on 17-12-2016 during the demonetization period. The AO further noted that the assessee had failed to furnish any documentary evidence of renovation/ construction of house. If this amount was not used for renovation /construction, the amount should have been deposited in starting of demonetization period. The AO further observed that the assessee had deposited cash of Rs.11.00 lacs on 25-11-2016, 29-11-2016 and 17-12-2016 but failed to furnish source of cash deposit of Rs.11.00 lacs during the demonetization period. The AO did not find the reply acceptable as to deposit of Rs.11.00 lacs during the demonetization period and the treated it as assessee’s unexplained income from undisclosed sources during the F.Y. 2016-17 added the same u/s 69A of the Act. 2.2 In first appeal, the ld.CIT(A) has confirmed the action of the AO by observing as under:- I have carefully gone through the assessment order, ground of appeal, statement of acts and written submission of the appellant which is received on 18-08-2021 through ITBA Portal. 4 ITA NO. 233/JP/2021 – RIYAZUDDIN VS ITO, WARD 5(5), JAIPUR In this case, as per the information available, the assessee has made cash deposits in its bank account during F.Y. 2016-17 relevant to A.Y. 2017-18. Further, it is pertinent to mention here on verification of the bank statement, it is seen that the assessee has made the cash deposits Rs.11,00,000/- during the demonetization period. Now before me in the course of appellate proceedings, the assessee has not furnished any concrete details regarding the cash deposit of Rs.11,00,000/-. However, appellant has stated that source of cash deposit was the earlier cash withdrawals from the bank account for the purpose of construction / renovation of house property but demonetization was declared on 8-11-2016, hence cash was deposited back in the same bank account. But appellant has not furnished any evidence/ explanation in his support/defence and do not have any concrete details to prove the purpose of cash withdrawal. The assessee cold not prove where the withdrawal amount of cash was kept. For what purpose, it was withdrawn. In the present time of security problems and theft, no one withdraws and puts such huge amount of cash in the house. Hence, the contention of the assessee that withdrawn cash was deposited during demonetization period cannot be accepted. Assesse has failed to correlate it. Hence, the submission of the assessee cannot be accepted. It is simply an afterthought to evade tax. The onus is upon the assessee to furnish the concrete documentary evidence regarding the source of cash deposit. Here, the assessee has failed to furnish any documentary evidence regarding the 5 ITA NO. 233/JP/2021 – RIYAZUDDIN VS ITO, WARD 5(5), JAIPUR source of cash deposit. Therefore, in the absence of any concrete details regarding the source of cash deposit of Rs.11,00,000/- is remains as unexplained u/s 69A of the Income Tax Act, 1961. Hence, the addition of the AO is confirmed and the appeal of the assessee is dismissed.’’ 2.3 During the course of hearing, the ld. AR of the assessee prayed that both the authorities erred in confirming the addition for which the ld. AR of the assessee submitted the written submission as under:- ‘’It is humbly submitted that both the lower authorities grossly erred in appreciating the facts and circumstances of the case and relevant provisions of law which is submitted in detail as under:- The appellant senior citizen is dependent on rental income from residential house properties for his living. He took a housing loan from Capital First (NBFC) on 06.10.2016 for construction purposes. From the Dena bank statements of the appellant furnished at paper book page no. 1, it is amply evident that a sum of Rs. 11,00,000/- each was withdrawan cash on 07.10.2016 and 10.10.2016. Meanwhile, demonetization was declared on 08.11.2016, hence, the cash was deposited back in the same bank account as under:-. 1. Rs.5,00,000/- on 25.11.2016 ii. Rs.5,00,000/- on 29.11.2016 iii. Rs.1,00,000/- on 17.12.2016 Total Rs. 11,00,000/ Hence, the entire cash deposits during demonetization period in the bank account are fully explained by the cash withdrawals from the same bank account prior to declaration of demonetization. 6 ITA NO. 233/JP/2021 – RIYAZUDDIN VS ITO, WARD 5(5), JAIPUR Further, this position has also been explained by the appellant in the online reply to the notice received for cash deposit during demonetization a copy of which is furnished at paper book page no. 2. During the assessment proceedings, the appellant explained the entire position which is also evident from the online reply filed on the e-proceedings tab on the income tax web portal the copy of which is furnished at paper book page no. 3 to 5 The Id AO at para no. 5 of the assessment order grossly erred in making arbitrarily by holding that the appellant should have deposited the amount back bank account at the starting of the demonetization period. The ld. AO failed to con that when demonetization was declared by the Government there were long queue at the bank for deposit of old currency and withdrawal of new currency. The Government including our Hon'ble Prime Minister Shri Narendra Modi Ji constantly addressed the country and requested them not to panic by rushing to the bank as the window for deposit of old currency was available till 30th December, 2016. The appellant started old currency on 25.11.2016 onwards which was well within the deadline of action of 30-12-2016. The Action of the AO in doubting the genuineness on arbitrary grounds is not at all justified. The appellant deposited the cash after ensuring his safety and convenience as there was heavy rush at banks during early days of demonetization. Moreover, risk of thieves elements at banks was also there as huge amount of cash was deposited/ withdrawn from bank during initial days of demonetization. It is humbly submitted that both the lower authorities grossly erred in appreciating the facts and circumstances of the case and relevant provisions of law. From the bank statement, it is amply evident that the cash was withdrawn a month before demonization and was deposited back in the bank account due to declaration of demonetization. The lower authorities acted arbitrarily merely on surmises and conjectures without brining any cogent material evidence on record that the assessee has utilized the cash withdrawn elsewhere and was not available with him during the demonetization period for bank account. Once the assessee discharged the onus by explaining the source of cash deposits as cash withdrawals from the same bank account a month earlier, the onus shifted to the revenue authorities to prove that the cash was utilized elsewhere which the revenue authorities failed in proving, rather they acted merely on surmises and conjecture while making the impugned addition. . Reliance is being placed on the case of Dhakeshwawri Cotton Mills Ltd. 26 ITR 775 wherein Hon'ble Supreme Court held that a suspicion remains a suspicion unless the same is established and can never take place of reality. Assessment cannot be made on guesswork without any reference to any material on record. The ld. AR of the assessee has relied on various case laws as under:- 7 ITA NO. 233/JP/2021 – RIYAZUDDIN VS ITO, WARD 5(5), JAIPUR 1. CIT Vs K Sreedharan 201 ITR 2010 (Kerala H.C.) 2. Sunil Mathur vs ITO (ITAT, Jaipur Bench) 3. Smt. Krishan Agarwal vs ITO (ITAT Jodhpur) 4. ACIT vs Baldev Raj Charla, 121 TTTJ 306 (ITAT- Delhi) 5. Smt. Veena Awasthi (ITA No. 215/LKW/2016 dated 30-11-2018 ITAT LKO) The ld. AR finally prayed that the impugned addition is illegal, unjustified which may kindly be deleted.’’ 2.4 On the other hand, ld. DR relied on the order of the ld. CIT(A) 2.5 We have heard both the parties and perused the materials available on record. The AO during the course of assessment proceedings noted that the assessee should have deposited the amount back in bank account at the starting of demonetization period but the assessee failed to do so. In view of this, the AO had no alternative except to make addition of Rs.11.00 lacs in the hands of the assessee. In first appeal, the ld. CIT(A) had confirmed the action of the AO.During the course of hearing, the ld. AR of the assessee submitted that as is evident form the bank statement of the assessee at paper book page No. 1 that the assessee had withdrawn cash of Rs.11.00 lacs on 7-10-2016 as well Rs.11.00 lacs were further withdrawn from the bank on 10-10-2016 for construction purposes after receiving property loan from Capital First NBFC amounting to Rs.29,16,404/- on 6-10-2016. However, the demonetization was declared by the Govt. of India on 8-11-2016 due to which the assessee deposited the cash back in the bank account as under:- 8 ITA NO. 233/JP/2021 – RIYAZUDDIN VS ITO, WARD 5(5), JAIPUR 1. Rs.5.00 lacs on 25-11-2016 2. Rs.5.00 lacs on 29-11-2016 3. Rs.1.00 lac on 17-12-2016 From the above, it is evident that the source of cash deposit due to demonetization is fully explained from the same bank account which does not show an ambiguity. It is also noted from the assessment order wherein the AO himself has mentiond that the assessee has filed the reply of the query raised. It appears from the record that the AO has not been able to substantiate the case with any material evidence except making addition on arbitrary basis. In this view of the matter, we do not concur with the findings of the lower authorities and the ground No. 1 of the assessee is allowed. 3.1 During the course of hearing, the ld. AR raised the additional ground as under:- That the ld. Assessing Officer erred in retrospectively applying higher tax section 115BBE as amended by the Taxation Laws (Second Amendment) Act, 2016 which got Presidential assent on 15.12.2016 to the cash deposit transactions amounting to rupees 10 lakhs pertaining to the period prior to the date of enactment.’’ 3.2 During the course of hearing, the ld. AR of the assessee prayed if ground No. 1 of addition of such deposits of Rs.11.00 lacs is allowed then this ground of appeal shall become infructuous and shall remain only of academic importance. 9 ITA NO. 233/JP/2021 – RIYAZUDDIN VS ITO, WARD 5(5), JAIPUR Finally, the ld. AR of the assessee did not press this ground which is dismissed being not pressed. 4. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 21/07/2022. Sd/- Sd/- ¼ jkBksM deys'k t;UrHkkbZ ½ ¼lanhi xkslkbZ½ (Rathod Kamlesh Jayantbhai) (Sandeep Gosain) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 21 /07/2022 *Mishra vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Shri Riyazuddin, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Ward -5 (5), Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA No. 233/JP/2021) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar