CHARUSHEELA S SHINDE, MUMBAI V. WARD 34(1)(3), MUMBAI

ITA 2645/MUM/2022

AI Insights

The case involves Charusheela S. Shinde, who appealed against the order of the Learned Commissioner of Income Tax (Appeals) regarding the assessment year 2014-15. The primary contention was the addition of \\u20b938,00,000/- as unexplained cash investment under section 69 of the Income Tax Act, 1961. The Assessing Officer had made this addition based on the lack of corroborative evidence for the source of fixed deposits. The Tribunal examined the submissions and evidence presented, including bank statements and sale deeds of properties, and partly allowed the appeal by accepting some of the husband's bank transfers as explained but sustaining the addition for the unexplained cash deposits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123821 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-01-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 19-10-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Salary income
• Section: 69; 142(1); 133(6); 143(2); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI KULDIP SINGH, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER ITA.NO. 2645/MUM/2022 (A.Y: 2014-15) Charusheela S. Shinde C-32, Bane Compound Arthur Road, Tardeo Mumbai - 400034 PAN: BHIPS5623K v. Income Tax Officer – 34(1)(3) 105, 1 st Floor C-12, Bandra Kurla Complex Bandra (E), Mumbai -400051 (Appellant) (Respondent) Assessee Represented by : Ms. Mona Makwana Department Represented by : Shri A.N. BHalekar Date of Hearing : 24.01.2023 Date of Pronouncement : 20.04.2023 O R D E R PER S. RIFAUR RAHMAN (AM) 1. This appeal is filed by the assessee against order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”] dated 10.08.2022 for the A.Y.2014-15. ITA.NO. 2645/MUM/2022 (A.Y: 2014-15) Charusheela S. Shinde Page No. | 2 2. Brief facts of the case are, assessee filed its return of income on 27.06.2015 declaring total income of ₹.2,48,659/-, which comprises of income declared under the head “salary” and “income from other sources”. The case was selected for scrutiny under CASS in order to examine the cash deposited amounting to ₹.10,00,000/- in Abhudaya Co-operative Bank and the main reason for scrutiny is large cash deposits in saving bank account and assessee has also transferred one or more property during the year. Accordingly, notices u/s. 143(2) and 142(1) of Income-tax Act, 1961 (in short “Act”) were issued and served on the assessee. In response, Authorised Representative of the assessee attended and submitted the relevant information as called for. 3. Assessee is a Data Entry Operator in Navi Mumbai Corporation and derive the income from salary. Further, notices issued u/s. 142(1) of the Act issued and Assessing Officer asked for various informations. In response assessee’s husband Mr. Subhash shinde filed informations vide letter 05.10.2016 along with copy of agreement of various properties purchased and sold by him and the assessee. During the assessment proceedings assessee was asked to submit proofs for term deposit of ₹.38,00,000/- and source thereof. In response assessee’s husband submitted that the source of deposit of ₹.38,00,000/- is the amount from ITA.NO. 2645/MUM/2022 (A.Y: 2014-15) Charusheela S. Shinde Page No. | 3 sale of flat at Sanpada, Navi Mumbai and further, the same amount was reinvested in Flat purchased at Tilaknagar, Mumbai. 4. After considering the submissions of the assessee another show-cause notice was issued on 02.12.2016 asking the assessee to explain why the time deposit of ₹.38,00,000/- made in Abhudaya Co-operative Bank and Saraswat Co-operative Bank treated as unexplained cash investment during the current Assessment Year. In response to the above assessee has submitted that these amounts are deposited out of sale proceeds of flat at Sanpada, Navi Mumbai. 5. Not convinced with the various submissions made by the assessee and her husband, Assessing Officer observed that bank statements given by the assessee of Abhudaya Co-operative Bank for the period of 06.09.2010 to 19.03.2013 of the joint account with her husband, he observed that no entry of sale and purchase transaction of the above mentioned flats at Tilak Nagar and Sanpada and no entry is found for making the fixed deposits for the period of 06.09.2010 to 19.03.2013. It is very contradictory statement of the assessee that the source of the Fixed deposits of ₹.38,00,000/- in Abhudaya Co-operative Bank and Saraswat Co-operative Bank is from sale and purchase of the above ITA.NO. 2645/MUM/2022 (A.Y: 2014-15) Charusheela S. Shinde Page No. | 4 mentioned flats. Therefore, he came to the conclusion that the assessee never gave any corroborative evidence for the source of fixed deposits of ₹.38,00,000/-. Accordingly, he proceeded to make the addition u/s. 69 of the Act and further, he observed that assessee has not declared any interest income from the above said banks. Accordingly, he made the addition of interest of ₹.45,615/-. 6. Aggrieved, assessee preferred an appeal before the Ld.CIT(A) and before the Ld.CIT(A) assessee has submitted as per the AIR report assessee has deposits ₹.5,00,000/- each on 19.06.2013 and 29.06.2013 and filed the supporting evidences before him. With regard to cash deposits of ₹.38,00,000/-, it was submitted that the deposits were out of the amounts received from sale of flats which is in her husband name. After considering the submissions of the assessee ,Ld.CIT(A) observed that apart from cash deposit of ₹.10,00,000/- in Abhudaya Co-operative Bank, during the course of the assessment proceedings assessee has submitted that assessee’s husband had sold flat and purchased some flats during the year. Further, assessee has mentioned that she has invested in term deposit of ₹.38,00,000/- during the assessment year and the source for the above deposits are the amounts received from selling of flat at Sanpada, Navi Mumbai. However, Ld.CIT(A) observed that ITA.NO. 2645/MUM/2022 (A.Y: 2014-15) Charusheela S. Shinde Page No. | 5 Assessing Officer has verified and mentioned that there is no entry of sale and purchase transaction of the above mentioned flats in the bank account statement called-for u/s. 133(6) of the Act. Since, in absence of any corroborative evidence of source of fixed deposits of ₹.38,00,000/- he has sustained the same after analyzing the submissions of the assessee and accordingly, he dismissed the appeal filed by the assessee. 7. Aggrieved assessee is in appeal by raising following grounds in its appeal: - “1. On the facts and in the circumstances of the case and in law. The NFAC, hereinafter referred to as the Ld. AO has erred in law in assessing the total income at Rs. 40,59,190/- instead of returned Income of Rs. 2,48,659/-. The returned Income may please be accepted. 2. On the facts and circumstances of the case and in law, the Id. NFAC has erred in making an addition of Rs. 38,00,000/- on the basis of unexplained Cash money u/s 69A of the Income tax Act, 1961. We would like to bring to Your Honor's notice that the assesee has made Investment in Fixed Deposits & explained the Source of the Fixed Deposits invested during the year with supporting documents. The said addition may please be deleted. 3. The assessee craves leave to add, alter, amend, modify or drop the grounds of appeal at the time of hearing.” 8. At the time of hearing, Ld. AR brought to our notice Para No. 4 of the Ld.CIT(A) order wherein Ld.CIT(A) has discussed purchase and sale of flats by the assessee’s husband. In this regard he brought to our notice Page No. 68 and 69 of the Paper Book which is the deed of assignment ITA.NO. 2645/MUM/2022 (A.Y: 2014-15) Charusheela S. Shinde Page No. | 6 entered by the assessee’s husband relating to sale of Flat No. E-6/2:2, Sanpada, Navi Mumbai which is in support of receipt of ₹.50,00,000/- and Ld. AR submitted that the deposit was made by her husband from the above sale proceeds. Further, Ld. AR submitted that as per the scrutiny mandate for which the case of the assessee was selected is to verify the deposit of ₹. 10,00,000/- in her account. Therefore, Assessing Officer cannot travel beyond that mandate and proceed to make the addition of ₹.38,00,000/-. She prayed that Assessing Officer has no mandate to go beyond the selection criteria and further, she submitted a summarized submissions explaining the above sources: - Sr. No. Charusheela Shinde Subhash Shinde Source/ Date Bank Name Page No. Amount Date Bank Name Amount Remarks 1 18.10.2013 Saraswat Bank 32 5,00,000 DR Transaction in Individual Transaction statement page no. 44-on the basis on which AO had mad e addition showing Cash Deposit is incorrect. Please verify the Saraswat Bank statement, there are debit entries on the said date and of the same amount i.e Rs. 5, 00,000. And being debit entries the same cannot be added to the Income. 2 20.10.2013 Saraswat Bank 32 5,00,000 DR 3 26.07. 2013 17.06. 2013 The Shamrao Vithal Co- operative Bank Ltd- Term Deposit Cash deposited in Abhyudaya Bank 42 39 5,00,000 DR 5,00,000 CR Transaction should not be added to Total Income as the same is transfer from Cash deposited in Abhyudaya Bank dated 17.06.2013. Cash deposit in Abhyudaya Bank is already accounted in Addition. Therefore, the debit entry i.e FD made in SVC cannot be added to the Total Income. ITA.NO. 2645/MUM/2022 (A.Y: 2014-15) Charusheela S. Shinde Page No. | 7 Sr. No. Charusheela Shinde Subhash Shinde Source/ Date Bank Name Page No. Amount Date Bank Name Amount Remarks 4 19.06. 2013 Saraswat Bank- Made Term Deposit 34 5,00,000 CR 5,00,000 DR 19.06.2013 ICICI Bank 5,00,000 DR Transaction indicates that it is a transfer from Husband to Wife. Mr. Subhash Shinde had transferred the said amount of Rs. 5,00,000 after receiving Sales Consideration of Rs. 25,00,000 from Devendra Bhoir. Mr. Subhash Shinde is already assessed u/s 143(3) r.w.s 147 and has paid the tax. Copy of Assessment Order in Page No. 56. 5 19.03. 2013 13.04. 2013 Abhyudaya Bank- Made Term Deposit 40 41 3,00,000 CR 3,00,000 DR 19.03.2013 ICICI Bank 3,00,000 DR Transaction indicates that Mr. Subhash Shinde had transferred the amount to Mrs. Charusheela Shinde on 19.03.2013. Further if we check the source of payment done by Mr. Subhash Shinde the same is from the Sale proceeds received on 05.03.2013 in ICICI bank. So this clearly indicates that the said amount had already been accounted in Mr. Subhash Shinde and the same had been processed already. So, adding the same amount again in Mrs. Charusheela Shinde does not arises 6 29.06. 2013 24.06. 2013 Saraswat Bank-Term Deposit Cash Deposited in Corporation Bank 34 38 5,00,000 DR 5,00,000 CR Transaction was done based on opening cash availability with Mr. Subhash Shinde and Mrs. Charusheela Shinde. The Appellant had requested the bank statement for the earlier financial years to the bank. As the same are quite old, bank is taking time to provide the details. Your Honor requesting you to remand back to the A.O for the said transaction. ITA.NO. 2645/MUM/2022 (A.Y: 2014-15) Charusheela S. Shinde Page No. | 8 Sr. No. Charusheela Shinde Subhash Shinde Source/ Date Bank Name Page No. Amount Date Bank Name Amount Remarks 7 28.06. 2013 11.06. 2013 Abhyudaya Bank-Term Deposit Abhyudaya Bank-Cash Deposited 41 39 5,00,000 DR 5,00,000 CR Transaction was done based on opening cash availability with Mr. Subhash Shinde and Mrs. Charusheela Shinde. The Appellant had requested the bank statement for the earlier financial years to the bank. As the same are quite old, bank is taking time to provide the details. Your Honor requesting you to remand back to the A.O for the said transaction. 8 17.06. 2013 Abhyudaya Bank-Cash Deposited 39 5,00,000 CR Transaction was done based on opening cash availability with Mr. Subhash Shinde and Mrs. Charusheela Shinde. The Appellant had requested the bank statement for the earlier financial years to the bank. As the same are quite old, bank is taking time to provide the details. Your Honor requesting you to remand back to the A.O for the said transaction. 9. On the other hand, Ld.DR relied on the orders of the lower authorities. 10. Considered the rival submissions and material placed on record, we observe that Ld. AR of the assessee vehemently argued that the mandate of selecting the case for scrutiny is only to verify deposit of ₹.10,00,000/- in the assessee account. However, Assessing Officer has proceeded to make the addition of ₹.38,00,000/-. We observe from the record that the selection of case for scrutiny is not limited it is complete scrutiny ITA.NO. 2645/MUM/2022 (A.Y: 2014-15) Charusheela S. Shinde Page No. | 9 assessment. Therefore, plea of the Ld. AR of the assessee cannot be accepted. 11. With regard to addition made by the Assessing Officer, no doubt, we observe that assessee’s husband has received cash and deposited ₹.5,00,000/- each on 19.06.2013 and 29.06.2013 in the assessee’s bank and at the same time, we observe that assessee’s husband has sold the flats in Sanpada, Navi Mumbai and as per the deed of assignment we observe that assessee’s husband has no doubt have received ₹.50,00,000/- on various dates in June, 2013 and JULY, 2013. At the same time, we also observe that in assessee’s bank account there were certain cash deposits and transfers to other bank accounts, there may be certain transactions made in the assessee’s bank account during the same period in which assessee’s husband has sold the flat. We could accept that bank transfer made during the period only to the extent of ₹.10,00,000/- which is transferred from assessee’s husband bank account. However, we observe that in assessee’s bank account there were several cash deposits and as per the record assessee’s husband has received all the payments for sale of flat only through bank account. There is no proof of any cash settlement. Therefore, there is no evidence placed on record in support of the cash deposits made by the assessee. However, it was ITA.NO. 2645/MUM/2022 (A.Y: 2014-15) Charusheela S. Shinde Page No. | 10 claimed by Ld. AR that the cash is out of opening cash in hand with the assessee’s husband. This argument also cannot be accepted. Assessee has to explain what is the source of the opening cash in hand with the assessee’s husband. Therefore, we are inclined to sustain the addition made by the Assessing Officer to the extent of ₹.30,00,000/- considering the fact that to the extent of ₹.8,00,000/- there were bank transfer by assessee’s husband which were through banking channels. Accordingly, ground raised by the assessee is partly allowed. 12. In the result, appeal filed by the assessee is partly allowed. Order pronounced in the open court on 20 th April, 2023 Sd/- Sd/- (KULDIP SINGH) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 20/04/2023 Giridhar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum