SHILA PUNDLIKRAO TURKHADE, AMRAVATI V. ITO WARD 5 , AMRAWATI

ITA 285/NAG/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0901 (ITAT-NAGPUR)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 12-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY Y. MARATHE
• Keywords: Unexplained investment; Tax effect
• Section: 69; 234B; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER ITA No. 285/Nag./2023 (Assessment Year : 2016-17) Shila Pundlikrao Turkhade Bhagyashri Vidyalaya, Tower Line Amravati. PAN – AAIPT5334Q ................ Appellant v/s Income Tax Officer, Ward-5, Amravati ................ Respondent Assessee by : Shri K.P.Dewani, Advocate Revenue by : Shri Abhay Y.Marathe, Sr.Dr. Date of Hearing – 16/07/2024 Date of Order – 18/07/2024 O R D E R PER K.M.ROY, A.M. The present appeal has been preferred by the assessee challenging the impugned order dated 28/06/2023, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), NFAC, [“learned CIT”], for the assessment year 2016-17. Shila Pundlikrao Turkhade vs ITO Ward-5 Amravati ITA no.285/Nag./2023 Page | 2 2. The assessee has raised following grounds of appeal:– “ Grounds of Appeal Tax Effect 1. The addition made by A.O. at Rs.23,00,000/- u/s 7,10,700 69 r.w.s. 115BBE for deposit in HDFC Bank is unjustified, unwarranted and excessive. 2. The learned A.O. and CIT (A) erred in not considering 0 the withdrawal from bank account as well as opening cash balance available with the assessee herself and family members to explain the deposit in bank account. 3. The learned CIT(A) erred in upholding the addition 0 Made u/s 69 of the I.T. Act 1961 without considering Facts and evidence on record. 4. The assessee denies liability to pay interest under 0 section 234A, 234B and 234C of I.T. Act, 1961 is unjustified, unwarranted and excessive. 5. Any other ground shall be prayed at the time of 0 hearing. Total Tax Effect Rs. 7,10,700/-[ 3. The facts of the case of the appellant summarized from Para 6 of the CIT(A)’s order for facilitating easily recapitulation of the matter, are as follows; “6. Ground No. 5 & 6: In ground No. 5, the appellant has challenged that the 6 addition made by A.O. at Rs. 23,00,000/- u/s 69 r.w.s. 115BBE for deposit in HDFC Bank is unjustified. In ground No. 6, the appellant has challenged that the AO has erred in not considering the withdrawals from bank accounts as well as opening cash balance available with the appellant herself and family members to explain the deposit in bank account. 6.1. The appellant had deposited the cash in the HDFC bank Venus Plaza Shegaon Naka Amravati amounting to Rs.23,00,000/-. The AO has observed that the appellant did not explain the cash deposits and the AO added the amount of Rs. of Rs.23,00,000/- to the income of the appellant as a unexplained investment u/s 69 rws 115BBE of the IT Act. Shila Pundlikrao Turkhade vs ITO Ward-5 Amravati ITA no.285/Nag./2023 Page | 3 6.2. The appellant has submitted that she was working as Principal of Bhagyashri Vidyalaya and had account with HDFC Bank. The appellant also had account with Amravati Zilla Central Co-operative Credit Society Ltd. and statement of the same was submitted before AO during assessment proceedings. The husband of appellant was retired employee and was receiving pension. He had retired on 01/07/2010 as Dy. Education Officer, Education Department, Amravati and the family had life time saving in cash which are managed by the appellant as family member. The appellant has submitted that she has deposited sum of Rs.9,00,000/- on 31/07/2015 with HDFC Bank and has explained that the same were made from withdrawal from account maintained with Amravati Zilla Co-operative Credit Society Ltd. (ADCC) and amount given by husband of appellant out of his cash withdrawal from his bank account and advance received from Shri Pankaj Lende for sale of agricultural holdings belonging to appellant apart from life time savings as opening balance. The appellant has given break up as under: 1 11/03/2015 Withdrawal from salary A/C (ADCC Bank) 75,000.00 2 09/04/2015 Withdrawal from salary A/C (ADCC Bank) 50,000.00 3 15/04/2015 Plot Issar/Token from Shri Pankaj Gopalrao Lende 1,00,000.00 4 02/05/2015 Withdrawal from salary A/C (ADCC Bank) 2,00,000.00 5 15/05/2015 Plot Issar/Token from Shri Pankaj Gopalrao Lende 2,00,000.00 6 30/07/2015 Received from Shri Pundilkarao Turkhade (husband) 3,00,000.00 TOTAL 9,00,000.00 The appellant has stated that she had withdrawn amounts from ADCC Bank on 06/08/2015 of Rs.2,50,000/- on two occasions and thus had available balance of Rs.5,00,000/- as withdrawals from bank in cash; had received sum of Rs.1,00,000/- on Issar of agricultural land from Shri Yadavrao Choudhary. The appellant has stated that the aforesaid available cash of Rs.6,00,000/- had been deposited in HDFC Bank account on 06/08/2015 and 12/08/2015 at Rs.3,00,000/- each. Further, the appellant has submitted that she had deposited sum of Rs.8.00.0ch. Further, the appellant 22/02/2016 which had been deposited out of withdrawal from ADCC Bank, amount received temporarily from friends, amount withdrawn from the bank account of husband and advances received on Issar of Plot apart from life time savings as opening balance. The details of deposit and availability explained by the appellant are as under: 1 Plot Issar/Token from Shri Yadavrao Ramkrushnarao Choudhary 2,00,000.00 2 Received from Shri Pankaj Gopalrao Lende (Plot) 2,00,000.00 3 Received from Shri Yadavrao R. Choudhary (Plot) 2,00,000.00 Shila Pundlikrao Turkhade vs ITO Ward-5 Amravati ITA no.285/Nag./2023 Page | 4 4 Received from Shri Pundilkrao Turkhade (Husband) 40,000.00 5 Loan from Pramilatai Gawande 20,000.00 6 Loan from Amit V. Thakare 20,000.00 7. Loan from Anup V Sawant 20,000.00 8 Withdrawal from ADCC Bank A/C 90,000.00 9 Withdrawal from ADCC Bank A/C 50,000.00 8,40,000.00 The details of Deposit in Bank Account are as under: In HDFC Bank 1 20/08/2015 3,00,000.00 2 06/10/2015 3,00,000.00 3 20/10/2015 1,00,000.00 In ADCC Bank 1 23/12/2015 50,000.00 2 10/02/2016 30,000.00 3 22/02/2016 20,000.00 8,00,000.00 The appellant has stated that she had utilized savings available of the past years and the amount received from her husband and other sources as mentioned above. FINDINGS: 6.3. The submissions made by the appellant are considered. It is seen that the appellant has tried to explain that the sources of the cash deposits are withdrawals from her account, token money received, contribution from husband and other family members, and savings from earlier years. The attempt of the appellant to explain the sources of the Cash deposit are not very convincing. It appears that the appellant has calculated the withdrawals made by her, her husband, family members and tried to link the same to the cash deposits made by her. There are no substantiating evidences with regard to the token money received in cash. In view of the above discussion, appeal on Ground Nos. 5 & 6 are dismissed.” 4. The short point for adjudication is, whether the deposit of Rs.23,00,000/- in cash in HDFC bank can be considered to be unexplained expenditure u/s 69 of the I.T. Act? 5. The learned AR has submitted a brief note of his submission as follows: Shila Pundlikrao Turkhade vs ITO Ward-5 Amravati ITA no.285/Nag./2023 Page | 5 “A) Brief facts: i) Retired Principal of School. ii) Husband retired 2010 as employee of Education Department and Pensioner at present. iii) No activity of business. Assessee belong to Agriculturist Family. iv) Addition is made by A.O. for no response and without considering withdrawals from Bank Account available on record. B) Written submission submitted before CIT(A) fully explains the deposit in bank account. Reliance on pages 6 to 10 being written submission before CIT(A). C) Withdrawals from Bank Account of assessee and husband are Rs. 12.05 lacs (75 + 50 + 200 + 200 + 40 + 500 + 140). Advance towards Agricultural Land Rs. 10 lacs and savings of husband and help of relatives Rs.95,000/-. D) Hon'ble CIT(A) concluded without finding any fault in written submission at para 6.3 that attempt of appellant to explain source of cash deposits are not very convincing. E) The withdrawals from the bank and other sources to explain the deposit is reasonable explanation submitted by appellant. There is no evidence on record that withdrawal from the bank is utilized for any other investment/ expenditure. Availability of withdrawals for deposit in the bank account cannot be denied. Addition of deposit without considering withdrawals is clearly unjustified. F) Advance received towards sale of immovable property is not considered/ignored for no valid justification. G) Appellant is aged about 59 years and is retired teacher. Husband of appellant is retired employee from education department. Assessee as well as her husband has no activity of business from which it could be alleged that appellant has derived any income. Explanation of appellant reasonably deserves credence/acceptance. H) It is settled proposition of law that provisions of section 69 are not mandatory. Reliance is placed on the decision of Hon'ble Apex Court in the case of P K Noorjahan reported at 237 ITR 570 (SC). In the case of appellant considering the activities there is no case that appellant could have earned undisclosed income at Rs.23 lacs which has been assessed to tax in terms of provisions of section 69 of I.T. Act 1961. Raito laid down by the Hon'ble Apex Court squarely applies to fact in the case of appellant. Considering the same addition made ought to have been deleted by CIT(A). I) Reliance on the decision of Hon'ble Apex Court was placed before CIT(A) and is noted at pages 10 & 11of appellate order. No reason is found in the appellate Shila Pundlikrao Turkhade vs ITO Ward-5 Amravati ITA no.285/Nag./2023 Page | 6 order as to why reliance on the judgement of Hon'ble Apex Court is not being accepted. J) Considering the facts and evidence on record addition sustained by CIT(A) at Rs.23 lacs is unjustified and unwarranted. He pleaded before us that the assessee has been able to submit the details of the nature and source of deposits and in view of the fact that there was sufficient cash balance in hand, no addition is warrant. 6. On the other hand, Ld, SR.DR strongly relied upon the order of the lower authorities and submitted that there is no merit in granting relief to the assessee. At this juncture, he drew our attention to paragraph 6.3 of the CIT(A)’s order, which is once again reproduced below. “6.3. The submissions made by the appellant are considered. It is seen that the appellant has tried to explain that the sources of the cash deposits are withdrawals from her account, token money received, contribution from husband and other family members, and savings from earlier years. The attempt of the appellant to explain the sources of the Cash deposit are not very convincing. It appears that the appellant has calculated the withdrawals made by her, her husband, family members and tried to link the same to the cash deposits made by her. There are no substantiating evidences with regard to the token money received in cash. In view of the above discussion, appeal on Ground Nos. 5 & 6 are dismissed.” The CIT(A) has stated that the cash deposit are not very convincing and the appellant has tried to calculate the withdrawals made by her, her husband and family members and link the same to the cash deposits made by her. 7. We are surprised to note that CIT(A) has himself admitted that the explanation is not very convincing. There is no such degree of satisfaction laid down by I.T. Act. Section 69 only speaks of the fact that when the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not satisfactory, the value of investments may be deemed to be the income of the assessee of such Shila Pundlikrao Turkhade vs ITO Ward-5 Amravati ITA no.285/Nag./2023 Page | 7 financial year. In this case, the assessee has meticulously given the nature and source of each and every deposits before the CIT(A). No inquiry whatsoever has been done to destroy the evidences submitted on a very subjective note of degree of satisfaction, the CIT(A) has dismissed the entire explanation of the assessee out rightly. We do not find any justification to accept the conclusion of CIT(A), which is fragile and uncorroborated. The assessee has been successful in establishing the nature and source of cash deposit of Rs.23,00,000/-. Accordingly, there is no merit in addition u/s 69 as unexplained deposit of cash in HDFC Bank of Rs.23,00,000/-. In the result, the appeal of the assessee is allowed. Order pronounced on 18/07/2024. d Sd/-- V. DURGA RAO JUDICIAL MEMBER Sd/-- K.M. ROY ACCOUNTANT MEMBER NAGPUR, DATED: 18/07/2024. Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Rajesh V. Jalit Private Secretary Sr. Private Secretary ITAT, Nagpur