Smt. Ravinder Kaur, Jalandhar V. The Income Tax Officer, Jalandhar

ITA 31/ASR/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5827 (ITAT-AMRITSAR)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 28-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Source of fund

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR. BEFORE SHRI H.L. KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER. I.T.A. NO.31(ASR)/2011. (ASSESSMENT YEAR: 2006-07) SMT. RAVINDER KAUR, THE INCOME TAX OFFICER, JALANDHAR. WARD 1(3), JALANDHAR. (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI SANDEEP VIJH, C.A. RESPONDENT BY: SHRI TARSEM LAL, D.R. ORDER PER H.L. KARWA, VICE PRESIDENT. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A), JALANDHAR DATED 3-12-2010, RELATING TO THE ASSESSMENT YEAR 2006-07. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS AS UNDER- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A), HAS ERRED IN SUSTAINING AN ADDITION OF RS.1 ,97,885/- TOWARDS ALLEGED UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNT. THE SUBMISSIONS MADE AND THE DECISIONS CITED HAVE ALSO NOT BEEN APP RECIATED. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE WAS FOUND TO HAVE MADE CASH DEPOSITS TOTALING RS.3,15,000/- IN H ER BANK ACCOUNT DURING THE RELEVANT PREVIOUS YEAR, EACH DEPOSIT BEING OF R S.45,000/-. WHEN ASKED TO STATE THE SOURCE OF THE CASH DEPOSITS, THE ASSES SEE SUBMITTED THAT THE SAME WERE OUT OF HER PAST SAVINGS OUT OF HER INCOME OF T HE EARLIER YEARS AND THAT 2 SHE WAS REGULARLY FILING HER RETURNS FOR THE PAST T WELVE YEARS. SHE STATED THAT THE MONEY WAS KEPT IN A GOLAK IN HER HOUSE TO KEEP IT ASIDE FROM HER OTHER FAMILY MEMBERS. SHE SAID THAT SINCE IT WAS HER HAR D EARNED MONEY SHE DID NOT WANT TO TELL ANYBODY ABOUT IT AND THAT ONLY WHE N THE SALE PROCEEDS OF THE OLD HOUSE WERE BEING INVESTED SHE DECIDED TO TELL H ER HUSBAND TO INVEST HER SAVED MONEY. A YEAR-WISE CASH FLOW STATEMENT WAS A LSO FILED WITH THE A.O. THE A.O. EXAMINED THE CASH FLOW STATEMENT AND NOTED THAT THE ASSESSEE HAD BEEN MAKING EVEN SMALL VALUE CASH TRANSACTIONS OF D EPOSITS AND WITHDRAWALS IN HER BANK ACCOUNT WHICH HAD BEEN OPENED ON 14-9-1 996. THE A.O. WAS OF THE OPINION THAT THIS FACT INDICATED THAT THE ASSES SEE HAD NO SURPLUS CASH WITH HERSELF IN THE EARLIER YEARS. THE ASSESSEE, HOWEVE R, CONTENDED THAT BY FILING THE CASH FLOW STATEMENT SHE HAD DISCHARGED HER BURD EN OF SHOWING THE SOURCE OF THE CASH IN HAND. THE A.O. WAS NOT SATI SFIED. AFTER FURTHER ANALYZING THE TRANSACTIONS IN THE BANK ACCOUNT AND THE CASH FLOW STATEMENT, THE A.O. HELD THAT THE ASSESSEE HAD NO CASH IN HAND AND ADDED THE SUM OF RS.3,15,000/- A THE ASSESSEES UNDISCLOSED INCOME. 4. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) AND THE CIT(A) REDUCED THE ADDITION TO RS.1,97,825/- OBSERVING AS UNDER:- 6. IN LIGHT OF THE DECISION ABOVE, THE ASSESSE IS ALLOWED BENEFIT OF OPENING CASH IN HAND OF RS.75,000/- AND OF THE CURR ENT YEARS NET INCOME AFTER HOUSEHOLD EXPENSES. THE POSITION OF C ASH AVAILABILITY WORKS OUT AS UNDER:- OPENING CASH RS.75,000/- ADD: NET INCOME AFTER EXPENSES RS.42,175/- TOTAL RS.117,175 3 IN LIGHT OF THE AFORESAID POSITION OF CASH AVAILABI LITY, THE CASH DEPOSITS OF THE ASSESSEE IN THE BANK ARE HELD TO BE UNEXPLAINED TO THE EXTENT OF RS.1,97,825/-. ADDITION TO THIS EXTENT I S SUSTAINED OUT OF THE ADDITION OF RS.3,15,000/- MADE BY THE A.O. ASSESSE E, THEREFORE, GETS PART RELIEF IN RESPECT OF GROUND NO.2 OF APPEAL. G ROUND NO.1 IS ADMITTEDLY GENERAL IN NATURE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD. SHRI SANDEEP VIJH, C.A., THE LEARNED COUNSEL FOR THE ASSESSEE, SUBMITTED THAT DURING THE YEAR TH ERE WAS CASH DEPOSITS OF RS.3,15,000/- IN THE SAVINGS BANK ACCOUNT WITH CORP ORATION BANK AND TO EXPLAIN THE SOURCE OF FUNDS, CASH FLOW STATEMENTS S INCE 1994-95 WERE FILED (PAGES 7 TO 13 OF THE ASSESSEES PAPER BOOK). ACCO RDING TO THE LEARNED COUNSEL FOR THE ASSESSEE THESE CASH FLOW STATEMENTS WERE BASED ON THE INCOME RETURNED BY THE ASSESSEE AS WELL AS WITHDRAW ALS FOR HOUSEHOLD PURPOSES (PAGES 14 TO 26 OF THE ASSESSEES PAPER BO OK). SHRI SANDEEP VIJH, C.A., THE LEARNED COUNSEL FOR THE ASSESSEE, FURTHER SUBMITTED THAT TO KEEP THE INCOME IN THE SHAPE OF CASH, IT WAS EXPLAINED BY TH E ASSESSEE THAT SHE HAD KEPT THE MONEY TO HERSELF TO MEET ANY EVENTUALITY I N LIFE WITHOUT DISCLOSING THE WHOLE THING TO THE FAMILY. SHRI SANDEEP VIJH, C.A., THE LEARNED COUNSEL FOR THE ASSESSEE, ALSO INVITED OUR ATTENTION TO THE ORDER OF THE CIT(A) WHEREIN HE HAS POINTED OUT CERTAIN TRANSACTION UPTO THE YE AR 1997 TO DISBELIEVE THE CONTENTION OF THE ASSESSEE. SHRI SANDEEP VIJH, C.A. , THE LEARNED COUNSEL FOR THE ASSESSEE, SUBMITTED THAT CASH BALANCE AS ON 31- 3-2000 WAS AS LOW AS RS.38859/- WHICH A HOUSEWIFE ALSO COULD HAVE SAVED. SHRI SANDEEP VIJH, C.A., THE LEARNED COUNSEL FOR THE ASSESSEE, ALSO PO INTED OUT THAT THE CIT(A) HAS OBSERVED THAT FOR THE YEAR ENDING 31-3-2001, A SUM OF RS.50,000/- GIVEN TO HUSBAND HAS BEEN SHOWN AS CASH IN HAND. ACCORD ING TO THE LEARNED COUNSEL FOR THE ASSESSEE, THIS OBSERVATION IS THE P RESUMPTION OF THE CIT(A) 4 AND WITHOUT CONFRONTING THE ISSUE TO THE ASSESSEE. NO SUCH DEFECT WAS POINTED OUT BY THE A.O. SINCE THE CHEQUE WAS GIVEN TO HUSBAND FOR ENCASHMENT ONLY AND THE SAME WAS ULTIMATELY AVAILAB LE AS CASH IN HAND. SHRI SANDEEP VIJH, C.A., THE LEARNED COUNSEL FOR TH E ASSESSEE, ALSO SUBMITTED THAT NO DEFECT IN CASH FLOW STATEMENT FOR ANY SUBSE QUENT YEAR HAS BEEN POINTED OUT. AFTER CONSIDERING THE ABOVE STATEMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE, THE LEARNED CIT(A) ALLOWED THE BE NEFIT OF OPENING CASH AVAILABLE AT THE BEGINNING OF THE YEAR AT RS.75,000 /- AND GAVE FURTHER BENEFIT OF NET INCOME OF RS.42,175/- (RS.85,175/- DECLARED INCOME FOR THE ASSESSMENT YEAR 2006-07 (MINUS) WITHDRAWALS OF RS.4 2,000/- AS PER CASH FLOW STATEMENT). IN OUR VIEW, THERE IS NO REASON A S TO WHY SIMILAR BENEFIT OF CASH ACCUMULATION SHOULD NOT BE ALLOWED FOR THE FIV E EARLIER YEARS ALSO. IF THE CASH IN HAND AS ON 31-3-2000 AT RS.38,859/- IS ACCEPTED, THEN IN THE NEXT FIVE YEARS, CASH IN HAND WILL GROW TO RS.2,74,448/- AS AGAINST RS.75,000/- ALLOWED BY THE CIT(A). CONSIDERING THE ENTIRE FACT S AND THE CIRCUMSTANCES, THERE WAS NO JUSTIFICATION IN SUSTAINING THE ADDITI ON OF RS.1,97,825/- BY THE CIT(A), PARTICULARLY, WHEN THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE ASSESSEE HAS MADE INVESTMENT ELSEWHERE. IN VIEW OF THE ABOVE, WE DELETE THE ADDITION OF RS.1,97,825/- SUSTAINED BY THE CIT( A). 6. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 7 TH JUNE, 2011. SD/- SD/- (MEHAR SINGH) (H.L. KARWA) ACCOUNTANT MEMBER. VICE PRESIDENT. DATED: 7 TH JUNE, 2011. KC/- COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE (2) THE ITO