GOVIND LAL CHOUDHARY, AJMER V. INCOME TAX OFFICER, AJMER

ITA 557/JPR/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0413 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 09-10-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 28-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Validity of assessment; Condonation of delay
• Section: 68; 250; 143(2); 153C

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh laanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: HON’BLE SHRI SANDEEP GOSAIN, JM & HON’BLE SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 557/JP/2023 fu/kZkj.k o"kZ@Assessment Year : 2016-17. Shri Govind Lal Choudhary 36/624, Govind Sadan, Mahadev Nagar, Police Line Nala, Ajmer. cuke Vs. The Income Tax Officer, Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. ADQPC 2025 E vihykFkhZ@Appellant izR;FkhZ@ Respondent fu/kZkfjrh dh vksj l s@ Assessee by : Shri Sanjeev Jain, CA jktLo dh vksj ls@ Revenue by : Shri Ajey Malik, CIT lquokbZ dh rkjh[k@ Date of Hearing : 10/10/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 30/10/2023 vkns'k@ ORDER PER: SANDEEP GOSAIN, J.M. This appeal by the assessee is directed against the order dated 16.03.2023 of ld. CIT (A), Udaipur-2 passed under section 250 of the IT Act, 1961 for the assessment year 2016-17. The assessee has raised the following grounds :- 1. The ld. Commissioner of Income Tax (Appeal) erred in law as well as on facts of the case by upholding validity of assessment u/s 153C in case Notice u/s 153C was issued by ld. Assessing Officer without recording satisfaction in terms of that section. 2. The ld. Commissioner of Income Tax (Appeal) erred in law as well as on facts of the case by treating cash deposit of Rs. 5,00,000/- as unexplained cash credit. 2 ITA No. 557/JP/2023 Shri Govind Lal Choudhary, Ajmer. The appeal filed by the assessee is delayed by 106 days. The assessee has filed an application supported by an affidavit for condonation of delay, which reads as under :- “ Subject: Petition for Condonation of Delay in filing Appeal. Respected Sir, With reference to the above subject, the I would like to request you to kindly condone the delay in filing Income Tax Appeal due to reasons specified hereunder: 1. I being Senior Citizen and having old age does not keep well most of the time and used to live with my son as my wife had already expired. These days I am not living at my permanent address. 2. The Order passed by Ld. Commissioner of Income Tax (Appeal) came late to my knowledge and therefore I could not take timely decision to file appeal against it. 3. When I approached my counsel then only I got to know about the available remedy of filing further Appeal before your goodself. In the above process, filing of appeal before your goodself got delayed. In view of the above facts, you are requested to take a lenient view and kindly condone the delay in filing appeal. Place: Ajmer Dated: 24.08.2023 Yours Sincerely Sd/- (Appellant)” 2. Having considered the rival submissions as well as going through the contents of the application and affidavit of the assessee, we are satisfied that the assessee has explained a reasonable cause for not filing the appeal within the period of limitation. Accordingly, we condone the delay of 106 days in filing the present appeal. 3 ITA No. 557/JP/2023 Shri Govind Lal Choudhary, Ajmer. 3. The brief facts of the case are that the cash of Rs. 12,00,000/- was intercepted from the possession of Shri Gagandeep by SHO GRP Thana, Ajmer on 27.11.2016. As per the statement under section 131(1A) of the Income Tax Act, 1961 dated 01.12.2016 Shri Gagandeep stated that out of the seized cash of Rs. 12,00,000/-, an amount of Rs. 5,00,000/- was given to him by his maternal uncle Shri Govind Lal Choudhary on 25.04.2016. Shri Govind Lal Choudhary as per affidavit dated 30.11.2016, stated that he had given a sum of Rs. 5,00,000/- to his nephew Gagandeep. Pursuant to this, the provision of section 153C of the Act is invoked in the case of the appellant from assessment years 2011-12 to 2016-17 and for the relevant assessment year 2017-18. Accordingly, notice u/s 153C of the IT Act, 1961 was issued by the AO to the appellant vide notice dated 24.09.2018 for the Assessment Year 2016-17. In compliance thereto, the appellant filed his return of income for the assessment year 2016-17 on 26.10.2018 declaring total income of Rs. 2,50,640/-. During the course of assessment proceedings, a notice under section 142(1) of the IT Act along with questionnaire was issued by the AO to the appellant on 05.11.2018 requiring the assessee to furnish details of cash deposits, pension income, capital gain etc.. Further, a notice under section 143(2) of the IT Act was issued by the AO to the appellant on 18.12.2018. In compliance to the notices and letters issued, the assessee submitted copy of ITR, computation of income, copy of bank account statements etc. Show cause notice dated 20.12.2018 has been issued to the assessee in respect of cash credits of Rs. 14,50,000/- during the relevant financial year. In response, the assessee filed replies/submissions. On perusal of the submissions, the AO observed that the assessee has failed to establish the source of cash deposit in bank account no. 10200737837 of Rs. 28500/- dated 05.07.2015, Rs. 4 ITA No. 557/JP/2023 Shri Govind Lal Choudhary, Ajmer. 2,00,000/- dated 18.08.2015, Rs. 80,000/- dated 20.08.2015, Rs. 10,00,000/- dated 26.11.2015, Rs. 1,50,000/- dated 20.01.2016,Rs. 20,000/- dated 22.03.2016 (total Rs. 14,78,500/-). The assessee, vide show cause notice dated 26.12.2018 was requested to explain the source of cash deposits of Rs. 14,78,500/-. Since the assessee did not file any explanation, the AO completed the assessment at a total income of Rs. 17,29,140/- by making an addition of Rs. 14,78,500/- on account of unexplained cash credit under section 68 of the IT Act. On appeal by the assessee before the ld. CIT (A), the ld. CIT (A) partly allowed the appeal. Aggrieved by the order of ld. CIT (A), the assessee has now preferred this appeal before us. Ground No. 1 relates to upholding validity of assessment u/s 153C in case notice u/s 153C was issued by AO without recording satisfaction in terms of that section. 4. Having gone through the rival contentions, material on record and the orders of the revenue authorities, we find that the ld. CIT (A) while adjudicating ground no. 1 of the assessee has observed in para 5.2 of his order as under :- “ 5.2 I have considered the submission of ld. A/R and carefully gone through the material available on record. There is no dispute on the fact that satisfaction was recorded by the AO before issuing notice u/s 153C. The appellant argued that addition of Rs. 5 lakhs was also made in the hands o Sh. Gagandeep who was intercepted for carrying cash. Therefore, the AO was not sure about the ownership of the cash found from Mr. Gagandeep. This argument of the appellant is not found acceptable. The person who was intercepted with cash himself stated that out of Rs. 12 lakhs, an amount of Rs. 5 lakhs was given by the 5 ITA No. 557/JP/2023 Shri Govind Lal Choudhary, Ajmer. appellant to him. Therefore, on the basis of this information satisfaction was recorded. Whether the amount is finally added in the hands of the appellant or not depends on the explanations offered and evidences furnished during assessment proceedings. The decisions relied upon by the appellant are on different facts and not found applicable on the facts of the case. Considering facts of the case, the validity of assessment u/s 153C is upheld.” In the totality of facts and circumstances of the case and taking into consideration the statement recorded under section 131(1A) of the IT Act, 1961 on 01.12.2016 of Shri Gagandeep S/o Shri Kanhaiyalal, we find no infirmity in the order of the ld. CIT (A) in rejecting ground no.1 relating to issuance of notice under section 153C. We upheld the order of the ld. CIT (A). Ground No. 2 relates to challenging the order of the ld. CIT (A) whereby an addition of Rs. 5,00,000/- was sustained by ld. CIT (A) as unexplained cash credit. 5. We have heard the ld. Counsels of both the parties and perused the material on record. After analyzing the documents placed on record and the orders passed by the respective lower authority, we noticed that as far as addition under section 68 of the IT Act is concerned, in this regard as per the facts of the present case, we noticed that a sum of Rs. 12,00,000/- was recovered from the possession of Shri Gagandeep son of Shri Kanhaiyalal and as per the statement recorded under section 131(1A) of the IT Act, the said Gagandeep stated that out of seized cash of Rs. 12,00,000/-, a sum of Rs. 6 ITA No. 557/JP/2023 Shri Govind Lal Choudhary, Ajmer. 5,00,000/- was given to him by his maternal uncle Shri Govind Lal Choudhary i.e the assessee and the said version was also accepted by the assessee by filing affidavit dated 30.11.2016. Therefore, provision of section 153C of the IT Act, 1961 was invoked and consequently the cases of the assessee for the assessment years 2011-12 to 17-18 were reopened. 5.1 For the assessment year under consideration, it was found that the assessee had deposited a sum of Rs. 14,78,500/- in cash in his bank account. In order to explain the source of said cash deposit, it was categorically submitted by the assessee that a sum of Rs. 10,00,000/- was found in the hidden belongings of his wife on her death, which was her ‘Stridhan’. Since the assessee could not substantiate his version by evidence, therefore, the AO treated the entire amount of Rs. 14,78,500/- as unexplained and consequently made the addition under section 68 of the IT Act. On appeal, the ld. CIT (A) while considering the cash flow statement, deleted part addition and sustained the remaining addition of Rs. 5,00,000/-. 5.2 Before us, against this addition, the ld. A/R reiterated arguments as were made by him before the lower authorities and pointed out that assessee had deposited cash in his bank account on different dates amounting to Rs. 14,78,500/- in total and at the time of said deposits, the assessee used to earn Rs. 35,000/- every year from his agricultural activities and out of the said bank deposits, assessee had declared the source of Rs. 10,00,000/- as hidden belongings of his deceased wife which he found on her death being her 7 ITA No. 557/JP/2023 Shri Govind Lal Choudhary, Ajmer. ‘Stridhan’ which was deposited by him in his bank account. In order to substantiate his submission, it was categorically submitted that wife of the assessee was illiterate and was not having her independent bank account. Therefore, all her household savings contributed to her by her husband, including her ‘Stridhan’ was kept by her at home only. Apart from this, assessee is a retired employee and his entire retirement funds were available with his wife which was also kept at home itself. It was further submitted that other cash deposits by the assessee was re-deposition of excess withdrawals done by the assessee from his bank account for medical contingencies as he and his wife both were in old age so the same were used to be re-deposited by him in his bank account, when the same were not utilized. We, after hearing the both the parties and also considering the peculiar facts of the present case, find that the amount deposited by the assessee in the bank account stands fully explained and we are of the view that the amount deposited by the assesee was from explained sources, as the assessee was a retired Government employee and was having no business activity. Therefore, there was no scope of undisclosed accumulation of amount and even otherwise, the AO could not point out any undisclosed accumulation of amount by the assessee from any other source. Thus, in our view, the assessee has successfully discharged his onus by explaining all the factual position regarding the source of cash deposits before the revenue authorities. The ld. CIT (A) had rejected the part version of the assessee and 8 ITA No. 557/JP/2023 Shri Govind Lal Choudhary, Ajmer. accepted the remaining version. In our view, the revenue authorities could not rebut the specific assertion put forth by the assessee before us and have not pointed out any contrary circumstances which lead to conclusion that the submissions made by the assessee are without any basis of foundation. Therefore, taking into consideration each and every circumstances of the case of the assessee that the amount deposited by the assessee in his bank account was from explained sources, we delete the addition. 6. In the result, this appeal of the assessee is partly allowed. Order pronounced in the open court on 30/10/2023. Sd/- Sd/- ¼ jkBkSM+ deys'k t;arHkkbZ ½ ¼lanhi xkslkbZ½ (RATHOD KAMLESH JAYANTBHAI) (SANDEEP GOSAIN) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@ Jaipur fnukad@Dated:- 30/10/2023. Das/ vkns'k dh izfrfyfi vxzsf’kr@ Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Shri Govind Lal Choudhary, Ajmer. 2. izR;FkhZ@ The Respondent- The Income Tax Officer, Ajmer. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File {ITA No. 557/JP/2023} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar 9 ITA No. 557/JP/2023 Shri Govind Lal Choudhary, Ajmer. 2. At the time of hearing, the ld. A/R of the assessee has stated that the assessee does not press ground no. 1 of the appeal and the same may be dismissed as not pressed. The ld. D/R has raised no objection if the ground no. 1 of the assessee’s appeal is dismissed as not pressed. Accordingly, ground no. 1 of the assessee’s appeal is dismissed being not pressed.