Vidya Sagar Singh, Ballia V. ITO, Ward - 2(5), Ballia

ITA 66/VNS/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3563 (ITAT-VARANASI)
• Duration Of Justice: 3 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Peak credit
• Section: 148; 144; 143(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT ‘SMC’ BENCH, VARANASI BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER ITA No.66/VNS/2018 Assessment Year: 2010-11 Shri. Vidya Sagar Singh, S/o Ashok Kumar Singh, Vill & Post- Jamua, Senani Sadan, Ballia, U.P.- 277001 PAN-CEJPS8748Q v. Income Tax Officer, Ward-2(5), Ballia (Appellant) (Respondent) Appellant by: Sh. O.P. Shukla, Advocate Respondent by: Sh. A.K. Singh, Sr. D.R. Date of hearing: 21.03.2022 Date of pronouncement: 27.04.2022 O R D E R SHRI VIJAY PAL RAO, JUDICIAL MEMBER: This appeal by the assessee is directed against the order dated 13.08.2018 of CIT(A), Varanasi for the assessment year 2010-11. The assessee has raised the following grounds which read as under:- “i. Because the learned Assessing Officer has erred and acted illegally in adding back the total deposit of Rs. 22,20,200/- as unexplained cash deposit and erred and acted illegally in not allowing the receipt from sisters to the tune of Rs. 4,00,000/- and Rs. 5,00,000/-. The learned CIT(A) has erred and acted illegally in confirming the same. ii. Because the learned Assessing Officer has erred and acted illegally in treating the total deposit in bank account as concealed income and erred and acted illegally not allowing the benefit of peak credit. The ld. CIT(A) has erred and acted illegally in confirming the same. iii. Because the assessment is bad both on facts in law and not maintainable.” 2. The assessee is an individual and non filer of return of income. The Assessing Officer received the information about the cash deposit of Rs. 22,20,200/- during the year under consideration in the bank account of the ITA No.66 /VNS/2018 Vidya Sagar Singh 2 assessee. The Assessing Officer issued a notice under section 148 on 30.03.2017. In response to the notice, the assessee filed his return of income on 9.11.2017 declaring total income of Rs. 1,43,850/-. Thereafter the Assessing Officer issued notice under section 143(2) and 143(1) but there was no response on behalf of the assessee to any of the notices issued by the Assessing Officer. Accordingly, the Assessing Officer proceeded to frame the assessment under section 144 and total income of the assessee was computed by making addition of Rs. 22,20,200/- as unexplained cash deposit in the bank account. The assessee challenged the action of the Assessing Officer before the CIT(A) and explained the source of cash deposit as a sum of Rs. 5 Lac each received from his father and uncle from the sale proceeds of agricultural land. Sale deed of agricultural land was also produced before the CIT(A). The assessee has also explained that he has received cash of Rs. 4 Lac from his sister Smt. Radhika Singh who is serving in CRPF and Rs. 5 Lac from his another sister Mamta Singh who is living in USA. The balance amount of Rs. 3,20,000/- was claimed by the assessee as accumulated savings. The CIT(A) called for a remand report from the Assessing Officer in respect of these explanations of the assessee. The Assessing Officer in the remand report stated that the assessee has failed to produce any evidence of receiving of the alleged amounts from these persons. The CIT(A) accepted the source of deposits to the extent of Rs. 10 Lac received from his father and uncle of Rs. 5 Lac each out of the sale proceeds of the agricultural land and sustain the addition of the remaining amount of Rs. 12,20,000/-. 3. Before the Tribunal, the learned counsel for the assessee has submitted that the sister of the assessee Smt. Radhika Singh gave gift of Rs. 4 Lac on 9.10.2009 out of the withdrawal of Rs. 6 Lac from UCO Bank account. The said amount has been withdrawn out of the opening balance a confirmation of bank ITA No.66 /VNS/2018 Vidya Sagar Singh 3 account is also filed by the assessee. He has further submitted that as far as Rs. 5 Lac received from another sister Mamta singh the assessee has produced the remittance of the amount by her which was received by the assessee in India through Western Union, the agent of money transfer. Thus, the learned AR of the assessee submitted that the assessee has explained the source of deposit by producing the documentary proof so far as the amount received from his sisters of Rs. 4 Lac and Rs. 5 Lac respectively. He has referred to the cash flow statement to show the availability of cash. 3. On the other hand, the learned DR has submitted that there was a cash deposit of Rs. 22,20,200/- in the bank account of the assessee on 8.12.2009. The assessee has not explained the source of deposit before the Assessing Officer and consequently the Assessing Officer passed ex parte order. The learned DR has further contended that the assessee has admitted that he has also claimed the gift received from his sisters but no source of income and creditworthiness of the sisters has been brought on record. As per the receipts of the amount from the NRI sister there were several tranches of transfer of small amounts whereas the deposit in the bank account made only on one date and there is no co-relation between the money received from the sisters and deposits in the bank account of the assessee. The withdrawal by another sister and depositing the bank account are also not having any direct nexus. He has relied upon the orders of the authorities below. 4. I have considered the rival submissions as well as the relevant material on record. The CIT(A) has discussed the matter in para 4 to 7 as under:- “4. During the course of appellate proceedings, it was submitted that the appellant Mr. Vidya Sagar Singh is an unemployed individual son of a farmer carrying out private tuition. During the period under consideration his income was below the maximum amount not chargeable to tax, no return of income was filed. However, return of income has been filed in response to notice u/s 148. It was further submitted ITA No.66 /VNS/2018 Vidya Sagar Singh 4 that during the year under consideration, the appellant has deposited cash received from his father and uncle from sale proceeds of ancestral agricultural land under family settlement and other close relatives. It was explained that his father Shri Ashok Kumar Singh and Uncle Shri Dilip Kuarnr Singh have jointly sold agricultural land of 10,00,000/- which was deposited in the bank account) of the appellant. The copy of sale deed of the land showing sale proceeds of Rs. 10,00,000/- was also produced. It was further claimed that the appellant has received cash of Rs. 4,00,000/- from his sister Smt, Radhika Singh who serving in CRPF, Smt. Mamta Singh(Rs. 5 Lac), who is her sister living in USA and out of accumulated saving Rs. 3,20,000/-. It was submitted that cash received from these persons was deposited in the bank account. The written submissions of the appellant were forwarded to the A.O. for his comments, whose comment has been received in this office through Addl.CIT, Range-2, Varanasi vide letter F.No. Addld.CIT/Range-2/Vns/Remand Report/2018-19 dated 10.07.2018. In its report, the A.O. has submitted that the bank account no. 25100100006396 maintained with Bank of Baroda, Ballia, the appellant had deposited cash of Rs. 22,00,000/- on 08.12.2009 and Rs. 5,50,000/- on 21.12.2009.1 Accordingly, it was submitted that total cash of Rs. 27,50,000/- has beeru deposited in this bank account, which the assessee has to explain. However, copy of bank account submitted during the course of appellate proceeding which was forwarded to the A.O, clearly show that Rs. 5,50,000/- deposited on 21.12.2009 has been received from Mamta Singh as transfer entry. Infact cash of Rs. 22,00,000/- was deposited on 09.12.2009 and Rs. 20,000/- on 16.07.2009 only. It is important to mention here that in the remand report, the A.O. has not reported about the cash deposit of Rs. 20,000/- made on 16.07.2009. Since only cash of Rs. 22,20,000/- have been deposited and the assessment has been framed on the basis of said deposit, the appellant has to explain only this amount. 5. As regards receipt of cash of Rs. 10,00,000/- from Ashok Kumar Singh and Dilip Kumar Singh (Rs. 5 Lac each), the A.O. has submitted that assesses has failed to adduce documentary evidence in respect of these persons. However, the sale deed in respect of property has been furnished during the course of appellate proceedings shown cash received of Rs. 10,00,000/- by these persons ( a copy of the same was also forwarded to the A.O., however, he has not offered his comments on the same.). Since the availability cash of Rs. 10,00,000/- with the father and uncle of the appellant have been established, the claim of the appellant about source of Rs. 10.00,000/- is explained and the addition to that extent cannot be sustained. 6. As regards claim of receipt of Rs. 4,00,000/- from (Radhika Singh), it is submitted that Sliri Kaclhika Singh a CRPF employee and the appellant has not submitted copy of her return of income. Only her PAN card and identity card has been submitted which does not prove her creditworthiness. Similarly in the case of claim of Rs. 5,00,000/- from Smt. Mamta Singh, the A.O. has submitted that appellant has not been able to prove the \creditworthiness\of this person and from where this NRI have received the cash. Similarly the accumulated saving of Rs. 3,20,000/- has not been explained by the appellant because he is admittedly unemployed youth and ITA No.66 /VNS/2018 Vidya Sagar Singh 5 carried out private tuition for livelihood. The remand report was forwarded to the appellant for comments, who has only submitted that the additions have been made on the basis of conjectures surmises and presumption not based on fact and relevant material. 7. I have gone through the fact of the case, I have already held that availability of cash to the extent of Rs. 10,00,000/- established in the case of the appellant. However, the appellant has not been able to prove the creditworthiness of Mamta Singh and Radhika Singh so as to advanced Rs. 5,00,000/- and Rs. 4,00,000/- respectively. Further the appellant has also not been able to prove the accumulated saving of Rs. 3,20,000/-. Accordingly, these amounts remains unexplained.” 5. Thus, it is clear that out of total addition of Rs. 22,20,00/-, the CIT(A) has accepted the source of deposit of Rs. 10 Lac received from the father and uncle of the assessee as out of sale proceeds of the agricultural land. The CIT(A) has confirmed the addition so far as the claim of Rs. 4 Lac received from Radhika Singh and Rs. 5 Lac from Mamta Singh giving the reasons that the assessee has not proved the creditworthiness of these persons. Since the assessee has produced receipts of transfer of money by his sister through her husband Sh. Rajendra Singh which was received by the assessee in India through the money transfer agent Western Union. The transfer of money was about Rs. 50,000/- in each tranche and there are nine tranche of money transfers. Eight transfers or about Rs. 50,000/- and one is about 1 Lac. Therefore, prima facie, the assessee has discharged its onus to show the source of deposit made in the bank account to the extent of Rs. 5 Lac as the money was received by the assessee as remittance by NRI sister. Further, there is an entry of Rs. 4 Lac in the savings bank account of another sister Smt. Radhika Singh with UCO Bank and therefore, this amount of Rs. 4 Lac is received through banking channel. The bank account statement of the sister shows that there is a transfer of Rs. 4 Lac in the name of the assessee on 13.01.2010. Hence, the assessee has produced the documentary evidence to show transfer through bank account as well as the availability of the money in the bank account is sister. Accordingly, in the facts ITA No.66 /VNS/2018 Vidya Sagar Singh 6 and circumstances of the case, the addition to the extent of Rs. 9 Lac is deleted and the balance amount of Rs. 3,20,000/- as accumulated savings remains unexplained and the addition to the extent is confirmed. 6. In the result, the appeal of the assessee is partly allowed. Order pronounced as per Rule 34(4) of I.T.A.T. Rules, 1963 on 27.04.2022. Sd/- [VIJAY PAL RAO] JUDICIAL MEMBER DATED: 27/04/2022 Varanasi Sh Copy forwarded to: 1. Appellant- 2. Respondent- 3. CIT(A) 4. CIT 5. DR By order Sr. P.S.