Sayaniyaa Karthick, Coimbatore V. Ito, non- corporate ward-1(3), Coimbatore, Coimbatore

ITA 715/CHNY/2023

AI Insights

The case involves Smt. Saraniyaa Karthick, a proprietor of M/s Juzgo Holidays, who appealed against the assessment order for the Assessment Year 2017-18. The appeal arose from the order of the Commissioner of Income Tax (Appeals), which confirmed the Assessing Officer's decision to treat cash deposits made during the demonetization period as unaccounted money. The Tribunal examined whether the cash deposits, including those in Specified Bank Notes (SBN), constituted business receipts or unaccounted money. The Tribunal concluded that only 5% of the demonetized currency should be considered as the assessee's income, similar to the treatment of other deposits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134278 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 24-07-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 04-06-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 144; 69A

Judgement Text

आयकर अपीलीय अिधकरण “बी” ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHENNAI माननीय ी वी. द ु गा राव, ाियक सद! एवं माननीय ी मनोज कु मार अ&वाल ,लेखा सद! के सम)। BEFORE HON’BLE SHRI V. DURGA RAO, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ ITA No.715/Chny/2023 (िनधा रण वष / As sessment Year: 2017-18) Smt. Saraniyaa Karthick 120, Sivasubramaniam Road, R.S. Puram, Coimbatore-641 002. बनाम / V s . ITO Non –Corporate Ward-1(3), Coimbatore. था यी ले खा सं./जी आ इ आ र सं. /P A N / G I R N o . CDSPS-61 46- J (अपीलाथ /Appellant) : (!"थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri S. Sridhar (Advocate)-Ld.AR !"थ कीओरसे/Respondent by : Shri D.Hema Bhupal (JCIT)- Ld.DR सुनवाई की तारीख/Date of Hearing : 25-07-2023 घोषणा की तारीख /Date of Pronouncement : 09-08-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 17-03-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 144 of the Act on 18-11-2019. The sole substantive issue that arises in the appeal is estimation of addition on account of cash deposited by the assessee during demonetization period. 2 ITA No.715/Chny/2023 2. The Registry has noted delay of 20 days in the appeal, the condonation of which has been sought by the assessee on the strength of affidavit of the assessee. Considering the period of delay, the delay is condoned and appeal is admitted for adjudication on merits. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. The assessee being residential individual is stated to be engaged in ticketing business under proprietorship concern namely M/s Juzgo Holidays. Proceedings before lower authorities 3.1 During assessment proceedings, it transpired that the assessee made cash deposits in her bank account during the period between 10- 11-2016 to 30-12-2016. The assessee did not file return of income in earlier years. The Ld. AO proceeded to frame the assessment on best judgment basis u/s 144 since no books were maintained by the assessee. The assessee failed to respond to hearing notices. 3.2 The Ld. AO analyzed the pattern of cash deposit which revealed that there was sudden spike in cash deposit during demonetization period. The total cash deposited was Rs.224.34 Lacs out of which an amount of Rs.41.62 Lacs was deposited in Specified Bank Notes (SBN). The assessee, in reply to proceedings u/s 131(1), submitted that during demonetization period, the clients approached with demonetized currency to book tour packages. Such cash was deposited in the bank account. In most cases, the clients opted for travelling at later dates. However, Ld. AO held that old bank notes ceased to be legal tender from midnight of 08-11-2016 and such currencies lost value in money terms 3 ITA No.715/Chny/2023 and thus could not be used in a transaction. Therefore, the currency deposited in SBN was held to be unaccounted money of the assessee. 3.3 The other deposits in the bank account were Rs.182.71 Lacs on which Ld. AO estimated profits of 5% which worked out to Rs.9.13 Lacs. The deposits of Rs.41.62 Lacs in SBN were treated as unexplained money. The Ld. CIT(A) confirmed the action of Ld. AO since no new material could be placed by the assessee during appellate proceedings. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 4. From the fact, it emerges that the assessee is engaged in ticketing business under proprietorship concern namely M/s Juzgo Holidays. There is no other source of income for the assessee. The assessee has made cash deposits of Rs.224.34 Lacs out of which an amount of Rs.41.62 Lacs was deposited in Specified Bank Notes (SBN). The Ld. AO has estimated income of 5% on normal deposits whereas SBN has been considered to be the unexplained money u/s 69A despite the fact that the only source of income for the assessee is ticketing business only. The assessee had submitted that during demonetization period, the clients approached with demonetized currency to book tour packages. Such cash was deposited in the bank account. In most cases, the clients opted for travelling at later dates. Thus, such receipts constitute business receipts and nothing else and therefore, the same could not be held to be unaccounted money of the assessee. Under such circumstances, making full addition thereof could not be held to be justified. Considering the fact that Ld. AO has estimated income of 5% on other deposits, the same estimation could be made against demonetized currency of 4 ITA No.715/Chny/2023 Rs.41.62 Lacs. We order so. The Ld. AO is directed to re-compute the income of the assessee by accepting 5% of demonetized currency as the income of the assessee. 5. The appeal stands partly allowed in terms of our above order. Order pronounced on 09 th August, 2023. Sd/- Sd/- (V. DURGA RAO) (MANOJ KUMAR AGGARWAL) ाियक सद!/JUDICIAL MEMBER लेखासद! / ACCOUNTANT MEMBER चे7ई Chennai; िदनांक Dated : 09-08-2023 DS आदेश की Uितिलिप अ&ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. !"थ /Respondent 3. आयकरआयु@/CIT 4. िवभागीय!ितिनिध/DR 5. गाडEफाईल/GF