Kunda Ramdas Shetiya , Hubli V. The Income Tax Officer, Ward-2(3), Hubli

ITA 719/BANG/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0210 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-11-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 24-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 250; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC - B” BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT ITA No.719/Bang/2023 Assessment Year : 2017-18 Kunda Ramdas Shetiya, Flat No.02, Ground Floor, Supra Homes, Nehru Nagar, Gokul Road, Hubli – 580 030. PAN : ASRPS 5328 Q Vs.ITO, Ward –2(3), Hubli. APPELLANTRESPONDENT Assessee by:Shri.Prakash Hegde, CA Revenue by :Shri.Ganesh R Ghale, Advocate, Standing Counsel for Revenue. Date of hearing:02.11.2023 Date of Pronouncement:03.11.2023 O R D E R This appeal at the instance of the assessee is directed against CIT(A)’s order dated 30.07.2023, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2017-18. 2. The grounds raised read as follows: 1.That the learned Commissioner of Income Tax (Appeals) [CIT(A)] erred on the facts and circumstances of the case and in law by confirming the Assessment Order passed by the learned Assessing Officer (`the AO'). 2.The learned CIT(A) has erred in confirming the order of the learned AO without giving sufficient opportunity of being heard to the Appellant. ITA No.719/Bang/2023 Page 2 of 6 3.The learned CIT(A) has erred in confirming the order of the learned AO who has made addition of Rs 12,13,500 under section 69A of the Income Tax Act, 16,1 ('the Act') without proper justification and without appreciating that the Appellant had withdrawn more than Rs 26,00,000 from her bank accounts in the past 7 months. 4.The learned CIT(A) has erred in confirming the order of the learned AO who has made addition under section 69A of the Act even though the applicable conditions under the said section are not fulfilled in the facts of the Appellant's case. 5.The learned CIT(A) erred in passing the order ignoring the decisions of the higher appellate authorities. 3. Brief facts of the case are as follows: Assessee, an individual, had filed her return of income for Assessment Year 2017-18 on 28.06.2017 declaring income of Rs.3,02,870/-. The assessment was completed under section 143(3) of the Act, vide order dated 04.11.2019. In the said order, addition was made of Rs.12,13,500/- on account of cash deposit made during the demonetization period as ‘unexplained money’ under section 69A of the Act. The AO also had applied special rate of taxation under section 115BBE of the Act. 4. Aggrieved by the Assessment Order, the assessee filed appeal before the First Appellate Authority. The CIT(A) passed ex-parte order since the assessee did not respond to the notices issued. The CIT(A) confirmed the addition made by the AO and dismissed the appeal filed by assessee. 5. Aggrieved by the order of the CIT(A), assessee has filed the present appeal before the Tribunal. Assessee has filed a Paper Book comprising of 42 pages enclosing therein bank statements of three savings bank accounts in the name of the assessee, submissions made before the AO, death certification of assessee’s husband, acknowledgement of the return filed, computation of income, etc. The ITA No.719/Bang/2023 Page 3 of 6 learned AR reiterated the submissions made before the AO that addition made of Rs.12,13,500/- under section 69A of the Act is not justified since the assessee had sufficient cash withdrawals of more than 26 lakhs (for the past seven months), and the same was utilized for the cash deposits made during the demonetization period. 6. The learned Standing Counsel supported the orders of the AO and the CIT(A). 7. I have heard the rival submissions and perused the material on record. Assessee has three bank accounts which are as follows: SI No Name of the Bank from which withdrawals were made 1 NKGSB Coop Bank Ltd 2 SBI A/c No. 64018211406 3 SBI A/c No. 20306536285 8. During the demonetization period i.e., between 09.11.2016 to 30.12.2016, assessee had made cash deposit amounting to Rs.12,13,500/- in M/s. NKGSB Co-operative Bank. The date of deposits and the amounts deposited on each of the said dates are detailed below: SI NoDate of DepositAmount 111.11.201613,500/- 213.11.20162,00,000/- 314.11.20162,00,000/- ITA No.719/Bang/2023 Page 4 of 6 420.11.20162,00,000/- 521.11.20166,00,000/- TOTAL12,13,500/- 9. The cash withdrawn from three bank accounts of the assessee, few month prior to demonetization period are as follows: Sl NoName of the Bank A/c No Amount of cash withdrawal (Rs) 1 NKGSB Coop Bank Ltd, Hubballi. 2110010000299712,77,000/- 2 SBI, Dharwad (Joint Account). 64018211406 10,91,500/- 3SB1, Dharwad. 20306536285 3,22,800/- 10. The AO, while making the addition of the entire cash deposit of Rs.12,13,500/- under section 69A of the Act, had stated that the entire cash withdrawals from the SBI accounts will not be available for making the cash deposits during the demonetization period. The AO held that the withdrawals from the SBI accounts are of small figures of Rs.2,500/- to Rs.4,000/- except for a sum of Rs.3,00,000/- and Rs.5,10,000/- withdrawn on 22.04.2016 and 06.06.2016 respectively. The AO held that withdrawals of Rs.3,00,000/- and Rs.5,10,000/- have been utilized for making deposits in fixed deposits. Admittedly, there has been withdrawals from the bank account maintained by assessee with M/s. NKGSB Co-operative Bank to the tune of Rs.12,77,000/-. The cash withdrawals from M/s. NKGSB Co-operative Bank are detailed below: ITA No.719/Bang/2023 Page 5 of 6 Sl No Date of Withdrawal Amount of cash withdrawal (Rs) 1 20.4.2016 1,40,000/- 2 23.6.2016 5.00, 000/- 3 27.6.2016 5,00,000/- 4 21.9.2016 68,000/- 5 3.10.2016 68,000/- 6 11.11.2016 1,000/- Total 12,77,000/- 11. The AO has not specifically commented on the withdrawals from M/s. NKGSB Co-operative Bank. The AO stated in para 9.6 of the impugned Assessment Order that the withdrawals from assessee bank account was not necessary instead assessee could have kept the same in fixed deposit. From perusal of the statement of cash withdrawals of M/s. NKGSB Co-operative Bank, it is clear that there were sufficient cash withdrawals available for making cash deposits during the demonetization period. The AO has not been able to pin point that these withdrawals are not available with the assessee and had been utilized for some other purposes (whereas AO has specifically commented on the cash withdrawals in two SBI accounts of the assessee). The AO had also stated that cash deposits during the demonetization period could have been made on a single day instead of depositing on different dates. According to me, this statement by the AO is not relevant to the issue. The examination by the AO ought to have been confined to the source of cash deposits made during the demonetization period. On the facts and circumstances of the case, since there are adequate cash withdrawals within a reasonable period prior to the date of demonetization, I am of the view that addition under section 69A of the Act is not warranted. Accordingly, I delete the addition made under section 69A of the Act. It is ordered accordingly. ITA No.719/Bang/2023 Page 6 of 6 12. In the result, appeal filed by the assessee is allowed. Pronounced in the open court on the date mentioned on the caption page. Sd/- Sd/- (LAXMI PRASAD SAHU)(GEORGE GEORGE K) Accountant Member Vice President Bangalore. Dated: 03.11.2023. /NS/* Copy to: 1.Appellants2.Respondent 3.DRP4.CIT 5.CIT(A)6.DR, ITAT, Bangalore. 7. Guard file By order Assistant Registrar, ITAT, Bangalore.