SURENDRA KUMAR JAISWAL, KANPUR V. Income Tax Officer-1(1)(4), Kanpur

ITA 78/LKW/2023

AI Insights

The case involves Surrendra Kumar Jaiswal, who appealed against the order of the NFAC, which partially sustained the addition of Rs. 11,00,000 as unexplained cash deposits in his bank account for the Assessment Year 2017-18. The Assessing Officer had initially added this amount to the assessee's income under Section 69A of the Income Tax Act, 1961, due to insufficient explanation of the cash deposits. The First Appellate Authority reduced the addition to Rs. 2,91,230 after considering certain exemptions applicable to senior citizens and estimating additional cash income. The Tribunal dismissed the appeal, agreeing with the NFAC's findings and noting that the assessee had not maintained regular books of account, and the statements of affairs provided were self-serving and lacked evidentiary value.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123094 (ITAT-LUCKNOW)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 15-08-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 05-03-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital Gains
• Section: 143(1); 69A; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “SMC”, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.78/LKW/2023 A.Ys. 2017-18 Income Tax Office –(1)(4), Aayakar Bhavan, 16/69, Civil Lines, Kanpur Vs. Surrendra Kumar Jaiswal, 65/77, Moti Mohal, Kanpur PAN AAPPJ 010L (Respondent) (Appellant) Shri Shailendra Sachan, Advocate Appellant by Shri Sanjeev Krishna Sharma, Addl. CIT(DR) Respondent by 16/08/2023 Date of hearing 22/08/2023 Date of pronouncement O R D E R This appeal is preferred by the assessee against the order dated 16.12.2022 passed by the National Faceless Appeal Centre (NFAC), Delhi for Assessment Year (AY) 2017-18. 2. The brief facts of the case are that the assessee had filed his return of income for the captioned assessment year, declaring income of Rs.9,26,320/-. Subsequently, the assessee’s case was selected for limited scrutiny for the reason of cash deposits and transactions in property as well as Capital Gains/loss on sale of property. It was seen from the 2 ITA No. 78/Lkw/2023 record by the Assessing Officer that the assessee had deposited cash amounting to Rs.15,05,500/- in his bank account maintained with Punjab National Bank and the assessee was required to explain the source of the cash deposit. In response to the query raised by the Assessing Officer, it was the assessee’s submission that the cash deposited was from the cash in hand as on 31.03.2016 which was to the tune of Rs.14,97,254/-, whereas the remaining was from rental receipts. However, the Assessing Officer observed that although the assessee had filed statement of affairs for Financial Year (F.Y.) 2011-12, 2014-15, 2015-16 and 2016-17 claiming that he was having cash in hand of Rs.14,97,254/- as on 31.03.2016, the assessee could not establish this fact with any documentary evidences and also that these statement of affairs were unverifiable. It was also observed by the Assessing Officer that the assessee was not having any business activity from year to year and the income from property was shown only at Rs.2,29,740/-, whereas the income from Capital Gain was Rs.3,76,570/- and income from other sources was Rs.3,30,010/-. It was also observed by the Assessing Officer that in Assessment Years 2016-17 and 2015-16, only income from house property had been declared. Thus, the Assessing Officer was of the view that the assessee’s claim of having cash in hand of Rs.14,97,254/- 3 ITA No. 78/Lkw/2023 remained unverifiable and, therefore, deposits of Rs. 11,00,000/- remained unexplained. The Assessing Officer proceeded to add an amount of Rs.11,00,000/- to the income of the assessee u/s.69A of the Income Tax Act, 1961 (hereinafter called the ‘Act’) and also invoked the provisions of Section 115BBE of the Act. 3. Aggrieved, the assessee approached the ld. First Appellate Authority who partly allowed the assessee’s appeal by observing that as per Instruction No. 3/2017 issued by the Central Board of Direct Taxes dealing with demonetization cases, a limit of Rs.5.00 lacs was to be allowed for cash for people over 70 years of age. Accordingly, Rs.5.00 lacs was held to have been explained. The ld. First Appellate Authority also gave a further benefit of 1/3 rd of the returned income as being the cash earned during the year under consideration. The remaining amount i.e. Rs.2,91,230/- was confirmed as being unexplained. 4. Against this order of the ld. First Appellate Authority, as discussed above, the assessee is now in appeal before this Tribunal and has challenged the partial sustenance of the addition by raising the following grounds of appeal: 4 ITA No. 78/Lkw/2023 “1. The learned CIT (A) erred in law and in facts in upholding the addition of Rs. 2,91,230/-as unexplained cash u/s 69A against the total addition of Rs.11,00,000/- made by the AO. 2.The learned CIT (A) denied the information presented by the assessee regarding his source of cash deposits amounting to Rs. 11,00,000, which assessee in his submission already told the source which were from past savings and also being a regular income tax assessee since long back. 3.The learned CIT(A) gave 1/3rd benefit of assessee's returned income without citing any provision of law that authorizes him to do so, thereby acting on his whims and fancies. Therefore, he estimated this relief and willfully not allowed full relief amounting to Rs.11,00,000/- 2. The learned CIT(A) erred in understanding the source of cash deposits by the assessee and disregarded the same in his order, despite the full balance sheet being submitted by the assessee having "cash in hand" of Rs.14,97,254/- as on 31.03.2016. 5. Learned CIT(A) although accepting the fact that assessee was not required to maintain books of accounts and hence the totality of statement of affairs cannot be wrong still not gave full relief or agreed with asessess explained cash deposit of Rs.11,00,000. 6. Learned CIT(A) hereby erred in restricting/confirming as unexplained cash in hand which is to be taxed u/s the addition of Rs.291230/- by applying the provisions of section 69A read with section 115BBE of the I.T.Act, 1961 which addition is contrary to facts, bad in law be deleted.” 5. At the outset, the ld. Authorized Representative submitted that the appeal of the assessee was time barred by 19 days and he drew my attention to the medical certificate and an affidavit which had been filed along with delay of condonation application wherein, it has been submitted that the assessee had been advised complete bed rest for the 5 ITA No. 78/Lkw/2023 period 02.01.2023 to 28.02.2023 as he was suffering from Jaundice and Intestine Necrosis. The ld. Authorized Representative prayed that assessee is a 76 years old person and in view of his ill health, which is duly supported by the affidavit and the medical certificate, the delay of 19 days may be condoned. 6. Per contra, the ld. Senior Departmental Representative had no objection to the delay being condoned. 7. I have heard both the parties and on the issue of condonation of delay and looking into the evidences submitted by the assessee as proof of his ill health, I condone the delay of 19 days and admit the appeal for hearing. 8. Arguing the merits of the case, the ld. Authorized Representative submitted that the assessee has been a tax payer for the past many years and, therefore, having cash in hand of Rs.14,97,254/- as on 31.03.2016 cannot be doubted. He drew my attention to the observations of the ld. First Appellate Authority in the impugned order wherein the ld. First Appellate Authority in Paragraph 8 of his order has observed that the appellant has been filing returns regularly and one can very well accept the fact that he would have received some amount in 6 ITA No. 78/Lkw/2023 cash during the business of dealing in the property. It was submitted that, therefore, the ld. First Appellate Authority was wrong in giving benefit of cash earned during the year only to the tune of 1/3 rd of the returned income. It was submitted that the assessee was having the cash in hand of Rs.14,97,254/- as per the various statement of affairs submitted by the assessee during the course of assessment proceedings and the same cannot be rejected without any basis. 9. Per contra, the ld. Senior Departmental Representative supported the orders of the ld. First Appellate Authority and submitted that the ld. CIT(A) had already given substantial relief to the assessee and that no further relief should be given to the assessee. 10. On a specific query by the Bench, the ld. Authorized Representative fairly accepted that the assessments in earlier years were all completed u/s. 143(1) of the Act and that the statement of affairs, as filed by the assessee during the course of assessment proceedings in the captioned assessment year, had never been produced or scrutinized by the Income Tax Department in earlier assessment years. 11. I have heard the rival submissions and have also gone through the records. The assessee does not maintain any regular books of account. 7 ITA No. 78/Lkw/2023 The source of income during the captioned assessment year has been through Capital Gains, rental receipts and income from other sources. It is also to be noted that the assessee did not earn any income from capital gains in Assessment Years 2016-17 and 2015-16 wherein only income from house property had been declared. As per the admittance of the ld. Authorized Representative himself, the statement of affairs filed before the Assessing Officer for F.Ys 2011-12, 2014-15, 2015-16 and 2016-17 were never scrutinized or even filed before the Income Tax Department in cases pertaining to those years. Therefore, I agree with the observation of the Assessing Officer on the point that these statement of affairs are only self serving documents and do not have any evidentiary value. It is further seen that as per Instruction No.3/2017 issued by the Central Board of Direct Taxes, taxpayers above 70 years of age are to be allowed benefit of Rs.5.00 lacs of cash out of earlier income or savings. The ld. First Appellate Authority has already given benefit of Rs.5.00 lacs while partly allowing the assessee’s appeal. Furthermore, the ld. First Appellate Authority has also granted a further benefit of 1/3 rd of the returned income as having been earned in cash during the year. Thus, in my considered opinion, the ld. First Appellate Authority has again been very considerate on the issue. On this factual 8 ITA No. 78/Lkw/2023 matrix, thus, it is my considered view that the assessee has already been allowed the benefit which could legally be allowed to him and on the facts of this case no further relief is called for. Accordingly, I dismiss the grounds raised by the assessee in the captioned appeal and uphold the findings arrived at by the NFAC. 12. In the result, appeal filed by the assessee stands dismissed. (Order pronounced in the open court on 22/08/2023) Sd/- (SUDHANSHU SRIVASTAVA) JUDICIAL MEMBER Aks – Dtd. 22 /08/2023 Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) Departmental Representative (5) Guard File By order Assistant Registrar