Meena Nayyar, New Delhi V. ACIT, Central Circle-20, New Delhi

ITA 8725/DEL/2019

AI Insights

The case involves an appeal by Smt. Meena Nayyar against the order of the CIT(A)-27, New Delhi, which sustained an addition of Rs. 1,11,820 to her income for the Assessment Year 2016-17. This addition was on account of cash deposited in her bank account. The assessee argued that this amount was minor compared to her total declared income and cited a similar case and a CBDT circular that advised against such additions for smaller amounts. The CIT(DR) supported the lower authorities' decision, but the Tribunal found merit in the assessee's arguments and reversed the addition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122008 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: E
• Next Hearing Date: 12-04-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 06-11-2019
• Other Referred Cases: Uma Agarwal vs. ITO
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E: NEW DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA No.8725/Del/2019 Assessment Year: 2016-17 Smt. Meena Nayyar, C/o Anil Jain DD & Co., 611, Surya Kiran Building, 19, K.G Marg, Delhi 110001 PAN AAFPN 7941 Q vs. The ACIT Central Circle-20, New Delhi (Appellant) (Respondent) For Assessee : Shri Anil Kumar Jain, CA Revenue For : Ms. Sarita Kumari, CIT(DR) Date of Hearing : 13.04.2023 Date of Pronouncement : 22.06.2023 ORDER PER CHANDRA MOHAN GARG, J.M. This appeal has been filed against the order of ld. CIT(A)-27, New Delhi dated 29.08.2019 for AY 2016-17. 2. The ld. counsel of the assessee submitted that except ground no. 5 the assessee does not want to press other grounds hence the same are dismissed and not pressed. The ground no. 5 read as follows:- 5. That on the facts and circumstances of the case and the provisions of law, the ld. CIT(A) has erred in sustaining an addition of Rs. 1,11,820/- on account of cash deposited in bank account. 3. The ld. counsel of assessee submitted that the ld. CIT(A) has erred in sustaining addition made by the Assessing Officer on account of cash deposit of Rs. 1,11,820/-. The ld. counsel submitted that the assessee for AY 2016-17 filed return of income wherein the assessee has shown income from house property situated at Indirapuram Ghaziabad amounting to Rs. 1,80,000/- and also shown income from business on presumptive basis as per section 44AD of the I.T Act 1961 and has also shown interest income from bank and the assessee has shown gross total income of Rs. 6,64,389/-. The ld. AR further submitted that the assessee received rental income in cash and also made business turnover of Rs. 24,98,680/- out of which some cash turnover was also ITA No.8725/Del/2019 2 included therefore amount of Rs. 1,11,820/- is a very small amount in comparison to the taxable income offered by the assessee therefore the same may kindly be deleted. 4. Further placing reliance on the order of ITAT Agra Bench in the case of Uma Agarwal vs. ITO dated 18.06.2021 in ITA 35/Agr/2021 for AY 2017-18 and CBDT instruction no. 3/2017 dated 21.02.2017. The ld. AR submitted that the Assessing Officer was prohibited from making any addition in the hands of assessee if the amount deposited in the bank was found to be less than 2.5 lakhs. Lastly the ld. counsel submitted that the addition made by the Assessing Officer may kindly be deleted. 5. Replying to the above, the ld. CIT(DR) supported the orders of the authorities below. 6. Undisputedly, the assessee has filed return of income for AY 2016-17 declaring gross total income of Rs. 6,64,389/- including rental income of Rs. 1,80,000/- presumptive business income u/s. 44AD of the Act of Rs. 4,25,180/- and income from other sources i.e. bank interest of Rs. 52,983/- and has paid due taxes etc. thereon. We further note that in the computation of income the assessee has also shown cash in hand of Rs. 1,31,460/-. The gross total income of assessee is Rs. 6,64,389/- and the impugned cash deposit amount is Rs, 1,11,820/- which is less than of 20% of gross total income declared by the assessee. It is also pertinent metion that in the CBDT Circular No. 3/2017 (supra) the Assessing Officers are directed by the board to resist from making any further verification or enquiry in a case where cash deposit to the bank is less than of Rs. 2.5 lakhs and in the present case the authorities below have ignored this circular. In view of foregoing, we are constraint to hold that the addition made by the Assessing Officer and uphold by the ld. CIT(A) is not sustainable and thus, we direct the Assessing Officer to delete the same. Accordingly, sole effective ground of assessee is allowed. 7. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 22.06.2023. Sd/- Sd/- (PRADIP KUMAR KEDIA) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 22 nd June, 2023. NV/- Copy forwarded to : 1. Appellant 2. Respondent ITA No.8725/Del/2019 3 3. CIT 4. CIT(A) 5. DR // By Order // Asstt. Registrar, ITAT, New Delhi