Ashish Kiritkumar Shah, Ahmedabad V. The Income Tax Officer, Ward-1,Intl. Taxn., Ahmedabad

ITA 92/AHD/2023

AI Insights

The case revolves around the appeal by Ashish Kiritkumar Shah against the order of the Commissioner of Income-tax (Appeals)-13, Ahmedabad, which confirmed the addition of Rs.12,11,500 as unexplained money under section 69A of the Income Tax Act, 1961. The assessee, an NRI, had made significant cash deposits during the demonetization period, which were questioned by the tax authorities. The Assessing Officer initially added Rs.14,61,500 as unexplained money, which was partly upheld by the CIT(A). The Tribunal, however, accepted the assessee's explanation that the deposits were from legitimate sources, including past savings and withdrawals for medical emergencies, and thus allowed the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300027 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-06-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 12-02-2023
• Other Referred Cases: Shri Sampathraj Rakesh Kumar Vs. ITO (ITA No. 1451/Bang/2018), CIT Vs. Manoj Indravadan Chokshi (Tax Appeal No. 821 of 2014), ITO vs. Ashish Amratlal Patel (ITA No. 2703/Ahd/2012)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources
• Section: 133(6); 143(2); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD \ BEFORE Ms. SUCHITRA R. KAMBLE, JUDICIAL MEMBER ITA No. 92/Ahd/2023 Assessment Year: 2017-18 Ashish Kiritkumar Shah, C/702, Tulip Citadel Flats, Behind Shreyas School, Manekbaug, Ambawadi, Ahmedabad-380015 PAN : ACTPS 7649 N Vs Income Tax Officer, Ward-1, Intl. Tax, Ahmedabad अपीलाथ牸 अपीलाथ牸अपीलाथ牸 अपीलाथ牸/ (Appellant) 灹瀄 灹瀄 灹瀄 灹瀄 यथ牸 यथ牸यथ牸 यथ牸/ (Respondent) Assessee by : Shri Hardik Vora, Advocate Revenue by : Shri Suraj Bhan Garwal, Sr. DR सुनवाई क琉 तारीख/Date of Hearing : 14/06/2023 घोषणा क琉 तारीख /Date of Pronouncement : 28/06/2023 आदेश आदेशआदेश आदेश/O R D E R This appeal is filed by the assessee against the order dated 29.12.2022 passed by the Commissioner of Income-tax (Appeals)-13, Ahmedabad [“CIT(A)” in short] for Assessment Year 2017-18. 2. The Grounds of appeal are as under :- “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(Appeals) has erred in confirming addition of Rs.12,11,500/- on unexplained money u/s 69A of the Act. 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(Appeals) has erred in partly confirming the addition amounting to Rs.12,11,500/- on unexplained money u/s 69A of the Act without considering that the cash deposited during demonetization period was out of past withdrawals and savings of spouse. 3. On the facts and circumstances of the case as well as law on the subject, the learned CIT(Appeals) has erred in confirming invocation of provisions of section 115BBE of the Act. 4. It is therefore prayed that the above addition/disallowance made by the assessing officer may please be deleted.” ITA No. 92/Ahd/2023 Ashish Kiritkumar Shah Vs. ITO AY : 2017-18 2 3. Assessee filed his return of income on 05.08.2017 declaring total income of Rs.17,600/-. Case was selected for scrutiny and notice u/s 143(2) of the Income-tax Act, 1961 [“the Act” in short] was issued on 18.08.2018 which was duly served upon the assessee. In response to the notice, the assessee furnished letter and computation of income on 04.09.2018 by status “NRI”. The Assessing Officer observed that there was certain cash deposits during the demonetization period on or before 23.09.2019 and the Assessing Officer called upon the assessee the furnish the details of the same. During the assessment proceedings, notices u/s 133(6) of the Act were issued to the Branch Manager of Bank of Baroda and the Branch Manager of Bank of Maharashtra for furnishing bank statement, bank accounts held during the year, FDR/loan account, details of cash deposits made from 09.11.2016 to 31.12.2016 in old 500 and 1000 rupee notes with pay-in-slip and account opening form KYC documents. In response to the same, the banks furnished the required details. The Assessing Officer observed that the assessee has huge credit entries and cash deposits of Rs.14,61,500/- in his bank accounts during the demonetization period. A show-cause notice was issued on 11.11.2019 thereby asking as to why the amount of Rs.68,19,640/- (Rs.14,61,500/- + Rs.53,58,140/-) should not be added to the total income of the assessee. In response to the said show-cause notice, the assessee furnished his reply dated 28.11.2019. The Assessing Officer, after going through the reply, made addition of Rs.14,61,500/- as unexplained money u/s 69A of the Act. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. ITA No. 92/Ahd/2023 Ashish Kiritkumar Shah Vs. ITO AY : 2017-18 3 5. The learned AR submitted that the assessee is “NRI” by status and filed his return of income for AY 2017-18 on 05.08.2017 declaring total income of Rs.17,600/-. The Assessing Officer has raised query regarding cash deposited in bank accounts merely based on details received from bank in response to notice u/s 133(6) of the Act. The learned AR further submitted that the assessee has withdrawn cash of Rs.11,00,000/- on 22.04.2015 for emergency purpose as he is a heart patient and already had an angioplasty treatment and his wife being diabetic and palpitation patient and also his daughter was planning to go to USA for further studies. Assessee submitted medical report of himself and his wife, which was submitted during assessment proceedings as well. However, the Assessing Officer has not considered the same for the sole reason that the assessee has paid medical insurance premium. In this regard, the learned AR submitted that the cost of medical treatment has increased manifold over a period of time and thus appropriate medical treatment can be out of the reach of citizens unless the citizens are covered by such medi-claim policy. However, solely paying insurance premium does not give guarantee that assessee would not require cash on hand for emergency purpose. For emergencies, medi-claim is not always option as cashless claims takes sometime. Thus, learned AR submitted that it cannot be the ground for rejecting claim of assessee without any adverse finding by the Assessing Officer. The learned AR further submitted that the cash of Rs.3,61,500/- deposited in bank account during demonetization period was cash out of earlier saving of assessee’s wife, i.e. Mrs. Ami Ashish Shah who is also joint account holder in Axis Bank. However, the Assessing Officer has not considered the same and rejected on the ground that assessee’s spouse should have deposited savings amount in her own bank account instead of assessee’s bank account. The learned AR further submitted that the ITA No. 92/Ahd/2023 Ashish Kiritkumar Shah Vs. ITO AY : 2017-18 4 assessee is holding joint bank account with his wife and all joint bank accounts have two or more owners and each owner has the full right to withdraw, deposit, and otherwise manage the account’s funds. Considering the fact that the assessee is NRI and living with children, bare minimum amount like Rs.3,61,500/- is most acceptable in any household. From the perusal of bank accounts of the assessee, it can be derived that there is constant deposits and withdrawals of cash in the bank accounts. The entire transaction of withdrawals and deposits are duly reflected in the bank account of the assessee and are verifiable from relevant records. The learned AR also submitted that the Revenue Authorities were not competent to dictate as to what the assessee should do with the money withdrawn from the bank. As long as the source is explained and established and if money is withdrawn from one account and re- credited, then there is no question of making addition under the head as “income from undisclosed sources”. The learned AR relied upon the decision of Tribunal in case of Shri Sampathraj Rakesh Kumar Vs. ITO (ITA No. 1451/Bang/2018). The learned AR also relied upon the decision of Hon’ble jurisdictional High court in the case of CIT Vs. Manoj Indravadan Chokshi (Tax Appeal No. 821 of 2014). The learned AR also relied upon the decision of jurisdictional bench in the case of ITO vs. Ashish Amratlal Patel (ITA No. 2703/Ahd/2012). 6. The learned DR submitted that the cash withdrawals and the bank deposits are after a long gap of 19 months and, therefore, there is no plausible explanation given by the assessee in respect of the withdrawals and their deposits. It is pertinent to note that the assessee has not explained the cash deposit of Rs.14,61,500/- in the year 2017-18 as the withdrawal was stated to be made in the year 2015 for medical purpose. Therefore, the learned DR submitted that ITA No. 92/Ahd/2023 Ashish Kiritkumar Shah Vs. ITO AY : 2017-18 5 the Assessing Officer as well as the CIT(A) has taken proper cognizance of each and every event of withdrawals and deposits and made addition to that extent u/s 69A of the Act as unexplained money. 7. Heard both the parties and perused all the relevant material available on record. It is an undisputed fact that the money had withdrawn by the assessee in the year 2015 as stated out by the assessee and observed by the Assessing Officer. The money belongs to the assessee. The assessee, due to medical problems of himself as well as of his wife, has to keep the amount in hand for the emergency period as per the explanation of the assessee. From the perusal of medical reports, it appears that the assessee requires constant monitoring of his health and, therefore, having cash in hand is practical solution for the assessee for any medical emergencies. The Assessing Officer as well as the CIT(A) has not pointed out that the deposits made in the year 2017-18 are not that of assessee’s money. The explanation given by the assessee about the withdrawals and the deposits appears to be plausible as the assessee has to deposit the amount because of the demonetization declared in the country; but the amount is a huge amount for medical emergencies and, therefore, the alternative argument made by the learned AR that the amount of Rs.11,00,000/- be accepted as cash balance appears to be more plausible. As regards to amount of Rs.3,61,500/- was out of the savings of the assessee also emerged with the statement made by the learned AR that the cash balance should be accepted of the assessee. But from the perusal of the records, it appears that both the assessee and his spouse are on medical treatment which requires substantial amount of cash in hand for the emergencies. In fact, the explanation given by the assessee that his daughter was also planning to go to USA for ITA No. 92/Ahd/2023 Ashish Kiritkumar Shah Vs. ITO AY : 2017-18 6 further studies also requires that much amount. The assessee is also having NRI status; therefore, the explanation given by the assessee about the withdrawals of cash and deposits of the said cash appear to be genuine. Hence, this appeal of the assessee is allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 28/06/2023 at Ahmedabad. Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER Ahmedabad, Dated 28/06/2023 *Bt आदेश क琉 灹ितिलिप अ灡ेिषत/Copy of the Order forwarded to : 1. अपीलाथ牸 / The Appellant 2. 灹瀄यथ牸 / The Respondent. 3. संबंिधत आयकर आयु猴 / Concerned CIT 4. आयकर आयु猴)अपील (/ The CIT(A)- 5. िवभागीय 灹ितिनिध ,आयकर अपीलीय अिधकरण/DR,ITAT, Ahmedabad, 6. गाड榁 फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Ahmedabad 1. Date of dictation- ...26.06.2023...... 2. Date on which the typed draft is placed before the Dictating Member ...27.06.2023......... Other member.... .......... 3. Date on which the approved draft comes to the Sr.P.S./P.S. - ...27.06.2023............... 4. Date on which the fair order is placed before the Dictating Member for Pronouncement ...28.06.2023 5. Date on which the file goes to the Bench Clerk....28.06.2023............... 6. Date on which the file goes to the Head Clerk.................................. 7. The date on which the file goes to the Assistant Registrar for signature on the order......... 8. Date of Despatch of the Order..................