KILARU RAJYALAKSHMI,VIJAYAWADA V. .INCOME TAX OFFICER, WARD-1(2), VIJAYAWADA

ITA 210/VIZ/2024

AI Insights

The case involves Kilaru Rajyalakshmi, a retired employee of State Bank of India, who appealed against the order of the CIT(A) which sustained an addition of Rs. 7,61,000 to her income for the Assessment Year 2017-18. This addition was initially made by the Income Tax Officer (ITO) under Section 69A read with Section 115BBE of the Income Tax Act, 1961, due to unexplained cash deposits amounting to Rs. 13 lakhs during the demonetization period. The CIT(A) granted partial relief by reducing the addition to Rs. 7,61,000. The Tribunal's decision to delete Rs. 2,00,000 was based on the assessee's sister's repayment of a hand loan, supported by bank statements. However, the Tribunal upheld the addition of Rs. 5,61,000 due to insufficient evidence regarding the source of these funds.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 46038 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 09-05-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: APARNA VILLURI
• Assessee Lawyers: GVN HARI
• Section: 143(3); 142(1); 143(2); 13; 69A

Judgement Text

"1 आयकरअपीलीयअधिकरण, धिशाखापटणमपीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM श्री क े नरसिम्हा चारी, न्यासिक िदस्यएिं श्री एस बालाक ृष्णन, लेखा सदस्य क े समक्ष BEFORE SHRI K NARASIMHA CHARY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकरअपीलसं./ I.T.A. 210/Viz/2024 (निर्धारणवर्ा/ Assessment Year : 2017-18) Kilaru Rajyalakshmi, Vijayawada. PAN: AECPK5985J Vs. Income Tax Officer, Ward-1(2), Vijaywada. (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधर्थीकीओरसे/ Assessee by : Sri GVN Hari, AR प्रत्यधर्थीकीओरसे/ Revenue by : Dr. Aparna Villuri, Sr. AR सुिवधईकीतधरीख/ Date of Hearing : 04/12/2024 घोर्णधकीतधरीख/Date of Pronouncement : 13/12/2024 O R D E R PER S. BALAKRISHNAN, Accountant Member : This appeal filed by the assessee is against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (“Ld. CIT(A)”) in DIN & Order No. ITBA/NFAC/S/250/2023-24/1062913786(1), dated 19/03/2024 2 arising out of the order passed U/s. 143(3) of the Income Tax Act, 1961 (“the Act”) for the AY 2017-18. 2. Brief facts of the case are that the assessee is an individual and a retired employee of State Bank of India. The assessee filed her return of income on 20/07/2017 admitting a total income of Rs. 3,89,200/-. The assessee’s case was selected for a limited scrutiny through CASS on the issue of “cash deposits during demonetization period”. Accordingly, notice U/s. 143(2) of the Act, dated 6/9/2018 was issued and served on the assessee. In response, the assessee filed her reply dated 20/09/2018 and made submissions. Thereafter, notice U/s. 142(1) of the Act dated 17/7/2018 was also issued to the assessee. In response, the assessee furnished the information as called for and submitted that she got the amounts returned by her sister and brother and the same were in turn deposited by the assessee in her bank account during demonetization period. The assessee further submitted that the cash deposits made during demonetization period are out of the withdrawals made from her bank accounts during October, 2014 to December, 2015 which were kept for assessee’s medical emergencies. Thereafter, the Ld. AO issued letters to the assessee’s sister and brother and 3 obtained the information. The Ld. AO also perused the bank accounts of the assessee as well as the submissions made by the assessee. Accordingly, the Ld. AO came to a conclusion that it is beyond the human probability to withdraw the cash from bank accounts in different intervals and retaining the same unspent for a period of years when the assessee has banking facilities and involved in banking transactions regularly. Accordingly, the Ld. AO treated the cash deposits of Rs. 13 lakhs made during the demonetization period as unexplained income of the assessee and made addition U/s. 69A r.w.s 115BBE of the Act. Thus, the Ld. AO computed the total income of the assessee at Rs. 16,89,200/- against the returned income of Rs. 3,89,200/- and passed the assessment order U/s. 143(3) of the Act, dated 21/09/2019. While passing the assessment order, the Ld. AO also initiated the penalty proceedings U/s. 271AAC of the Act. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). 3. On appeal, after considering the submissions of the assessee, the Ld. CIT(A) granted relief to the assessee to the extent of Rs. 5,39,000/- and sustained the addition of Rs. 7,61,000/-. Thus, the Ld. CIT(A) partly allowed the appeal of the 4 assessee. Against the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal: “1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A) is not justified in not deciding the appeal ex-parte. 3. The Ld. CIT(A) is not justified in sustaining the addition of Rs. 7,61,000/- made U/s. 69A of the Act towards unexplained cash deposits during demonetization period. 4. Any other ground that may be urged at the time of appeal hearing.” 4. At the outset, the Learned Authorized Representative (“Ld. AR”) submitted that without properly appreciating the submissions of the assessee with respect to the cash deposits made during the demonetization period, the Ld. CIT(A) sustained the addition made by the Ld. AO. The Ld. AR further submitted that Smt. Kilaru Vijayalakshmi, sister of the assessee, vide letter dated 14/08/2019, has categorically explained before the Ld. AO that for the purpose of her son’s Visa interview, she has taken Rs. 6 lakhs as hand loan from the assessee, and the same was returned back in May-2015. It was also submitted that while repaying the hand loan to the assessee, Rs. 4 lakhs was paid by Smt Kilaru Vijayalakshmi through bank transfers and Rs. 2 lakhs was paid in cash on 01/05/2015. To substantiate the sources for 5 cash payments, the bank statements of Smt Kilaru Vijayalakshmi were also submitted before the Ld. Revenue Authorities. However, the Ld. AO and the Ld. CIT(A) did not consider the same. The Ld. AR further submitted that the cash deposits are nothing but the repayment of hand loans from the assessee’s sister and her brother and the withdrawals made from the assessee’s own bank accounts which were kept to meet the health emergencies of the assessee. These facts were demonstrated by the assessee before the Ld. Revenue Authorities however, the Ld. AO did not consider the same and the Ld. CIT(A) also not justified in properly appreciating these facts. Therefore, the Ld. AR pleaded that the addition sustained by the Ld. CIT(A) may be deleted. 5. On the other hand, the Ld. Departmental Representative (“Ld. DR”) vehemently opposed to the submissions of the Ld. AR and submitted that after thorough verification and examining the facts and submissions of the assessee as well as the evidences submitted by the assessee, the Ld. CIT(A) granted part relief to the assessee. Therefore, the decision of the Ld. CIT(A) needs no interference. 6. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue 6 Authorities. It is a fact that in the case of the assessee, the Ld. AO made addition of Rs. 13 lakhs U/s. 69A r.w.s 115BBE of the Act since the assessee could not substantiate her claim of cash deposits during the demonetization period. On appeal, the Ld. CIT(A) considered the submissions of the assessee and granted part relief to the extent of Rs.5,39,000/-. Before us, it was the submission of the Ld. AR that while sustaining the addition of Rs. 7,61,000/-, the Ld. CIT(A) did not consider the fact that Smt. Kilaru Vijayalakshmi, sister of the assessee, vide letter dated 14/08/2019, has categorically explained about the hand loan given by the assessee ie., for the purpose of Visa interview of her son, and repaid the same partly by bank transfers (Rs. 4 lakhs) and partly Rs.2,00,000/- by cash. To demonstrate the same, the Ld. AR also submitted the confirmation letter and bank statements of Smt. Vijayalakshmi in support of his argument. On perusal of the same, we are of the considered view that the assessee has properly explained the cash deposit of Rs. 2,00,000/- received from her sister in lieu of repayment of hand loan. Therefore, we hereby delete the addition to the extent of Rs. 2,00,000/-. For the balance amount of addition confirmed by the Ld. CIT(A) ie., Rs. 5,61,000/- (Rs. 7,61,000 – Rs. 2,00,000), 7 the assessee could not demonstrate before us along with any cogent evidence that the assessee made the cash deposits out of the withdrawals made over the years and the assessee maintained the cash on hand for her medical emergencies until the same was deposited in her bank accounts due to demonetization. Under these circumstances, in the absence of any cogent documentary evidence, we hereby uphold the decision of the Ld. Revenue Authorities and sustain the addition of Rs. 5,61,000/-. It is ordered accordingly. 7. In the result, appeal filed by the assessee is part allowed. Pronounced in the open Court on 13th December, 2024. Sd/- Sd/- (श्री क े नरसिम्हा चारी) (एस बालाक ृष्णन) (K NARASIMHA CHARY) (S.BALAKRISHNAN) न्याधयकसदस्य/JUDICIAL MEMBER लेखासदस्य/ACCOUNTANT MEMBER Dated :13.12.2024 OKK - SPS 8 आदेशकीप्रतितितिअग्रेतिि /Copy of the order forwarded to:- 1. निर्धाररती/ The Assessee –Kilaru Rajyalakshmi, D.No. 12-70, Driver Peta, Penamaluru Centre, Poranki, Vijayawada, Andhra Pradesh- 521137. 2. रधजस्व/The Revenue – Income Tax Officer, Ward-1(2), O/o. ITO, CR Building “Annex”, MG Road, Vijayawada, Andhra Pradesh-520002. 3. The Principal Commissioner of Income Tax, 4. आयकरआयुक्त (अपील)/ The Commissioner of Income Tax 5. नवभधगीयप्रनतनिनर्, आयकरअपीलीयअनर्करण, नवशधखधपटणम/ DR,ITAT, Visakhapatnam 6. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam "