MANISHA AGGARWAL ,. V. ITO WARD - 70(3), NEW DELHI, .

ITA 1244/DEL/2024

AI Insights

The case involves Manisha Aggarwal, the appellant, who appealed against the order of the CIT(Appeal)/NFAC, Delhi, which sustained an addition of Rs. 11,00,000 under section 69A of the Income Tax Act, 1961, for the assessment year 2017-18. The addition was initially made by the AO due to unexplained cash deposits during the demonetization period. The CIT(A) partially allowed the appeal, reducing the addition but sustaining the remaining amount. The appellant contested that the additions were made without proper appreciation of the evidence and legal provisions, particularly concerning gifts received which should not be taxed as income under section 56 of the Act. The Tribunal, after hearing the arguments and considering the additional evidence, decided to remit the matter back to the AO for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31672 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: RAJEEV SAXENA; SUMANGLA
• Keywords: Opportunity of being heard; Additional evidence; Gift; Earning of tax free income
• Section: 143(3); 142(1); 143(2); 56; 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, ITA NO. 1244/Del/2024 A.YR. : 2017-18 MANISHA AGGARWAL H-35, 1st floor, Jangpura Extension, New Delhi – 14 (PAN: BKEPM1054R) VS. ITO, WARD 70(3), NEW DELHI CIVIC CENTRE, MINTO ROAD, NEW DELHI – 2 (APPELLANT) (RESPONDENT) Appellant by : Shri Rajeev Saxena, Adv. & Ms. Sumangla Saxena, Adv. Respondent by : Shri Sanjay Kumar, Sr. DR. Date of hearing : 18.02.2025 Date of pronouncement : 21.02.2025 ORDER The Assessee has filed the instant Appeal against the Order of the Ld. CIT(Appeal)/NFAC, Delhi dated 23.02.2024, relating to assessment year 2017-18 on the following grounds:- 1. That the NFAC has erred in law as well as on facts in sustaining the addition amounting to Rs. 11,00,000/- u/s. 69A of the Act, ignoring the evidence furnished before the AO as well as under rule 46A, explanation and judicial pronouncements submitted by the assessee which cannot be rejected arbitrarily. 2. That the NFAC has erred in sustaining the addition without appreciating that all the documents had been duly uploaded mentioning the addresses, names and close relation with the assessee, whose gifts received at the time of marriage as well on first birthday of her daughter in August, 2016 cannot be put to tax as they are not income within the meaning of section 56 of Act. 2. Brief facts of the case are that in this case the assessee filed original return of income on 23.8.2017 declaring taxable total income of Rs.7,84,440/-. The case was selected for scrutiny through CASS under “Limited Scrutiny” due to reasons ‘cash deposit during demonetization period”. Notice u/s. 143(2) dated 26.9.2018 was issued and served upon the assessee. Subsequently, notices u/s. 142(1) of the Act dated 5.8.2019 alongwith questionnaire was issued and served upon the assessee and was asked to file the documentary evidence in 2 | P a g e support of source of cash deposit made during the period of demonetization. In response, assessee filed it reply through e-filing portal by stating that “I had deposited Rs. 13,50,000/- in my saving bank account in Punjab and Sindh bank during 09.11.2016 to 30.12.2016 which was out of previous savings.” AO noted that since the assessee has merely stated that the cash deposit was made from out of previous saving and no documentary evidence was produced in support of the same. Another notice u/s. 142(1) dated 6.11.2019 was issued to file documentary evidence in support of her claim of previous savings. However, the assessee has not filed any documentary evidence in support of the same. Therefore, the assessee was given final opportunity to file details in support of his contention through show cause notice vide show cause notice dated 16.11.2019. In response, assessee filed her reply online through e-filing account on e-filing portal by stating that the all the money which he received was either out of his taxable income or exempt income as money received on occasion of marriage and pin money both are exempt incomes. After considering the reply, AO held that since the assessee has made cash deposits amounting to Rs. 13,50,000/- during the period of demonetization and appearing into the bank accounts of the assessee relevant to AY 2017-18, which remained unexplained and the assssee has failed to give any explanation about the nature and source of cash deposits, hence, the value of cash deposits, appearing in the bank accounts was deemed as unexplained money u/s. 69A and added to the total income of the assessee and taxed u/s. 115BBE of the Act by assessing the total income at Rs. 21,34,440/- u/s. 143(3) of the Act. 3. Upon assessee’s appeal, Ld. CIT(A) has partly allowed the appeal of the assessee has given the relief of Rs. 2,50,000/- and sustained the remaining addition to the extent of Rs. 11,00,000/-. 4. Against the aforesaid order, Assessee is in appeal before me. 5. I have heard both the parties and perused the records. At the time of hearing Ld. Counsel for the assessee submitted that NFAC has erred in law as well as on facts in sustaining the addition amounting to Rs. 11,00,000/- u/s. 69A of the Act, ignoring the evidence furnished before the AO as well as under rule 46A, explanation and judicial pronouncements submitted by the assessee which cannot be rejected arbitrarily. He further submitted that the NFAC has also erred in sustaining the addition without appreciating that all the documents had been duly uploaded mentioning the addresses, names and close relation with the assessee, whose gifts received at the time of marriage as well on first birthday of her daughter in August, 2016 cannot be put to tax as they are not income within 3 | P a g e the meaning of section 56 of Act. During the hearing, Ld. AR has filed an application for admission of additional evidence under Rule 29 of the ITAT Rules, 1963 and requested that the evidences mentioned therein needs to be admitted under Rule 29 of the ITAT Rules, 1963 and prayed that the said list of documents may kindly be considered and be allowed to be produced and admitted as additional evidence under Rule 29 of the ITAT Rules, 1963 and requested to remit the matter before the AO to enable the assessee to canvass her case properly. Ld. DR did not controvert the submissions of the Ld. AR. In view of the aforesaid facts and circumstances of the case and in the interest of justice, first I admit the additional evidences filed before us and remit back the issues in dispute to the file of the AO for fresh consideration, after giving adequate opportunity of being heard to the assessee with the directions to consider the additional evidences admitted by me and accordingly decide the issues in dispute, in accordance with law. 6. In the result, the Assessee’s appeal is allowed for statistical purposes. Order pronounced on 21/02/2025. Sd/- (SHAMIM YAHYA) ACCOUNTANT MEMBER SR Bhatnagar Copy forwarded to:- 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT Assistant Registrar "