MEHTA SEEMA,GURGAON V. INCOME TAX OFFICER, GURGAON

ITA 4111/DEL/2024

AI Insights

The case revolves around the appeal by Mehta Seema against the order of the Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, which upheld the addition of Rs. 30,00,000 as unexplained cash deposit during the demonetization period. The Income-tax Officer had initially made this addition, questioning the source of cash deposits in the assessee's bank accounts. The Tribunal examined the evidence presented, including the audited financials and the details of the imprest account, and found no substantial proof of manipulation or misuse. Additionally, the Tribunal addressed the challenge regarding the addition of an unsecured loan of Rs. 8,27,000, which was also found to be substantiated by adequate documentation and explanations provided by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 30491 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 68; 69A

Judgement Text

"1 ITA no. 4111/Del/2024 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI Ms. MADHUMITA ROY, JUDICIAL MEMBER ITA No. 4111/DEL/2024 Assessment Year: 2017-18 Mehta Seema, 1089, Sector-7 Extn., Urban Estate, Gurgaon-122001. PAN- BGUPS 0642 H Vs Income-tax Officer, Ward-2(5), Gurgaon. APPELLANT RESPONDENT Assessee represented by Shri Atal Puri, CA Department represented by Sh. Sanjay Kumar, Sr. DR Date of hearing 27.02.2025 Date of pronouncement 21.03.2025 O R D E R PER Ms. MADHUMITA ROY, JM: The instant appeal, filed by the assessee, is directed against the order dated 05.07.2024 passed by the learned Commissioner of Income-tax (Appeals)/ National Faceless Appeal Centre (NFAC), Delhi, arising out of the order dated 19.12.2019 passed by the Income-tax Officer, Ward 2(5), Gurgaon, under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), for assessment year 2017-18 2. Facts leading to the instant appeal are that the assessee made cash deposits of Rs. 1,03,51,500/- in her bank account maintained with PNB and Canara Bank respectively during demonetization period. The source thereof was directed to be 2 ITA no. 4111/Del/2024 furnished and notice thereupon was served upon the assessee. The assessee replied that Rs. 30,00,000/- was deposited from the imprest account shown in the balance- sheet under the head ‘loan & advances’ and balance 73,51,500/- was deposited from business operation. Details of imprest was duly filed before the learned AO as is evident from page 2 of the order passed. The explanation in regard to cash sales was accepted. The explanation in regard to imprest was rejected in the absence of any concrete evidence filed by the assessee. Further that the financials for the period commencing from 1.4.2015 to 31.3.2016 were not uploaded on the ITBA portal. In appeal the addition of Rs. 30,00,000/- was upheld only on the ground that there was no justification in holding so high amount in imprest. 3. The case of the assessee before us is that questioning of holding high amount in imprest is beyond jurisdiction of the first appellate authority, rather it is the assessee to decide in view of business expediencies how much imprest the assessee should maintain. It also comes from record, particularly audited financials that the imprest was appearing and the details of such account was also submitted before the authorities below. Furthermore, the financials having been audited and submitted to the income-tax authorities much before demonetization; the question of manipulation as raised by the authorities below is, therefore, to be ruled out. 4. Upon perusal of the order I find that the authorities below have not been able to bring any proof that the imprest available with the assessee has been used 3 ITA no. 4111/Del/2024 elsewhere and the same is not available with the assessee. Having regard to this particular aspect of the matter, when the imprest is appearing in the books of account, the addition by invoking section 69A and 100BBE is held as bad in law and is therefore deleted. 5. The issue in regard to addition of unsecured loan of Rs. 8,27,000/- is also under challenge before us in respect of which the accounts of loan creditors and confirmation from the loan creditors were duly explained before the authorities below. Neither any inquiry was further made by the AO in issuing notice to the loan creditors to get any further requisite document directly. It further appears that here was sufficient balance with the loan creditors which has not been doubted nor mentioned in the remand report as directed to be submitted by the learned CIT(A) on the basis of the evidence adduced by the assessee before him. Upon perusal of the statement of the loan creditors when large amount was appearing in the opening balance out of which the payments were made to the assessee and the loan creditors confirmed the loan and produced the bank statement and income tax return upon summons being issued by them in the remand proceedings, the addition is not sustainable as the case made out by the assessee is found to be acceptable. It is further relevant to mention that the loan creditor has a running account and the outstanding loan of the party as on 31.3.2016 was Rs. 31,12,500/-. The assessee what-ever amount received repaid the same as appears from the 4 ITA no. 4111/Del/2024 documents placed before us. Thus, having regard to the entire aspect of the matter when the creditors have been able to prove their identity, creditworthiness and genuineness of such transactions and particularly when the loan was appearing in the books of account of the assessee the addition made u/s 68 and 100 BBE of the Act is found to be not sustainable and is deleted. 6. In the result, assessee’s instant appeal is allowed. Order pronounced in open court on 21.03.2025. Sd/- (Ms. MADHUMITA ROY) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI 1. Date of dictation of Tribunal Order 19.03.25 2. Date on which the typed draft Tribunal Order is placed before the Dictating Member 20.03.25 3. Date on which the typed draft Tribunal Order is placed before the Other Member 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6.. Date on which the signed order comes back to the Sr. P.S./P.S. 7. Date on which the final Tribunal Order is uploaded by the Sr.P.S./P.S. on official website. 8. Date on which the file goes to the Bench Clerk alongwith TribunalOrder 9. Date of killing off the disposed off files on the judisis portal of ITAT by the Bench Clerks 10. Dateon whichthe file goes to the Supervisor(Judicial) 11. The date on which the file goes to the Assistant Registrar for endorsement of the order.. 12. Date of Dispatch of the order 5 ITA no. 4111/Del/2024 "