NISHA PRAKASH TEJAWAT,BHIWANDI V. WARD 1(3) KALYAN, KALYAN

ITA 1245/MUM/2024

AI Insights

The case revolves around an appeal by Nisha Prakash Tejawat against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, which confirmed the addition of Rs. 14.41 lakhs as unexplained income related to bank deposits during the demonetization period. The Assessing Officer had initially added this amount as unexplained, considering only the income earned from April 1, 2016, to November 8, 2016, and not accepting the explanations and cash flow statements provided by the assessee for the years 2015-16 and 2016-17. The Tribunal, after reviewing the cash books and the income declared by the assessee, concluded that the sources of the deposits were adequately explained and thus allowed the appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 24145 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 18-03-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH CHANDRA SINHA
• Assessee Lawyers: SANJIV BRAHME
• Keywords: Set aside
• Section: 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “SMC” BENCH : MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER ITA No.1245/Mum/2024 Assessment Year : 2017-18 Nisha Prakash Tejawat, H.No. 401, F.No. 602, 6th Floor, Mahavir Palace, Khadak Road, Bhagwan Mahavir Marg, Bhiwandi, Maharashtra. PAN : ACSPJ9257A vs. Income Tax Officer, Ward–1(3), 2ndFloor, Rani Mansion, Kalyan-Murbad Road above Canara Bank, Syndicate, Kalyan (Appellant) (Respondent) Assessee by : Shri Sanjiv Brahme Revenue by : Shri Umesh Chandra Sinha Date of Hearing : 13/11/2024 Date of Pronouncement : 21/11/2024 PER B.R. BASKARAN, A.M : The assessee has filed this appeal challenging the order dt.22-01-2024 passed by the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟] and it relates to AY. 2017-18. The assessee is aggrieved by the decision of the Ld.CIT(A) in confirming the additionof Rs.14.41 lakhs relating to bank deposits as un-explained income of the assessee u/s. 69A of the Income Tax Act, 1961 („the Act‟). 2. The assessee is an individual and she derives rental income and interest income. It was noticed that the assessee has deposited cash of Rs.17,40,000/- in specified bank notes during the demonetization period. When questioned about the same, the assessee submitted that 2 ITA No. 1245/Mum/2024 the deposits were made out of her savings made over the years. The assessee also furnished cash flow statements for the year relating to the AYs. 2015-16 and 2016-17 to substantiate the availability of cash. The AO did not accept the explanations given by the assessee. He considered only the income earned by the assessee from 01-04-2016 to 08-11-2016 as sources for making the impugned deposit. Accordingly, the AO gave credit of Rs. 2,98,250/- only and added the balance amount of deposit of Rs. 14,41,750/- as un-explained money u/s.69A of the Act. The Ld.CIT(A) also confirmed the same. 3. We heard the parties and perused the record. The Ld.AR submitted that the assessee has maintained cash books and the impugned deposits have been made out of cash balance available in the books with the assessee. The Ld.AR submitted that the cash book relating to the AYs. 2015-16 and 2016-17were produced before the AO. He submitted that the assessee has also furnished condensed cash flow statement of FY. 2014-15 and 2015-16 and 01-04-2016 to 08-11-2016 before the AO. Inviting to the cash flow statements placed at pg. No. 41 of Paper Book,the Ld.AR submitted that the assessee has drawn a sum of Rs. 13,30,000/- for renovation of her property during the FY. 2015- 16 and accordingly submitted that the assessee would not have shown such a huge amount as drawings, had she intended to cook up sources for the deposits made during demonetization period. The Ld.AR further submitted that the assessee has been regularly withdrawing cash from banks in the earlier years also and the cash balance was kept in hand in order to meet emergency requirements. The Ld.AR also submitted that the assessee has been maintaining cash book in the past years also. Accordingly he submitted that there is no reason to suspect the cash flow statements and other explanations given by the assessee. Accordingly, he prayed that the impugned addition be deleted. 3 ITA No. 1245/Mum/2024 4. The Ld.DR, on the contrary, supported the orders passed by the tax authorities. 5. We heard the parties and perused the record.We are of the view that there is merit in the submissions made by the assessee. We notice that the assessee has been maintaining cash books and the impugned cash deposits have been made out cash balance available with the assessee. We also notice that the assessee has been earning income by way of rent and interest. For the year under consideration, the assessee has declared total income of Rs. 11.34 lakhs. When considering the quantum of income declared by the assessee, in our view the availability of cash balance of Rs.14.00 lakhs with the assessee should not have been suspected. Hence, on a consideration of quantum of income available with the assessee and also considering the fact that the assessee has been regularly maintaining cash book, we are of the view that there is no reason to suspect the availability of cash with the assessee. Accordingly, we are of the view that the impugned deposits have been made out of the cash balance available with the assessee, meaning thereby,the sources of making deposits would stand explained. Accordingly, we set aside the order of the Ld.CIT(A) and direct the AO to delete the addition. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 21-11-2024 Sd/- Sd/- [RAJ KUMAR CHAUHAN] [B.R. BASKARAN] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 21-11-2024 TNMM 4 ITA No. 1245/Mum/2024 Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, “SMC” Bench, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai "