SHAWETA SONI, BHILAI,DURG V. INCOME TAX OFFICER, WARD-1(3), BHILAI, DURG

ITA 121/RPR/2024

AI Insights

The case involves Smt. Shaweta Soni, who appealed against the order of the Commissioner of Income-Tax (Appeals), which confirmed the addition of Rs.10.90 lakhs to her income for the assessment year 2017-18. This addition was initially made by the Assessing Officer (A.O.) under section 143(3) of the Income-tax Act, 1961, on the grounds that the cash deposits in her bank account during the demonetization period were unexplained. The Tribunal examined the sources of the cash deposits claimed by the assessee, including her commission income and accumulated savings, and found that a portion of the deposits could be explained by these sources.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35798 (ITAT-RAIPUR)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 01-04-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: R.B DOSHI
• Keywords: Business income; Additional evidence
• Section: 143(3); 143(2); 69A

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No.121/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2017-18 Smt. Shweta Soni JR/MIG/46-A, Vaishali Nagar, Bhilai, Durg (C.G.)-490 023 PAN: ASOPS5438A .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer-1(3), Bhilai (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri R.B Doshi, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 21.10.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 23.10.2024 2 Smt. Shaweta Soni Vs. ITO-1(3), Raipur ITA No. 121/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 02.02.2024, which in turn arises from the order passed by the A.O under Sec.143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 12.12.2019 for the assessment year 2017- 18. The assessee has assailed the impugned order on the following grounds of appeal: “1. Ld. CIT(A) erred in confirming addition of Rs.10,90,000/- made by the A.O on account of cash deposited in the bank account of the appellant, holding it to be unexplained money, invoking section 69A. The addition made by the A.O and confirmed by the Ld. CIT(A) is arbitrary, baseless, without appreciating facts of the case properly and is not justified. 2. Ld. CIT(A) erred in denying to admit additional evidence filed by the appellant. 3. The appellant reserves the right to amend, modify or add any of the ground/s of appeal.” 2. Succinctly stated, the assessee had e-filed her return of income for A.Y.2017-18 on 21.03.2018, declaring an income of Rs.8,40,000/- Subsequently, the case of the assessee was selected for scrutiny assessment u/s. 143(2) of the Act. 3. During the course of the assessment proceedings, the A.O observed that the assessee had during the demonetization period made cash deposits 3 Smt. Shaweta Soni Vs. ITO-1(3), Raipur ITA No. 121/RPR/2024 in Specified Bank Notes (SBNs) of Rs.10.90 lacs i.e over the period 13.11.2016 to 21.1.2016 in her bank account with UCO Bank, Branch: Supela (Bhilai). On being queried, it was the claim of the assessee that the subject cash deposits were sourced from the sufficient cash in hand available with her as on 01.11.2016. As the assessee had failed to explain the nature and source of the aforesaid cash deposits, the A.O. vide his order passed u/s. 143(3) of the Act, dated 12.12.2019, after making an addition u/s. 69A of the Act of Rs.10.90 lacs, determined the income of the assessee at Rs.19,30,000/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without success. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: “5.11 During the course of appellate proceedings the appellant submitted written submission wherein he has contended that some of the cash was from transport commission income, some was from the bank withdrawals and some was from partnership firm M/s Soni Auto Dealer. 5.12 The submissions of the appellant have been examined however the same are not tenable as none of these details were submitted during the course of assessment proceedings and the AO had noted that the appellant does not maintained books of accounts. Hence, there is no credible source of deposit of Rs.10,90,000/- in the bank account during demonetization. 5.13 In view of the above, it is held that the evidences filed by the appellant during the course of appellate proceedings are not reliable and they do not extend any credibility to the deposit of cash in the bank account or the genuineness of the transaction. Further, the AO had made clear observation in the assessment order that the source of the cash deposit could not be verified. Hence, the AO has rightly 4 Smt. Shaweta Soni Vs. ITO-1(3), Raipur ITA No. 121/RPR/2024 held the cash deposited in the bank during demonetization as appellant's own money. 5.14 In view of the discussion in the preceding paragraphs, I am constrained to concur with the AO's findings of fact and decisions thereof, more particularly in the absence of any meaningful and worthwhile submissions/documentations even during the instant appellate proceedings, to counter effectively the position adopted by the AO on the concerned issues and reduced in writing in the assessment order. It is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court [Cr No. 3791 of 2013 (O&M) dated 01.05.2014]. The additions made by the AO are sustained. As a result, all ground of appeal are dismissed. 6. In the result, the appeal filed by the appellant is treated as dismissed.” 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the tribunal. 6. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record. 7. Shri R.B Doshi, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold submitted that the A.O. had grossly erred in treating the cash deposits Rs.10.90 lacs (supra) as the unexplained money of the assessee u/s. 69A of the Act. Elaborating on his contention, the Ld. AR submitted that the subject cash deposits were sourced from, viz. (i). the cash receipts of commission by the assessee from transporting work during the year under consideration; and (ii). the accumulated cash in hand 5 Smt. Shaweta Soni Vs. ITO-1(3), Raipur ITA No. 121/RPR/2024 available with her. The Ld. AR to buttress his aforesaid contention had taken me through the copy of the return of income, computation of income of the assessee for A.Y.2017-18, Page 11 to 14 of APB. The Ld. AR further submitted that the fact that the assessee had substantial amount of cash in hand available with her could safely be gathered from her return of income. The Ld. AR further buttress her claim that the assessee had sufficient accumulated cash savings to source the cash deposits in question, had taken me through the copies of the returns of income of the assessee for immediately preceding and succeeding years, i.e. A.Y. 2016-17 and A.Y.2018-19, respectively, which revealed that returned income of Rs.7,05,980/- and Rs.7,82,150/- for the said respective years. The Ld. AR had further taken me through the “commission income” from transporting work of Rs.8,36,504/- that was disclosed by the assessee in her return of income for the year under consideration, Page 12 of APB. The Ld. AR had further drawn my attention to the confirmations of the transport agencies from whom commission income was received during the subject year, Page 19 to 21 of APB. 8. As nothing is discernible from the record which would reveal that the “commission income” would have been received by the assessee from the aforesaid parties in cash, the Ld. AR was confronted with the said aspect. The Ld. AR to buttress his aforesaid claim had on the next date of hearing placed on record confirmations of the aforementioned parties, viz. (i) M/s 6 Smt. Shaweta Soni Vs. ITO-1(3), Raipur ITA No. 121/RPR/2024 Chhattisgarh Andhra Road Line; (ii). M/s Perfect Enterprises; and (iii). M/s Chacha Transport, wherein the said parties had stated that they had paid commission to the assessee in cash and not through banking channels. The Ld. AR submitted that as the assessee had sufficient cash in hand available with her, which in turn was sourced out from, viz. (i) accumulated savings as of 01.11.2016; and (ii) the commission receipts for the year under consideration, therefore, there was no justification for the A.O to have held any part of the cash deposits in the assessee’s bank account as having been sourced out of her unexplained money u/s. 69A of the Act. 9. Per contra, the Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. 10. I have given thoughtful consideration to the contentions advanced by the Ld. Authorized Representatives of both the parties in the backdrop of the orders of the lower authorities. At the threshold, I may herein observe, that in the absence of any documentary evidence, proving to the hilt, that sufficient cash in hand out of the commission received by the assessee from the aforementioned parties was available with her as on the respective dates on which cash was deposited in her bank account during the demonetization period, the Ld. AR’s claim that the said cash deposits were sourced out of the said source of income of the assessee cannot be summarily accepted. Although the aforementioned parties had stated in their certificates, as had 7 Smt. Shaweta Soni Vs. ITO-1(3), Raipur ITA No. 121/RPR/2024 been placed on our record, that they had during the subject year paid the commission in cash to the assessee and not through banking channels, but then in the absence of any material which would irrefutably evidence the availability of the amount with the assessee on the respective dates of deposits made in her bank account, thus, would not carry her case any further. 11. At the same time, backed by the fact that the assessee had regularly been filing her returns of income, the factum of availability of cash in hand out of accumulated savings with her cannot be ruled out. 12. As observed by me hereinabove, it is the Ld. AR’s claim that the subject cash deposits in the assessee’s bank account were sourced from the sufficient amount of cash in hand available with her, which in turn was sourced from, viz. (i) accumulated savings available with her as of 01.11.2016; and (ii) the commission receipts for the year under consideration. I find on a perusal of the record, that the assessee who is deriving commission income from transport work, had been filing her returns of income, viz. (i). A.Y. 2016-17: Rs. 7,05,980/-; (ii). A.Y 2017-18: Rs. 8,40,000/-; and (iii). A.Y.2018-19: Rs. 7,82,150/-. Although the parties from whom the assessee had received commission (from transport work) during the year under consideration, had certified that they had made the payments to the assessee in cash, but in the absence of any material that 8 Smt. Shaweta Soni Vs. ITO-1(3), Raipur ITA No. 121/RPR/2024 would irrefutably evidence availability with the assessee of the requisite amounts on the respective dates on which cash was deposited in her bank account, thus, would not carry her case any further. 13. At the same time, I cannot remain oblivion of the existing stream of income of the assessee i.e commission income; as well as the accumulated savings that would be available with her. It would be relevant to point out that the CBDT vide its Instruction No.3/2017, dated 21.02.2017, had observed, that in case of assessee’s not having any business income no verification is required if total cash deposit is upto Rs. 2.5 lac. It is further provided that amounts above the aforesaid cut-off may require verification to ascertain whether the same is explained or not. For the sake of clarity, the CBDT Instruction No.03/2017 dated 21.02.2017 is culled out as under (relevant extract): \"1.1 In case of an individual (either than minors) not having any business income, no further verification required to be made if total cash deposit is up to Rs.2.5 lakh. In case of taxpayers above 70 years age, the limit is Rs.5 lakh per person. The source of such amount can be either household savings/ savings from past income or amounts claimed to have been received from any of the sources mentioned in Paras 2 to 6 below. Amounts above this cut-off may require verification to ascertain whether the same is explained or not. The basis for verification can be income earned during past years and its source, filing of ROI and income shown therein, cash withdrawals made from accounts etc.\" 14. Considering the aforesaid CBDT Instruction alongwith the fact that the assessee in the present case is being regularly assessed to tax, I am of 9 Smt. Shaweta Soni Vs. ITO-1(3), Raipur ITA No. 121/RPR/2024 the view that it can safely be held that the assessee had cash in hand of Rs. 4.00 lac [Rs. 2.50 lac (out of accumulated savings) + Rs. 1.50 lacs (out of commission receipts during the year under consideration) available with her to source the cash deposits in her bank account during the demonetization period. Accordingly, I restrict the addition to the extent of Rs.6.90 lacs [Rs.10.90 lacs (-) Rs.4.00 lacs]. Thus, the Ground of appeal No. 1 is partly allowed in terms of the aforesaid observations. 15. As the Ld. AR has not raised any contention as regards the Ground of appeal No. 2, therefore, the same is dismissed as not pressed. 16. The Ground of appeal No. 3 is dismissed as not pressed. 17. In the result, the appeal of the assessee is partly allowed in terms of the aforesaid observations. Order pronounced in open court on 23rd day of October, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 23rd October, 2024. **#SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 10 Smt. Shaweta Soni Vs. ITO-1(3), Raipur ITA No. 121/RPR/2024 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "