SHILPA GUPTA,NEW DELHI V. ITO WARD 70(4), NEW DELHI

ITA 1905/DEL/2024

AI Insights

The case revolves around an appeal by Shilpa Gupta against the order of the Commissioner of Income Tax (Appeals) which confirmed an addition of Rs. 14,01,500 to her income for the Assessment Year 2017-18. This addition was initially made by the Assessing Officer under Section 69A of the Income Tax Act, citing that the source of the cash deposits made during the demonetization period was unexplained. The assessee argued that these funds were withdrawals from her father-in-law's account intended for wedding expenses, which remained unutilized and were thus deposited back. The Tribunal, after considering the facts and the arguments presented, concluded that the assessee had sufficiently explained the source of the deposits and allowed her appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473205 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: S MANUJ SABHARWAL
• Keywords: Gift
• Section: 143(3); 142(1); 56; 69A; 80C

Judgement Text

" ITA No. 1905/Del/2024 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.1905/Del/2024 Assessment Year: 2017-18 Shilpa Gupta, 143, Kohat Enclave, Pitampura, Delhi – 1100 34 PAN No.AJHPJ3594J Vs. Income-tax Officer, Ward 70(4), Delhi (APPELLANT) (RESPONDENT) Appellant by S/Shri Manuj Sabharwal, Drona Negi & Devrat Tiwari, Advocates Respondent by Shri Sahil Kumar Bansal, Sr. DR Date of hearing: 11/02/2025 Date of Pronouncement: 19/02/2025 ORDER PER ANUBHAV SHARMA: JUDICIAL MEMBER: This appeal is directed by the assessee against the order dated 29.02.2024 passed by the Commissioner of Income Tax(Appeals)/National Faceless Assessment Centre (NFAC), Delhi [hereinafter referred to as “CIT(Appeals)” pertaining to assessment ITA No. 1905/Del/2024 2 year 2017-18 and arises out of the assessment order dated 16.12.2019 passed under section 143(3) of the Income Tax Act 1961 [hereinafter referred as ‘the Act’]. 2. The assessee is in appeal challenging the confirmation of Rs.14,01,500 made by the Assessing Officer under Section 69A of the Act and application of tax rate as per section 115EE of the Act. An additional ground by way of an application under Rule 11 of the Income Tax Appellate Tribunal (Rules), 1963 was made challenging levy of sur-charge @ 25% which according to the assessee is applicable w.e.f. 01.04.2017 pursuant to the passing of Taxation Laws (2nd Amendment) Act,2016. 3. Heard and perused the record. Ld. AR has reasserted the facts and case of assessee as set up before the ld. Tax authorities below and ld. DR has relied the impugned orders. On hearing both the sides it comes up that the assessee is an individual and is working as an executive in a Chartered Accountant Firm. The assessee had filed the return of income in ITR-1 for the AY 2017-18 on 05/08/2017 declaring the Gross Total Income of Rs. 3,37,615/- and Taxable Income of Rs. 2,75,660/-. The Gross Total income comprise of salary (Rs. 2,40,000/-) and interest & other income (Rs.97.615/-). ITA No. 1905/Del/2024 3 The assessee has claimed deduction u/s 80C amounting to Rs. 55.451/- and u/s 80TTA amounting to Rs. 6,504/- The assessee has claimed to have received Rs 95, 000/- as gifts from various relatives defined under explanation [e] of Section 56 of the Act during various festivals in FY 2016-17. A sum of Rs.40,000/- was received as gift during her brother-in-law's marriage from relatives defined under explanation [e] of Section 56 of the Act and has claimed to have earned Rs.88.500/- as tuition fees during FY 2016- 17. The assessee has claimed to have withdrew from her bank account Rs 20,00,000/- (20/02/2016) & Rs. 10,00,000/- (09/02/2016) on account of marriage of her brother-in-law, which was solemnized on 12/02/2016. The funds she withdrew from her bank were transferred from the bank account of her father-in-law, (Mr. K.K. Gupta, a renowned Chartered Accountant, from his own funds). This amount was drawn to meet any contingencies that may have come on the eve of the wedding in the family. Since the drawn cash was left unutilized, hence Rs. 12,50,000/- was subsequently deposited in AY 16-17 on 28/03/2016 (Rs.7,50,000) & 31/03/2016 (Rs.500,000/-). Further Rs 8.82,000/- were deposited in bank on various dates before the Demonetization date. i.e., 08/11/2016 and ITA No. 1905/Del/2024 4 after 8/11/2016, the assessee further deposited demonetized currency notes amounting to Rs. 14,00,000/-(Rs.7,00,000/- in Allahabad Bank on 15-11-2016, Rs. 1,500/- on 12-11-2016 & Rs.7,00,000/- on 28-11-2016 in HDFC Bank). Subsequently, assessee's return for AY 2017-18 was chosen for assessment and a notice u/s 142(1) was issued by the assessing officer and the assessee filed her response with the assessing officer, stating that the amount deposited is from the withdrawal from her own bank account in earlier period. The assessing officer added the amount so deposited after demonetization to the total income of the assessee and computing tax liability u/s 115BBE and also initiating penalty proceedings u/s 271AAC. The learned CIT (Appeals) sustained the addition with the following observations: “7.2 Ground No's 2(i) to 2(iii) relate to addition of Rs.14,01,500/- u/s.69A of the Act. I have considered the submissions of the appellant. On perusal of the same, it is observed that the appellant has received and withdrawn the amount of Rs.30,00,000/- (Rs.20,00,000/- on 20.01.2016 and Rs. 10,00,000/- on 09.02.2016) through cheque from her father-in- law to meet the expenses of wedding in her family as claimed by the appellant. The appellant has further submitted that the balance amount of Rs.14,01,500/- out of Rs 30,00,000/- is the unutilized money which was deposited during the demonetization period. The justification given by the appellant cannot be accepted as it is evident from the entries in the bank account that the amount of Rs.30,00,000/- was received by the ITA No. 1905/Del/2024 5 appellant in the months of January and February 2016 and the cash deposits have been made during the demonetization period after a gap of almost eight months. There is no plausible reason given for keeping substantial cash at home ignoring the banking facilities available to the appellant. Also, it is seen from the bank statement that the appellant's debit and credit entries are higher in comparison to the income declared by her for A.Y.2017-18. From the above facts, it is clear that the appellant has tried to explain her withdrawals as justification of cash deposits during the demonetization period. It is very clearly established from the above facts that the appellant has failed to provide any documentary evidence or explanation to prove the source of the cash deposited during the demonetization period. Thus, the amount of Rs.14,01,500/- remained unexplained money u/s.69A of the Act. Just because the appellant-assessee is not required to maintain books of account does not mean that she can deposit any amount of money in her bank accounts without getting taxed either u/s.69 or 69A”. 5. The assessee is in appeal raising following grounds; 6. We have taken into consideration the facts and circumstances of the case. The source of assessee’s deposits has been explained from the money as received from disclosed sources of father-in-law. Merely for keeping the cash in hand for a period of 8 months after withdrawal from bank account on a well explained reason of the withdrawal earlier made for any contingencies at the time of marriage of a family member is good enough an explanation. However, learned Tax Authorities below on the basis of bald allegations that the explanation is cocked up story discredited the ITA No. 1905/Del/2024 6 explanation. We are of considered view that when the assessee is not maintaining the books of account and the amount from father-in- law are quite explained which were source to her withdrawal. There was no reason to hold that the assessee’s explanation was not well- founded. A prudent approach is needed to examine the facts set up to discharge the onus casted on assessee, specially an individual. We find no merit in the discussion of the learned CIT (Appeals) and the same is not sustainable under law. The grounds raised are sustained and the appeal filed by the assessee is allowed 7. In the result, the appeal is allowed Order pronounced in the open court on 19.02.2025. Sd/- Sd/- (MANISH AGARWAL) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER *Mohan Lal* Dated: 19.02.2025 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(Appeals) ` 5.DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "