SUJATA SINGH,BALLIA V. INCOME TAX OFFICER, WARD - 2(5), BALLIA

ITA 52/VNS/2024

AI Insights

The case involves Sujata Singh, an individual from a remote village in Uttar Pradesh, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, concerning the quantum of assessment under section 147 of the Income Tax Act for the Assessment Year 2012-13. The primary contention was regarding the addition of Rs.18,90,000 to her income, which was attributed to unexplained cash deposits in her bank account. The assessee claimed that these deposits were gifts from her father, brother-in-law, and husband, along with her accumulated savings. The Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) (CIT(A)) had rejected her explanations, leading to the appeal before the Tribunal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473608 (ITAT-VARANASI)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-09-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 10-04-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITA MEENA
• Assessee Lawyers: ASHISH BANSAL
• Keywords: Gift; Bogus
• Section: 147; 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, VARANASI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No. 52/VNS/2024 (Assessment Year :2012-13) Sujata Singh w/o. Anil Kumar Singh 70, Takarsan, Ballia – 277001, Uttar Pradesh Vs. Income Tax Officer, Ward 2(5), Ballia Uttar Pradesh – 277001. PAN/GIR No. CNBPS2044A (Appellant) .. (Respondent) Assessee by Shri. Ashish Bansal, Adv. and Shri. Rashmi Gabhawala, CA Revenue by Smt. Kavita Meena, Sr. DR Date of Hearing 11/09/2024 Date of Pronouncement 02/12/2024 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 26/02/2024 passed by NFAC Delhi for the quantum of the assessment passed u/s. 147 for the Assessment Year 2012-13. 2. In various grounds of appeal assessee has challenged the addition on account of cash deposits of Rs.18,90,000/-. The source of cash deposits had been stated to be gifts from relative for Rs.14,50,000/- and accumulated past savings during the year of Rs.7,87,210/-. ITA No.52/VNS/2024 Sujata Singh 2 3. The brief facts are that assessee is an individual residing in a remote village of Karambar, Parghana Kharid, Tehsil Basdih, Dist. Ballia, UP. It has been stated before us that assessee is engaged in trading of some seasonal goods and hence her income was much below the taxable income therefore, she did not file any return of income u/s. 139. The ld. AO noted that assessee had deposited cash in her bank account; accordingly, notice u/s.148 was issued on 22/03/2019. In response to the notice issued by the ld. AO u/s. 142(1) and notice u/s.144, income tax return was filed at Rs.1,88,960/- on 19/11/2019 which was stated to be in response to notice u/s.148. In the return assessee computed income u/s. 44AD(2) on turnover of Rs.22,86,500/-. Out of the cash deposits of Rs.18,90,000/- it was stated that assessee has made investment of FD of Rs.10,00,000/- on 08/02/2012 and Rs.5,00,000/- was invested in Muthoot Finance Ltd. However, the ld. AO rejected assessee’s explanation for source of deposits and added Rs.18,90,000/-. The ld. CIT (A) too has confirmed the said addition. 4. Before us ld. Counsel stated before the ld. AO and ld. CIT (A) that assessee had submitted that cash deposits were explained by way of gifts from her father, from her brother-in-law and her husband and accumulated savings. The details of which are as under:- S.No. NAME RELATIONSHIP AMOUNT OF GIFT (in Rs.) 1. Vijay Dutt Singh Father 7,50,000 ITA No.52/VNS/2024 Sujata Singh 3 2. Rakesh Singh Brother in law 5,00,000 3. Anil Singh Husband 2,00,000 TOTAL: 14,50,000 5. It was stated that her father, Shri Vijay Dutt Singh was a retired Government employee from UP State Government Roadways who has been in the service for 40 years and was doing farming on farm land of more than 11 acres. He has gifted this amount to his daughter out of agricultural income. Further, the brother-in-law and husband have given Rs.5,00,000/- and Rs.2,00,000/- respectively after withdrawing cash from bank accounts. The chart depicting the cash deposited by the assessee was shown in the following manner:- S.No. PARTICULARS AMOUNT (in Rs.) 1. Opening Cash Balance from business 24,620 2. Gift Received from Relatives: 7,50,000 5,00,000 2,00,000 (a) Vijay Dutt Singh (Father) (b) Rakesh Singh (Brother in law) (c) Anil Singh (Husband) 3. Income from Business 1,86,590 4. Accumulated Savings 5,76,000 TOTAL (A): 22,37,210 5. Less: Drawings 2,35,890 ITA No.52/VNS/2024 Sujata Singh 4 6. Less: Cash deposited in Bank 18,90,000 Closing Cash Balance (A - 5 - 6) 1,11,320 6. Before the ld. CIT (A) apart from the aforesaid explanation it was also stated that since assessee was going through various health issues and financial crisis, therefore, her father has given a gift of Rs.7,50,000/- and also filed his affidavit dated 31/08/2016 wherein he has confirmed that he has gifted his daughter out of his own savings and earnings. Apart from that, assessee had also filed bank statements of brother-in-law and her husband and details credits inn their bank accounts and that there was a clear cut cash withdrawal from their bank account, before giving cash to the assessee. The relevant observation of the ld. CIT (A) noting down assessee’s contention reads as under:- “In appeal, the assessee has claimed that the cash deposits were explained by gifts from her father Rs.7.50,000/ her brother in law Rs.5,00,000/-, her husband Rs.2,00,000/-, accumulated savings Rs.5,76,000/- and income from business Rs. 1,86,590/- Assessee has also claimed that her bank account was opened by her for the first time during the assessment year under consideration being female but opened bank account during the year due to ongoing health issues and \"financial crisis that she might have to face in future\" The assessee has also submitted that gifts were in cash. The assessee has enclosed a copy of affidavit by appellant's father dated 31.08.2016 wherein he has stated that he had gifted his daughter, Sujata Singh the assessee Rs.7,50,000/- in cash from the agricultural income generated from his land and his past savings during the FY 2011-12. Assessee has also submitted copies of bank accounts of her brother in law Rakesh Singh and her husband Anil Singh wherein cash withdrawal Rs.2,00,000/- dated 26.09.2011, Rs.1.10,000/- dated 15.12.2011 and ITA No.52/VNS/2024 Sujata Singh 5 Rs.2.50,000/- dated 15.12.2011 by Rakesh Singh from his bank account and withdrawals from the bank account of Anil Kumar Singh on various dates have been shown.” 7. However, ld. CIT (A) has confirmed the addition. 8. After considering the submissions made by the parties and also in view of the facts and material brought on record, it is seen that her brother-in-law and husband had given declaration of gift and also bank statements wherein there was a clear cut withdrawal before giving the cash to the assessee which has been deposited in the bank account. In so far as gift received from father is concerned, the same is also duly supported by his affidavit wherein he has given the reasons and his source of income for giving the gift. Thus, in so far as source of deposit received from three persons amounting to Rs.14,50,000/-, the same cannot be treated as bogus because assessee has no other source of income. As regards to source of further deposit is concerned, the same can be stated out of her accumulated saving. Since assessee had stated to have accumulated savings of Rs.5,26,000/- and Rs.1,86,590 from income from business declared in the return, therefore, sum of Rs.4,40,000/- is treated as explained. 9. In the result, appeal of the assessee is allowed. Order pronounced on 02/12/2024. Sd/- (AMIT SHUKLA) JUDICIAL MEMBER Varanasi; Dated 02/12/2024 KARUNA, sr.ps ITA No.52/VNS/2024 Sujata Singh 6 Copy of the Order forwarded to : BY ORDER, (Asstt.Registrar) ITAT, Varanasi 1. The Appellant 2. The Respondent. 3. The CIT(A), Varanasi. 4. CIT 5. DR, ITAT, Varanasi 6. Guard file. //True Copy// "