VINOD KUMAR TIWARI,NOIDA V. .ACIT,CIRCLE-5(2)(2),GB NAGAR,NOIDA, NOIDA

ITA 3900/DEL/2023

AI Insights

The case involves Shri Vinod Kumar Tiwari, who appealed against the order of the National Faceless Appeal Centre (NFAC), which upheld the Assessing Officer's decision treating Rs 36,43,500 deposited during the demonetization period as unexplained money under section 69A read with section 115BBE of the Income-tax Act, 1961. The Tribunal examined the assessee's financial records, including income declarations, bank withdrawals, and household expenses, to determine the legitimacy of the cash deposits. The Tribunal found that a portion of the cash could be accounted for through legitimate withdrawals and reasonable household expenses, thus reducing the amount considered as unexplained.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470162 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMIT KATOCH
• Assessee Lawyers: RAKESH GUPTA
• Section: 143(3); 64; 69A

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 3900/Del/2023 (Assessment Year: 2017-18) Shri Vinod Kumar Tiwari, C-36, Sector-39, Noida- 201301 Vs. ACIT, Circle-5(2), Noida (Appellant) (Respondent) PAN:ACEPT6151H Assessee by : Dr. Rakesh gupta, Adv Shri Somil Aggarwal, Adv Revenue by: Shri Amit Katoch, Sr. DR Date of Hearing 09/10/2024 Date of pronouncement 18/12/2024 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.3900/Del/2023 for AY 2017-18, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. ITBA/NFAC/S/250/2023-24/1058791143(1) dated 15.12.2023 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 15.12.2019 by the Assessing Officer, ACIT, Circle-5(2)(2), Noida (hereinafter referred to as ‘ld. AO’). 2. 2. The only issue to be decided in this appeal of the assessee is as to whether the learned CITA was justified in confirming the addition made in the sum of Rs 36,43,500/- by treating it as unexplained money under section 69A read with section 115BBE of the Act in respect of cash ITA No. 3900/Del/2023 Shri Vinod Kumar Tiwari Page | 2 deposits made by the assessee during the demonetization period in the facts and circumstances of the instant case . 3. We have heard the rival submissions and perused the materials available on record. The assessee is a senior citizen deriving income from salary of Rs 17,80,800/-, income from house property of Rs 7,09,800/- and income from other sources of Rs 1,30,288/-. Net taxable income declared by the assessee in the return of income was Rs 25,85,890/-. Pursuant to the announcement of demonetization on 8-11-2016 by the Government of India, the assessee made deposit of available cash with him in the sum of Rs 36,43,500/- in the bank accounts in specified banknotes . The assessee explained that the source of deposit of cash was out of cash withdrawals from the bank accounts in earlier period. This was sought to be disbelieved by the Learned AO and accordingly assessment stood completed in the hands of the assessee under section 143(3) of the Act dated 15-12-2019 wherein the cash deposits of Rs 36,43,500/- was treated as unexplained money under section 69A read with section 115BBE of the Act. This action of the Learned AO was upheld by the Learned CITA. 4. It is not in dispute that a sum of Rs 36,43,500 stood deposited in the bank accounts of the assessee maintained with National Urban Cooperative Bank and Axis Bank on the following dates:- Date Bank Details Amount (Rs.) 16/11/201 Axis Bank A/c 361010100001366 Total 16,28,500 16/11/2016 Axis Bank A/c 361010100225557 40,000 16/11/2016 National Urban Coop Bank A/c 021100250901 19,75,000 Total 36,43,500 ITA No. 3900/Del/2023 Shri Vinod Kumar Tiwari Page | 3 5. It is not in dispute that the assessee had made following cash withdrawals from his bank accounts :- 28-9-2011 50,000 21-10-2011 1,75,000 8-12-2014 4,50,000 9-12-2014 4,40,000 16-12-2014 3,00,000 24-12-2014 1,00,000 14-1-2015 5,00,000 15-1-2015 5,00,000 16-1-2015 4,00,000 17-3-2016 2,25,000 TOTAL 31,40,000 Apart from the above withdrawals, the assessee submitted that he was in possession of cash balance of Rs 9,25,855/- as on 28-9-2011. The assessee submitted that he is aged 64 years and is a heart patient and already been operated for heart attack and accordingly had to keep cash in hand for meeting medical exigencies. The assessee also enclosed the medical records in support of this contention before the Learned NFAC, which was not disputed. Further the opening cash balance of Rs 9,25,855/- stated by the assessee as on 28-9-2011 was also not disputed by the Learned AO. The only point of contention of the revenue is that it is very unlikely that a person would hold huge cash in hand for years together and would use the same as a source for making cash deposits during the demonetization period. There is absolutely no doubt regarding the creditworthiness of the assessee to hold this much of cash given his income declared for various years which are as under:- Asst Year Total Income declared Tax Paid 2017-18 25,85,890 6,13,644 2016-17 24,09,053 5,03,461 2015-16 19,82,345 4,62,504 ITA No. 3900/Del/2023 Shri Vinod Kumar Tiwari Page | 4 6. We find that though the assessee had made huge cash withdrawals from the bank despite having cash balance of Rs 9,25,855/- as on 28-09-2011, there were no amounts that were allocated towards household expenses by the assessee. Given the stature of income earned by the assessee, it is evident that assessee belongs to upper middle-class family and accordingly a reasonable estimate of household expenses are to be made which are as under:- Asst Year 2012-13 - Rs 3,00,000 Asst Year 2013-14 - Rs 3,00,000 Asst Year 2014-15 - Rs 3,60,000 Asst Year 2015-16 - Rs 3,60,000 Asst Year 2016-17 - Rs 4,20,000 Asst Year 2017-18 - Rs 4,20,000 TOTAL Rs 21,60,000 7. Further it is not the case of the revenue that assessee had indeed already spent the amounts withdrawn earlier from the bank accounts and that the said balance was not available with the assessee. The onus is on the revenue to prove that the cash balances earlier withdrawn from the bank account had already been deployed by the assessee for some purposes and the same is not available to explain the source of cash deposits made at a future date. This is conspicuously absent in the orders of both the lower authorities in the instant case. It is to be borne in mind that assessee is not required to maintain any books of accounts as he is not engaged in carrying on any business or profession though this fact has been erroneously stated by the Learned NFAC. Hence the only way to work out the availability of cash balance with the assessee is to proceed from the withdrawals made from the bank account which is worked out herein below. Hence the Learned AO is directed to consider ITA No. 3900/Del/2023 Shri Vinod Kumar Tiwari Page | 5 making the addition under section 69A read with section 115BBE of the Act in the following manner:- Cash balance as on 28-9-2011(not disputed)- 9,25,855 Add: Cash withdrawals from Banks - 31,40,000 ----------------- 40,65,855 Less: Household expenses for various years 21,60,000 ----------------- Cash source available with the assessee 20,05,855 Less: Cash deposits in demonetization period 36,43,500 ----------------- Deficit to be treated as unexplained money 16,37,645 ----------------- 8. The aforesaid workings in our considered opinion for working out the deficit figure of cash available would meet the ends of justice for both the parties. Accordingly, the grounds raised by the assessee are partly allowed. 9. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 18/12/2024. -Sd/- -Sd/- (VIMAL KUMAR) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:18/12/2024 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "