INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “SMC-2”: NEW DELHI
(Through Video Conferencing)
BEFORE
SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
AND
MS. MADHUMITA ROY, JUDICIAL MEMBER
ITA No. 9631/Del/2019
Asstt. Year 2011-12
Sayar Devi Baid, Vs. ITO
1/1942A, Ward-56 (3)
Moti Ram Road, New Delhi.
Shahdra,
New Delhi 110 032 (Respondent)
PAN ACRPB2736P
(Appellant)
Assessee by: Shri R.S. Singhvi, CA
Shri Satyajeet Goel, CA
Department by : Shri Ved Prakash Mishra, Sr. DR
Date of Hearing 26.11.2020
Date of 27.11.2020
pronouncement
O R D E R
PER N.K. BILLAIYA, AM
This appeal by the assessee is preferred against the order
of the CIT(A)-37, New Delhi dated 30.10.2019 pertaining to
assessment year 2011-12. The grievance of assessee read as
under :
“1(i) That on facts and circumstances of the case, the Ld. CIT(A) was not
justified in upholding the validity of notice u/s 148 of the act even
though the reasons recorded are vague, unsubstantiated and not
based on any tangible material.
(ii) That that the reasons are merely on the basis of AIR information
and in absence of independent application of mind or
investigation, the reopening u/s 148 is on mechanical basis and
borrowed satisfaction.
(iii) That AIR information p e r s e does not constitute tangible
material and there being no other adverse material on record, the
reopening u/s 147 is illegal and not sustainable for want of
tangible material.
(iv) That in absence of proper approval in terms of provisions of
section 151 of the Act, the notice u/s 148 is illegal and without
jurisdiction.”
2(i) That on the facts and circumstances of the case, CIT(A) is also not
justified in confirming addition of Rs. 10,00,000/- as unexplained
money in terms of provisions of sec. 69A of the Income Tax Act,
1961 without appreciating the nature of the transactions and
supporting evidences.
(ii) That the appellant having engaged in the trading of papad &
snacks, the genuineness of cash deposit is duly supported from
relevant documentary evidences and as such the impugned
addition u/s 69A of the Act is mechanical in nature.
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3(i) That CIT(A) is not justified in not appreciating the documentary
evidences in support of cash deposits and addition was made
without allowing proper & reasonable opportunity.
(ii) That these evidences are vital for adjudication of ground in respect
of addition made u/s 69A.
(iii) That these evidences have direct bearing to the issue in dispute
and the CIT(A) should have appreciated the same in interest of
justice and proper adjudication of ground.
4. That in any case, AO & CIT(A) having accepted the returned
income on the basis of which entire cash deposit is corroborated,
there is no ground or basis for further addition of Rs. 10,00,000/-
which is already part of declared turnover.”
2. The representatives of both the sides were heard at length.
Case records carefully perused. At the very outset the Counsel for
the assessee stated that he has not pressed ground No. 1 with all
its sub grounds and accordingly ground No. 1 with its sub ground
is dismissed as not pressed.
3. The other grounds relate to the addition of Rs. 10 lacs made
u/s 69A of the Act.
4. Briefly stated the facts of the case that as per the information
available with the AO he came to know that the assessee has
deposited cash of Rs. 10 lacs in her saving bank account
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maintained with Vijaya Bank, Loni Road, Delhi. In response to
the notice u/s 148 of the Act the assessee electronically filed
return declaring total income of Rs. 1,32,390/-. In her return the
assessee showed gross turn over of Rs. 16,54,863/-.
5. During the course of the scrutiny assessment proceedings,
the assessee was asked to explain the source of cash deposit of
Rs.1o lacs. In her reply the assessee stated that she has been
doing the business of procuring papad and snacks from the
manufacturer and selling the same in retail trading. It was
explained that the source of cash deposit of Rs. 10 lacs is her
trading business in papad and snacks.
6. The explanation of the assessee did not find any favour with
the AO who was of the firm belief that the assessee has failed to
discharge the onus of explaining the source of cash deposit and
accordingly made addition of Rs. 10 lacs.
7. Assessee agitated the matter before the CIT(A) but without
any success.
8. Before us the Counsel for the assessee vehemently stated
that the AO has accepted the return of the assessee thereby
accepting the turn over from the sales of papad and snacks. It is
the say that counsel for the assessee has been doing this
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business since past many years and therefore had sufficient
funds to explain the source of cash deposit. Per contra the DR
strongly supported the findings of the lower authorities. After
giving a thoughtful consideration to the orders of the authorities
below we are of the considered view that once the business of the
assessee has been accepted by the AO by accepting her return of
income there should not be any doubt in accepting the source of
cash deposit. On identical set of facts the coordinate bench in ITA
No. 8197/D/2019 order dated 22.10.2020 held as under :-
“7. We have heard the rival submissions and also perused the
relevant finding given in the impugned order and the material
referred to before us at the time of hearing. It is an undisputed fact
that the assessee had not filed the return of income for
Assessment Year 2010-11 and the only return which was filed,
was in response to notice u/s.148 on 27.08.2018. In the said return
of income, the assessee had declared income of Rs.1,79,200/-
which was shown as business income u/s.44AD based on the total
cash deposits appearing in her bank account. Since issue of
validity of notice u/s.148 and u/s.147 has not been argued by the
ld. counsel, therefore, the same are treated to be not pressed.
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8. The assessee’s plea all throughout has been that she has been
carrying out petty business activities like purchase and sale of
artificial jewellery, bed-sheets and other items from various places
and also giving coaching to the students. The aggregate cash
deposits in her account for the entire year was Rs. 13,61,300/-
though no cogent material or evidence has been filed in support of
business activities. However, from a bare perusal of the bank
statement which was basis for the addition, it is seen that
assessee has received cash from various vendors/ purchasers
outside the Delhi and the narration given in the account mentions
‘by cash- Jhansi- Shipri Bazar’, ‘by cash cashupl-Solapur’, ‘by cash
cashupl- Jodhpur’, ‘by cash Ajmer’, and likewise wherein cash
amount has been deposited in her bank account on various dates.
However, one very glaring feature from the perusal of the bank
account is that the assessee has been paying VAT and such
entries are appearing all throughout the year on various dates.
Payment of VAT does indicate purchase and sale of some goods,
items or services. All these factors thus, go to show that some kind
of business activity was carried out by the assessee. If the
assessee had shown income u/s.44AD which is presumptive basis
for taxation and looking to the nature of bank account entries and
regular cash deposits and withdrawals this shows that assessee
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was doing some kind of business activities and preponderance of
probabilities for such activities is definitely goes in favour of the
assessee. Moreover, the Assessing Officer has tacitly accepted
the business income by accepting the return of income from the
same deposits of sums aggregating to Rs.13,61,300/-.
Accordingly, we direct the Assessing Officer to accept the return of
income of Rs.1,79,200/- as business income.”
9. Finding parity in the facts of the case in hand with the facts
of the decision of the Tribunal (supra) we hold that the assessee
has successfully explained the source of cash deposit of Rs. 10
lacs. We accordingly direct the AO to delete the impugned
addition. The appeal filed by the assesee is allowed.
10. In the result the appeal filed by the assessee is allowed.
Order pronounced in the open court on 27th November,
2020.
sd/- sd/-
(MS. MADHUMITA ROY) (N.K.BILLAIYA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 27/11/2020
Veena
Copy forwarded to
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1. Applicant
2. Respondent
3. CIT
4. CIT (A)
5. DR:ITAT
ASSISTANT REGISTRAR
ITAT, New Delhi
Order dictated on 27.11.2020.
Date on which the typed draft is placed before the Dictating Member 27.11.2020..
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