Dinesh Chand Jindal, New Delhi vs Department Of Income Tax

Appellant by Smt. Parwinder Kaur, Sr. DR Respondent by Sh. Satish Khosla, M. Malik, Adv.

Date of Hearing:-29.01.2015 Date of Pronouncement:-04.03.2015

ORDER PER DIVA SINGH, JM

This is an appeal filed by the Revenue against the order dated 06.02.2013 of CIT(A)-XXVI, New Delhi pertaining to 2008-09 assessment year on the following ground:-

1. "The CIT(A) has erred in deleting the addition of Rs.10,78,000/- made by the AO on account of unexplained cash deposit in bank account despite the fact that the assessee could not explain any specific reason for making withdrawals from bank and re-depositing the same to the bank account after a long gap of time."

2. The relevant facts of the case are that the assessee in the year under consideration returned an income of Rs.2,81,862/- from rental income; short term capital gain u/s 111A; short term capital gain and income from other sources.

Based on the AIR information which showed that in the Saving Bank Account No.-530010014041 in ING Vysya Bank, Karol Bagh, New Delhi, the assessee in the financial year had made cash deposit of Rs.10,78,000/-. The AO required the 2 I.T.A .No.-2928/Del/2013

assessee to explain the same. In response thereto, the assessee explained that the cash deposits were from cash withdrawals made from this very specific bank and re-deposited. However the AO did not accept the said explanation. Considering the following details the AO was of the view that there was considerable gap in the date of cash deposits and withdrawals:-

Date Cash deposits Date Cash withdrawals 13/04/2007 18000 09/06/2007 150000 10/05/2007 100000 11/07/2007 100000 12/05/2007 100000 11/07/2007 75000 16/05/2007 80000 13/07/2007 50000 15/06/2007 150000 16/07/2007 120000 25/06/2007 20000 02/08/2007 15000 26/06/2007 20000 03/08/2007 80000 13/08/2007 50000 11/08/2007 100000 24/10/2007 50000 12/09/2007 60000 25/10/2007 50000 23/10/2007 50000 28/01/2008 200000 13/03/2008 100000 20/03/2008 100000 Total 900000 25/03/2008 100000 26/03/2008 40000 Total 1078000

3. In appeal before the First Appellate Authority considering the explanation offered the CIT(A) concluded that the assessee had sufficient cash available with him prior to the cash deposit and the addition made was deleted on facts.

4. Aggrieved by this the Revenue is in appeal before the Tribunal. The Ld. Sr. DR inviting attention to the assessment order and the impugned order submitted that the CIT(A) has given a finding that the cash deposited is out of cash available as per cash book and in the case of the assessee who is an individual the occasion to maintain a cash book does not arise. Referring to the grounds raised it was his submission that the reasons for maintaining cash at home on different dates has not been explained by the assessee.

5. The Ld. AR inviting attention to para 5 of the impugned order submitted that the CIT(A) had come to the conclusion based on the explanation offered by the assessee which has been extracted in the order. Addressing the same it was his 3 I.T.A .No.-2928/Del/2013

submission that the assessee has submitted before the CIT(A) that the assessee and his wife were senior citizens at the relevant point of time and had been living alone. Apart from that the assessee was suffering from acute prostate problem and needed medical attention from time to time on account of which reason the assessee would keep a certain amount of cash at home to tide over the emergency which may arise due to his medical condition. Further as and when it was considered that the medical condition did not require maintaining cash at home in the interest of safety it was deposited in the same bank. It was further submitted that what the CIT(A has referred to as cash book is actually a cash flow statement wherein the assessee had shown availability of withdrawals of about Rs.3 lacs from the withdrawals made earlier.

6. We have heard the rival submissions and perused the material available on record. A perusal of the impugned order shows that the CIT(A) culled the facts in the following manner:-

Sl.No. Date & Amount of Cash Date & Amount of Cash available as per cash Deposit book/cash withdrawal from bank.

1. 13.4.2007 Rs.18,000/- Cash deposited out of cash available as per cash book

2. 10.5.2007 Rs.1,00,000/- ------------do-------------

3. 12.5.2007 Rs.1,00,000/- ------------do-------------

4. 16.5.2007 Rs.80,000/- ------------do-------------

5. 15.6.2007 Rs.1,50,000/- 9.6.2007--Rs.1,50,000/- withdrawn from bank account.

6. 25.6.2007 Rs.20,000/- Cash deposited out of cash available as per cash book

7. 25.6.2007 Rs.20,000/- ------------do-------------

11.7.2007--Rs.1,00,000/- withdrawn from bank 11.7.2007--Rs.75,000/- withdrawn from bank 13.7.2007--Rs.50,000/- withdrawn from bank 16.7.2007--Rs.1,20,000/- withdrawn from bank 2.8.2007--Rs.15,000/- withdrawn from bank 3.8.2007--Rs.80,000/- withdrawn from bank 11.8.2007--Rs.1,00,000/- withdrawn from bank

8. 13.8.2001 Rs.50,000/-

12.9.2007--Rs.60,000/- withdrawn from bank 23.10.2007--Rs.50,000/- withdrawn from bank

9. 24.10.2007 Rs.50,000/-

10. 24.10.2007 Rs.50,000/-

11. 28.1.2008 Rs.2,00,000/-

13.3.2008--Rs.1,00,000/- withdrawn from bank 4 I.T.A .No.-2928/Del/2013

12. 23.3.2008 Rs.1,00,000/-

13. 25.3.2008 Rs.1,00,000/-

14. 26.3.2008 Rs.40,000/-

6.1 It is further seen that considering the explanation offered and the letter dated 06.12.2010 addressed to the AO wherein it had been submitted that the assessee alongwith his wife who were senior citizens at the relevant point of time and were living alone the withdrawals and deposits were made considering their perceived needs for maintaining sufficient cash with them to tide over the possible medical emergencies which may arise due to the medical condition of the assessee. For ready-reference we reproduce the relevant explanation from the impugned order:-

"The appellant has explained that source of cash deposit with bank are the cash withdrawals from the bank. The Assessing Officer has alleged that the date-wise movement of cash withdrawals and cash deposit has not been made in the bank on 31.03.2008 as reported by the A.I.R. but on various dates. Date (Cash Book) was also filed, copies of which are enclosed. That the Assessing Officer has further alleged that the cash withdrawal from the bank do not take place of documentary evidence. In this connection, it is submitted that the cash withdrawals are evidenced from the bank statement which are on record. A copy of bank statement is also enclosed. Further, the Assessing officer has alleged that it is not the case of the assessee who withdraws amounts without any purpose and keeping the same with him in deposits in the bank without any reasons. In this connection, it is submitted that the assessee and his wife are senior citizens and living alone. The assessee is also suffering from acute prostrate problem and needs medical attention from time to time. The assessee normally keeps Rs.3 to Rs.5 lakhs in cash at home to meet any emergency requirement on account of medical reasons. Further as and when the need arises the amount is deposited with the bank. "

(Emphasis provided in the present proceedings)

6.2. Accordingly on a consideration of the entirety of facts and circumstances as pleaded and considered we are of the view that the departmental ground deserves to be dismissed. To our minds the explanation offered at the assessment stage itself should have been accepted and the assessee ought not to have been put in a position to defend the relief granted by the CIT(A). The departmental machinery so set in motion in the present case may need an administrative policy rethink. The so called erratic action of deposit and withdrawal in the case of a senior 5 I.T.A .No.-2928/Del/2013

citizen has to be considered from the perspective of a senior citizen keeping his limitations and priorities in mind. We cannot claim to live in ignorance of the realities of the times where a senior citizen who is attempting to maintain his financial affairs in his sunset years in the best interests of himself and his wife where due to the exigencies of life they may not have their young child living with them. Thus living with the fear that they may not have sufficient funds at hand for the perceived medical emergencies and counter balancing the fear of maintaining perceived huge cash balances at home which may invite the attention of unscrupulous criminals who see the senior citizens as soft targets/ sitting ducks. Thus explanation offered in such a case should have been accepted at the first instance itself. Keeping the realities and frailties of life we find that it is the need of the hour to have some sensitizing exercise provided to the officers by creating specially trained officers who are required to interact with this special class of citizens as the demographic reports show that this class of citizens is increasing possibly due to better medical & health facilities and a greater sensitivity and humane approach in the sunset years will not act as an impediment in collecting just and due taxes.

6.3. In view of the above the departmental ground is dismissed.

7. As a result, the appeal of the Revenue is dismissed.

The order is pronounced in the open court on 04th of March 2015.

Sd/- Sd/- (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 04/03/2015 *Amit Kumar* 6 I.T.A .No.-2928/Del/2013

Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI