Jayshreeben Chhatrashal Parmar, Surat vs Department Of Income Tax

ITO, Smt. Jayshreeben Chhatrashal Ward-9(2), Vs Parmar, Surat C/o. Parmar Boot House, 11/215, Bhagaltalav, Surat PAN : ABBPP 1658 D

अपीलाथ)/ अपीलाथ)/ (Appellant) ू+यथ) यथ)/ थ)/ (Respondent)

Revenue by : Shri Nimesh Yadav, Sr. DR Assessee(s) by : Shri S.B. Vaidya, AR

सुनवाई क- तार.ख/ / Dateof Hearing : 16/04/2015 घोषणा क- तार.ख / Date of Pronouncement: 08/05/2015

आदे श/O R D E R

PER SHRI KUL BHARAT, JUDICIAL MEMBER:-

This appeal by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-V, Surat ("CIT(A)" in short) dated 17.01.2011 for the Assessment Year 2007-08.

2. The Revenue has raised the following grounds of appeal:-

1. On the facts and in the circumstances of the case and in law , the ld.

CIT(A) has erred in deleting the addition of Rs.27,49,761/- made by the A.O. u/s 69 of the Act despite the fact that assessee failed to explain the source of the credits made in the undisclosed bank account.

2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of Rs.27,49,761/- made by the A.O. u/s 69 of the Act after accepting the plea of the assessee that cash deposits made in the undisclosed account were made from the cash withdrawn from ITA No. 1468/Ahd/2011 ITO v. Smt. Jayshreeben C. Parmar For AY 2007-08 2

this account on earlier occasions despite the fact that assessee failed to furnish any documentary evidences in support of this claim .

3. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of Rs.27,49,761/- made by the A.O. u/s 69 of the Act after accepting the plea of the assessee that an amount of Rs.8,74,680/- was the loan amount taken from friends/relatives despite the fact that these loans were not reflected in the balance sheets of the lenders. Further the assessee failed to prove the genuineness and the credit worthiness of these transactions.

4. On the facts and in the circumstances of the case and in law, the ld. C1T(A) has erred in deleting the addition of Rs.27,49,761/- made by the A.O. u/s 69 of the Act after accepting the plea of the assessee that an amount of Rs.4,80,000/- was the cash deposit made by the joint holders of this undisclosed bank account despite the fact that the assessee failed to explain the source of funds and creditworthiness of the joint holders for making these cash deposits.

5. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of Rs.27,49,761/- made by the A.O. u/s 69 of the Act after accepting the plea of the assessee that an amount of Rs.5,57,811/- was deposit made out of the sale proceeds of footwear trading, the profit of which had already been offered to the department u/s 44 AF, despite the fact that the assessee failed to furnish any documentary evidences in support of her claim that this amount of Rs. 5,57,711/- was part of her retail trading business.

6. It is therefore, prayed that the order of the Id. CIT (A) be set aside and the Assessing Officer's order be restored.

3. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") was framed vide order dated 24.12.2009. While framing the assessment, the Assessing Officer made addition of Rs.50,76,587/- by invoking the provisions of Section 69 of the Income-tax Act, 1961. Against this, the assessee filed an appeal before the ld.CIT(A) who, after considering the submissions of the assessee, directed ITA No. 1468/Ahd/2011 ITO v. Smt. Jayshreeben C. Parmar For AY 2007-08 3

the Assessing Officer to reduce the addition u/s 69 to Rs.23,26,826/- against the addition of Rs.50,76,587/- made by the Assessing Officer.

4. The ld. Sr. DR. submitted that the CIT(A) was not justified in reducing the addition to Rs.23,26,826/- u/s 69 of the Act. He submitted that during the course of assessment, the Assessing Officer noticed that the assessee was maintaining bank account i.e. SB Account No.61504, in the Surat People's Co-operative Bank, Bhagatalav Branch, Surat which was not disclosed to the Department. He submitted that there were credit entries in SB Account No.61504 held by the assessee in the Surat People's Co- operative Bank. He submitted that admittedly the assessee was joint account holder of the account and was operating it. He submitted that there is no dispute with regard to the fact that the assessee has not disclosed the credit entries of the undisclosed bank account in the return of income. He also submitted that the CIT(A) failed to appreciate the fact that this bank account had not been accounted for in the books of accounts of the assessee and the deposits in the bank accounts were also not accounted for by the assessee. The assessee had grossly failed to explain the source of credits in this account. He further submitted that the ld. CIT(A) failed to appreciate the fact that the assessee has not furnished any evidence from other joint holder of the account to prove the genuineness of the cash credit. The ld. CIT(A) also failed to appreciate the fact that prior to 07.12.2009, the assessee had not submitted that it has any other income from the business which is covered under the provisions of 44AF of the Act and the credits in the bank account No.61504 pertained to the business income. He further submitted that the CIT(A) failed to appreciate the fact that the sources of loans taken from the so-called parties were unexplained. He submitted that the CIT(A) ITA No. 1468/Ahd/2011 ITO v. Smt. Jayshreeben C. Parmar For AY 2007-08 4

failed to appreciate the fact that the loans were not reflected in the balance- sheet.

5. On the contrary, the ld. Counsel for the assessee Mr. Vaidya submitted that the assessee has explained the source of credits. He further submitted that it is an admitted position that the account is held in the joint name and credits were made jointly; therefore the assessee cannot be held solely responsible and the assessee had explained the same before the Assessing Officer as well as the ld. CIT(A).

6. We have heard the rival submissions, perused the orders of the lower authorities and material available on record. There is no dispute with regard to the fact that the assessee had not declared the account i.e. SB. A/c. No.61504 maintained with The Surat People's Co-operative Bank, Bhagatalav Branch, Surat, before the Revenue Authorities in the return filed. It is also not disputed that the credit entries made into the account No.61504 was held in the joint name and the credits were made out of loans, redemption of Mutual Fund, interest/dividend and deposits by other joint account holders. Therefore, the Assessing Officer made addition of Rs.50,76,587/- u/s 69 of the Act, on account of the cash credit/deposits and investment made in the bank account No.61504 by treating the same as income of the assessee from undisclosed sources. The ld. CIT(A) has reduced the addition u/s 69 to the extent of Rs.23,26,826/-, treating the balance amount as explained. The grievance of the Revenue is that the ld. CIT(A) was not justified in reducing the addition and the admitted position is that the assessee had not disclosed the bank account in the return of income and offered only the business receipts for taxation. The explanation given by the assessee is that the account was joint account and the assessee cannot be held solely liable for the credits into the said account. We find ITA No. 1468/Ahd/2011 ITO v. Smt. Jayshreeben C. Parmar For AY 2007-08 5

that neither the Assessing Officer nor the CIT(A) had made any inquiry with regard to the other joint account holders. Therefore, considering the totality of the facts, we hereby set aside the order of the CIT(A) and restore the issue back to the file of the Assessing Officer for deciding the issue afresh. The Assessing Officer is hereby directed to make a fresh assessment after making inquiries from the joint account holders. Thus, this ground of appeal of the Revenue is allowed for statistical purposes.

7. In the result, the appeal of the Revenue is allowed for statistical purposes.

Order pronounced in the Court on 8TH May, 2015 at Ahmedabad.

Sd/- Sd/-

( N.S. SAINI) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 08/05/2015 *Biju T. षत Copy आदे श क- ूितिल2प अमे2षत/ of the Order forwarded to : 1. अपीलाथ) / The Appellant 2. ू+यथ) / The Respondent. 3. संबंिधत आयकर आयु4 / Concerned CIT 4. आयकर आयु4(अपील) / The CIT(A)

5. 2वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड& फाईल / Guard file.

/ BY ORDER, आदे शानु सार

TRUE COPY Dy./Asstt.Registrar) उप/सहायक पंजीकार ( उप/ अिधकरण, अहमदाबाद / आयकर अपीलीय अिधकरण, ITAT, Ahmedabad