Renuka Gupta , New Delhi vs Department Of Income Tax

ITO Vs. Renuka Gupta Ward-43(4), Room No. 408, 119, AGCR Enclave, 4th Floor, Mayur Bhawan Near Karkarduma Court, New Delhi. New Delhi (PAN AAHPG1501D) (Appellant) (Respondent)

Appellant by : Shri Y.N. Chaubey, CA Respondent by : Shri Vikram Sahay, Sr. DR

ORDER

PER DIVA SINGH, JM

This is an appeal filed by the revenue against the order dated 21.6.2011 of

CIT(A) XXX, New Delhi pertaining to 2008-09 assessment year on the following

grounds :-

1. "The CIT(A) has erred on facts and in law in deleting the addition of Rs.

15,57,500/- made by the AO as unexplained cash credit u/s 68 of the I.T. Act 1961."

2. The relevant facts of the case are that the assessee by way of filing of her

return declared an income of Rs. 1,69,503/-. The said return was selected for

scrutiny through CASS. Accordingly after issuance of notices u/s 143(2) etc. the

AO took into consideration the fact that the assessee who was working with

HSBC bank and declared her income under the head " salary (pension income)'' 2 ITA 4101/Del/2011

and also "income from house property" and "income from other sources had

made as per AIR information cash deposits of Rs. 16,07,500/- in Khattri Co-op

(U) Bank Ltd. Karkardooma. Accordingly, he required the assessee to explain the

same. The assessee as per the assessment order is found to have explained vide

letter dated 21.10.2010 that the said bank account is in the joint name of herself

alongwith her husband and father in law i.e. Shri Praveen Kumar Gupta and Shri

Faqir Chand Gupta respectively. The said bank account was stated to be

exclusively operated by the father in law. The said statement was supported by

the affidavit of Shri Faqir Chand Gupta (father-in-law) and copy of bank account

statement accepting that the account was fully operated by him and the cash

deposited in the bank account also belonged to him. The AO verified this position

from the AO of Shri Faqir Chand Gupta (ITO ward 35(4) who informed that Shri

Faqir Chand Gupta was income tax payee however for the year under

consideration return of income had not been filed. In these circumstances

addition was made in the hands of the assessee.

3. In appeal before the first appellate authority, it was submitted that the

father-in-law had filed his return declaring profit u/s 44AF amounting to Rs.

65,817/- and salary income of Rs. 96,000/- and income from other sources

amounting to Rs. 35,683/- as per the computation of income filed the deposits

made in cash in the said account were explained as sale proceeds of retail

business and partly personal savings; the assessee in proof of fact that the

father in law had filed the return of income with ITO Ward 35(4) on 27.8.2008 3 ITA 4101/Del/2011

vide acknowledgement no. 3325 alognwith copy of intimation u/s 143(1) also

filed the same and made the following submissions explaining the same :-

"Mr. Faquir Chand Gupta, father in law of assessee has filed his return of income declaring profit u/s 44AF amounting to Rs. 65,817/-, @5% of TO. From retail trade salary income Rs. 96,000/- and income from other sources Rs. 35,683/- as appears from his computation enclosed. Therefore cash deposited on account of retail business u/s 44AF is Rs. 13,16,000/- on account of salary income is Rs. 96,000/- and remaining Rs. 195,500/- is out of his past savings. Calculation for the same is given here under :-

Total cash deposited into bank Rs. 16,07,500.00 Cash deposited from retail business u/s 44AF Rs. 13,16,000.00 Cash deposited from salary income 96,000.00 Cash depositetd from past savings Mr. Faquir Chand Gupta Rs. 1,95,500.00 Total Rs.16,07,500.00

The assessee has prepared this statement in consultation with Mr. Faqir Chand Gupta and on the basis of his return of income filed with ITO 35(4), Mr. Faqir Chand is aged aroung 75 years and run his small retail business."

4. Considering the same the CIT(A) partly accepted the claim of the assessee

holding as under :-

"5. I have considered the submissions of the appellant and the order of the AO. The bank account was joint account with father in law. He was having small trading retail business in cloth for so many years. He is now 75 years old. I have seen the bank statement and noticed that major transactions appearing in the bank account belongs to appellant's father in law. During the financial year 2007- 08, sum of Rs. 16,07,500/- was deposited by father in law at number of occasions in cash, partly being the sale proceed of retail business and partly being personal savings, cash deposit into Khatri Urban Co-operative Bank, Karkarduma, Delhi. The appellant's father in law is also an income tax assessee and filed his return of income with ITO Ward 35(4). On these facts and circumstances of the case, I am of the view that the appellant had declared his income of Rs. 1,59,503/- which is very small. Moreover the cash deposited in the bank amount is not to be considered that all the transactions were made by her father in law. I am of the view that Rs. 50,000/- be added on estimate basis to the income of the appellant. The AO is directed to give the relief of Rs. 15,57,500/- and the balance amount of Rs. 50,000/- is upheld.

4 ITA 4101/Del/2011

5. Aggrieved by this, the revenue is in appeal before the Tribunal. The Ld.

DR Mr. Sahay inviting attention to the assessment order and the impugned order

contended that the CIT(A) has granted relief without coming to any conclusive

finding ; it was his submission that if at all he was convinced that the amount

belonged to the father in law of the assessee then the occasion to make the

disallowance in the hands of the assessee did not arise. The fact that addition of

Rs. 50,000/- has been sustained clearly demonstrates the fact that assesssee's

submissions have been accepted without any reasoning or basis. In these

circumstances it was clear that the impugned order should be set aside and

assessee be directed to explain each and every entry in this said bank account

copy of which is placed in the paper book. The Ld. AR on the other hand relied

upon the impugned order.

6. We have heard the rival submissions and perused the material available

on record. From the perusal of the paper book page No. 49 to 51 which contains

the copy of the bank account. It is seen that the opening balance in the said

bank account for the year under consideration was Rs. 61,271.88 and the

closing balance was Rs. 31,017.46. A perusal of the same further shows that the

AO has ignored the debit entries and has mainly chosen to take into

consideration the credit entries and in fact the debits are more than the credits.

In these circumstances the reason for considering the credit entries was required

to be addressed by the Sr. DR who merely placed reliance on the assessment

order. In the aforementioned peculiar facts and circumstances of the case on 5 ITA 4101/Del/2011

considering its submission of the parties, we find no merit in the departmental

appeal. The ground raised is accordingly dismissed.

7. In the result appeal of the revenue is dismissed.

Pronounced in the open court on 18th February, 2015.

Sd/- Sd/- (R.S. SYAL) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated:18th February, 2015 Veena Copy of the order forwarded to:- 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR By Order Deputy Registrar, ITAT.