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TMI Blog2024 (4) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax (Appeal) order dated 27/12/2021 is enclosed herewith, plz accept the same. (2) THAT Electronically Appeal in this case was filed on 18/02/2022 and physical appeal in this case was due to filed on 20/03/2022. But physical documents was filed on 06/04/2022, it means late by 17 days, plz note. Delay is not intentionally. Delay is beyond the control of the assessee. Delay is due to following reasons (1) Due to death of Husband Shri Bal Kishan ji Jajra, she is fully disturbed (2) Due to Arrest and imprison of Real Son Shri Naresh Jajra, she is fully disturbed (3) Main accountant of the firm namely Shri Kamal ji Sharma is left the firm Due to following aforesaid reasons, she is fully disturbed. You are therefore requested to please accept my sincere apology, and condone the delay and accept the same and do the needful." 2.2 The ld. AR of the assessee appearing in this appeal submitted that the assessee is serious on the duties and the delay of 37 days is on account of the fact the assessee has filed the appeal online on 18/02/2022 but the physical copy of was filed late. Moreover, the assessee lost her husband and she was mentally disturbed. Based on these set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 115BBE and interest charged by AL is also not judicious." 4. Brief fact of the case is that the return of income for the assessment year 2017-18, in ITR-1 was e-filed on 27.03.2018 declaring total income of Rs. 4,10,500/- The case was selected for scrutiny under CASS. First notice u/s 143(2) of the Act was issued on 13.08.2018. There after the fresh notices u/s 142(1) of the Act were issued and the assessee was requested to furnish relevant details/information electronically through E-filing mode. The case was selected for scrutiny u/s 143(3) of the Act by CASS and type of scrutiny was "limited" and the issues identified for examination was per notice u/s 143(2) were "cash deposit during demonetisation period". On the aspect of the proposition the assessee was confronted by the ld. AO on the cash deposit made by the assessee. The reply of the assessee and the contention of the ld. AO is reproduced herein below:- S. No. Assessees Explanation Remarks by AO A The source of cash deposit of Rs. 11,00,000/- comes out from cash in hand, complete copy of narration of each entry for AY. 2017-18 enclosed. Opening cash balance as on 01/04/2016 was Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1998 wherein the nature of income is already shown as tailoring. This fact of filling the return and disclosing the nature of income is appearing from the ITR filed and same is already on record of the revenue. The assessee is having the source which the ld. AO is disputing merely on the reason that the assessee has deposited cash in the demonetisation period. The cash which the assessee is keeping on hand and because she is assessed to tax since 1998 and her ITR already filed by the assessee showing cash on hand and supported by cash book cannot be disputed. Even the opening balance cannot be added as income of the year under consideration. All the contention of the assessee not considered on merits and the ld. AO based on the cash book not accepting the source of income and considering the aspect of the matter that various other family members have also deposited heavy cash during the demonetisation and therefore on the similar line the deposit of cash of Rs.11,00,000 in the hands of the assessee not considered as genuine and the same was treated as unexplained within the provision of section 68 of the Act. 5. Aggrieved from the order of the assessing officer, assessee preferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bers who are residing at the same place had also made huge cash deposits during the demonization period the details of which are reproduced as below: S. No. Name and Address and PAN of the assessee Income (Rs.) as per ITR, and ITR form Cash deposit during demonetization 1. Sh. Rajesh B, Jajra, C-40, Rajeev Nagar, outside Mahamandir IIIRD pole, Jodhpur AAEHR 2635G Rs. 4,32,900/- Rs. 14,00,000/- 2. Bal Kishan R. Jajra, C-40, Rajeev Nagar, outside Rs. 6,21,790/- Rs. 13,50,000/- Mahamandir IIIRD Pole, Jodhpur AACHB8236K 3. Bhavna Devi Jajra, C-40, Rajeev Nagar, outside Mahamandir IIIRD Pole, Jodhpur ADGPJ7302P Rs. 4,04,780/- Rs. 12,00,000/- 8. Considering all the facts, narrated above, it is fair to conclude that the appellant was taken aback from the news of demonetization. Whatever cash he and his family members had was deposited in the bank account. The narratives are an afterthought and an attempt to save his income from taxes, If entire deposits of the family are taken into consideration, it comes to Rs 50,50,000/- which is huge and is unlikely to be earned from tailoring, cooking etc. There is no evidence to suggest that any of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 65-67 9. Bank pass book of Bhavna Ji Jajra for address proof 68 10. Dhakeshwari Cottaon Mills Ltd. Vs. Commissioner of Income Tax, West Bengal on 29 October, 1954: Supreme Court 74-81 11. Hon'ble Supreme Court in Sumati Dayal (1995) 214 ITR 801 (SC) 82-87 12. ITAT Allahabad Bench in Sudhir Kumar Tiwari vs. ITO 88-92 13. ITAT Delhi bench in sheo Chand Yadav vs. ITO 93-96 14. ITAT Pune Bench in Mrs. Usha Narayan Chaware vs. ITO 97-101 15. Order u/s 250 of income Tax Act 102-109 16. AO order u/s 143(3) of Income Tax Act 110-116 17. Power of Attorney in our favour 117 7. The ld. AR of the assessee in addition to the above paper book has filed the following written submission:- "(1) THAT Please refer our Form Number 36 filed Electronically on 18/02/2022 for filling the appeal AY 2017-2018 against the order under section 250 of Income Tax Act. 1961 along with statements of facts and grounds of appeal. (2) THAT No order was passed by Assessing Authority under 144 of Income Tax Act. 1961. mentioned by Commissioner of Income Tax (Appeals)NFAC in his order page no line no 5, meaning there by Commissioner of Income Tax (Appeals) NFAC not seen proper asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), NFAC is illegal, not as per facts of the case and bad in the eyes of law, hence whole addition is liable to be deleted. (5) However copy of cash book from 1.11.2016 to 30.11.2016 enclosed (page no 12) & complete cash book, ledger, bank book from 01.4.2016 to 31.03.2017 is enclosed (page no 13-25) but Assessing Authority not gone through the Cash Book and books of accounts. Hence order passed by Learned Assessing Authority dated 24/11/2019 and appeal order dated 27.12.2021 passed by Commissioner of Income Tax (Appeals) National Faceless Appeal Centre is illegal, bad in law as well as facts of the case. (6) THAT the above named assessee is an existing assessee of income Tax from last more than 25 Years (7) That the assessee is a Senior Citizen and attained the age of 77 years. (8) THAT the assessee is done the tailoring and stitching work in some previous years also and. business income was shown in business head which is verifiable from page no 26-27 but later on due to irregularity of business activities in whole year or whole day due to old age, so Income is shown in head other source of income. Whole receipts received from different petty persons in Cash only. Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown and filed the Income Tax Returns with Trading account, Profit and Loss account, Capital a/c and Balance Sheet, which is tabulated in (page no 26-27). Assessing Authority not seen previous year income tax returns from Asst. Yr. 1998-1999 to 2008-2009 and AY 2019-2020 (12 years), previously assessee was filed ITR 4, ITR 2 and ITR 1 with Computation of total income, Trading account, Profit & loss a/c, Capital a/c and Balance Sheet then Why the Assessing Authority was mentioned in page no 4 para 7 line no.6 only from ALY 2010-11 to 2018-2019, it means Assessing Authority manipulated the facts deliberately. (11) THAT I am Enclosing herewith detailed chart at (page no 26-27) showing the details of BUSINESS INCOME DONE AND INCOME EARNED PREVIOUSLY WITH INCOME TAX RETURNS COPY for AY 1998-1999 ΤΟ ΑΥ 2008-2009 AND AY 2019-2020 (12 YEARS). On going through the aforesaid chart, your honour would find that the assessee was having Business income. from AY 1998-1999 to AY 2008-2009 (For consecutive eleven years) and AY 2019-2020 and Closing Cash Balance, Debtors, Creditors have already been shown in Income Tax Return also. Hence whole story was made by Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of Karnataka State Forest Industries Corporation Ltd., Vs. CIT (1993) 201 ITR 674 (page no 69-73) has held that the Assessing Officer's powers under the Section are not arbitrary and he must exercise his discretion and judgment judicially. There must be something more than mere suspicion to support an assessment under Section 145(3). The rule of law on this subject has been fairly and rightly stated by the Supreme Court in the case of Dhakeswari Cotton Mills Ltd., v/s. CIT (1954) 26 ITR 775. (page no 74-81) (15) THAT I am again enclosing herewith Cash Book, Ledger, Bank Book for Asst. Yr 2017-2018 (page no 13-25).On going through the cash book your honour would find that Complete Narration of each and every entry in Cash Book is available in Cash Book, So Question of Income source not arises. When complete books of accounts were produced at the time of assessment and same is examined by Assessing Authority, then Assessing Authority should bring on record material and specific defects in the books of accounts of the assessee on the basis of which he has arrived at the conclusion with regard to correctness or completeness of the accounts of the assessee or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank a/c is enclosed. (Page no 65-67) Explanation as Past Savings of HUF and Members, No other Deposits during Demonetization: ITAT deletes Income Tax Addition Sudhir Kumar Tiwari vs Income Tax Officer 2022 TAXSCAN (ITAT) 1464 (Page no 88-92) The Income Tax Appellate Tribunal (ITAT), Allahabad Bench deleted income Tax Addition on the ground that the explanation was past savings of HUF and its members and no other deposits were made during demonetization. A Single Bench of the Tribunal consisting of Vijay Pal Rao, Judicial Member observed that "Accordingly, in the facts and circumstances of the case when the assessee has explained the source of Rs. 1,00,000/- as past savings of the assessee HUF and its members and there are no other deposits during the demonetization the addition made by the Assessing Officer is deleted." (19) That The Delhi Bench of Income Tax Appellate Tribunal (ITAT), held that the assessee has successfully demonstrated source of cash deposit to its bank account during demonetization period thus no income tax addition can be made under Section 68 of income Tax Act, 1961. The Bench comprising of Chandra Mohan Garg, Judicial Member and Dr. B.R.R. Kumar, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared out of past savings Cash balance as on 01.04.2016 and income related to current year only. (23) THAT whole story was made by the assessing authority in page no 5 para no 9 of Assessment Order here to mention that other member of the assessee's family has done the same thing and had tried to evade taxes In this respect I am to state that AO list as per order two assessee's are HUF entity and other BHAVNA DEVI JAJRA has no direct connection with above named assessee. Bhavana jajra is not residing with the above assessee on same place actually address of Bhavna Jajra is B 3 Shakti Nagar Gali no 1 paota c road jodhpur which is verifiable from bank passbook enclosed at (page no 68). Hence CIT (Appeals) NFAC mentioned wrongly facts in his order page no 6 last para, (24) THAT issue for penalty proceedings u/s 271AAC of Income Tax Act is also not attracted as the income referred has been already reflected in the income tax return filed and the relevant tax has been paid by the assessee voluntarily. Hence addition made by AO on such recourse primarily hedged on surmises, conjecture, assumptions, presumptions and whims of the revenue authorities is clearly unwarranted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no calculation to show how he can be relied from business income as there is no source from the business income or there is no business stock available. Even though there is demonisation the assessee seamlessly even after demonetisation having the cash income it self suggest that the accounts are fabricated. 10. We have heard both the parties and perused the materials available on record. For the year under consideration the assessee filed her return of income for the assessment year 2017-18, in ITR-1 and was e-filed on 27.03.2018 declaring total income of Rs. 4,10,500/- The case was selected for scrutiny under CASS. The case was selected for scrutiny u/s 143(3) of the Act by CASS and type of scrutiny was "limited" and the issues identified for examination was per notice u/s 143(2) were "cash deposit during demonetisation period". The assessing officer did not satisfied from the explanation of the assessee and the records produced by the assessee. The ld. AO noted that explanation of the assessee were not satisfactory and contradictory therefore, the assessee was issued another notice invoking the provision of section 145(3) of the Act in response to that notice the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it is not a case of introduction of cash credit but it is a case of unexplained investment under section 69 of the Act of 1961 and the appropriate previous year for inclusion is the relevant financial year and, therefore, the opening capital account cannot be added as an unexplained investment under section 69 of the Act of 1961 for the assessment year 1993-94. The Tribunal also held that the genuineness of the capital introduction has already been adjudicated upon by the assessing authority for the appropriate financial year relevant to assessment year 1992-93. The Tribunal also took note of the fact that the order passed by the assessing authority for the assessment year 1993-94 on the basis of notice under section 148 dated 17-6-1997 has already been quashed by the order dated 6-12-2001 in the same ITA No. 71 (JDP)/99. Therefore, on the basis of the above decision dated 6-12-2001, the appeal of the assessee was allowed by the Income Tax Appellate Tribunal. Nothing has come on record what happened to the order dated 6-12-2001 and whether the said order of the Tribunal was ever challenged by the revenue or not. When the revenue itself has accepted the order dated 6-12-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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