Sudha Patel v. Income-tax Officer, Vidisha
[Citation -2016-LL-0922-57]

Citation 2016-LL-0922-57
Appellant Name Sudha Patel
Respondent Name Income-tax Officer, Vidisha
Court ITAT-Indore
Relevant Act Income-tax
Date of Order 22/09/2016
Assessment Year 2010-11
Judgment View Judgment
Keyword Tags unexplained cash credit • agricultural produce • agricultural income • confirmation letter • unexplained credit • reason to believe • source of fund
Bot Summary: The Assessing Officer mentioned that from the cash flow statement of the assessee it is seen that the assessee has shown cash gift totaling to Rs.5,50,000/- from Shri Anil Patel, his brother, and Shri Rahul Raghuvanshi. 4.2 From the bank statement, bank book and cash book furnished by the assessee it is seen that the assessee has during the previous eyar indeed deposited cash totaling Rs. 37,29,100/- which is also evident from the documents furnished by the assessee herself. The letter of the Branch Manager, SBI, Bareli Mentions about peak balance of Rs. 20,44,290/- and not about 7 Smt. Sudha Patel ITA No. 390/Ind/2015 total amount of cash deposited during the F.Y. thus the contention of the assessee that the total amount of cash deposited in her bank a/c as shown in the AIR report is not correct, fails in view of the above facts and documents furnished by the assessee. 4.3 From the cash flow statement furnished by the assessee it is seen that the assessee has shown cash gift totaling Rs. 5,50,000/- from her brother Shri Anit Patel and son Shri Rahul Raghuwanshi, in support of her contention the assessee furnished affidavit of both the donor and donee claiming to have given and received cash gift. Since the assessee has got her own bank account and is residing in a joint family at Bareli, Raisen which is having banking facility and also the fact that both the brother and son of 8 Smt. Sudha Patel ITA No. 390/Ind/2015 the assessee too have got their own bank accounts the contention of the assessee top have received it in cash seems to be an afterthought for covering her cash deposit also the fact that no gift dee4d have been executed during the time of gift but affidavit made only on 28.1.2013 much after the start of the assessment proceedings also give strength to theory of afterthought therefore the contention of the assessee of receiving cash gift ofRs. The Assessing Officer has verified the cash book furnished by the assessee and the Assessing Officer was of the view that from the cash book the assessee has received Rs. 10,75,000/- from recovery of debt and Rs. 5 lacs were received against sale of plot. In respect of Rs. 14,95,949/- the assessee submitted that this amount has been reflected in the cash book and the assessee submitted that this amount was withdrawn by the assessee and it was redeposited in the bank account which is evident from the bank statement filed by the assessee at page A-1 of the paper book.


Smt. Sudha Patel ITA No. 390/Ind/2015 IN INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE Before Shri D.T. Garasia, JM & Shri O.P. Meena, AM ITA No.390/Ind/2015 A.Y.2010-11 Smt. Sudha Patel Raisen PAN ALMPP 3679B ::: Appellant Vs Income tax Officer Vidisha ::: Respondent Appellant by Shri Nitin Kaushik Respondent by Shri Mohd. Javed Date of hearing 6.9.2016 Date of pronouncement 22.9.2016 ORDER This is appeal preferred by assessee against order of learned CIT(A)-2, Bhopal, dated 20.3.2015. 2. Brief facts of case are that assessee has filed return of income on 22.9.2010 declaring income at 1 Smt. Sudha Patel ITA No. 390/Ind/2015 Rs.16,180/-. As per AIR information, assessee is found to have made cash deposits of Rs.37,29,100/- in her savings bank account with SBI, A.D.B. Bareeily, Raisen. Accordingly, case was selected for scrutiny by Assessing Officer. 3. first ground of appeal is against making addition of Rs. 5,50,000/- towards unexplained credit u/s 68 of Act. 4. Assessing Officer mentioned that from cash flow statement of assessee it is seen that assessee has shown cash gift totaling to Rs.5,50,000/- from Shri Anil Patel, his brother, and Shri Rahul Raghuvanshi. In support of her contention, assessee has furnished affidavit of both donor and donee claiming to have given and received gift. Since she has got her own account and residing in joint family at Bareily, which is having bank facility, both brother and son of 2 Smt. Sudha Patel ITA No. 390/Ind/2015 assessee are having bank accounts. Therefore, contention of assessee to have received gifts in cash seems to be afterthought for covering cash deposit. fact that no gift deed has been executed at time of making gift but affidavit was madwe only after 28.1.2013 much after start of assessment proceedings gives strength to afterthought. Therefore, contention of assessee to have received gift of Rs. 5,50,000/- was rejected by Assessing Officer. matter was carried in appeal but learned CIT(A) confirmed addition made by Assessing Officer. 5. learned counsel for assessee submitted that gift deed of donors along with agricultural book showing agricultural land 24 acres of her brother Anil Patel and gift of donor Rahul Raghuvanshi who was having land of 18.5. acres, was produced before authorities below. Therefore, creditworthiness and identity of 3 Smt. Sudha Patel ITA No. 390/Ind/2015 donors was accepted but capacity of donor has been doubted by Assessing Officer. only ground for disallowing gift is that donor has given gift in cash and filed affidavit of both persons, is after-thought which is not tenable in law. On other hand, learned DR relied upon orders of authorities below. 6. We have heard both sides. We find that no gift deed has been prepared and submitted in proceedings in support of alleged gift from Shri Anil Patel and Rahul Raghuvanshi. In support of contention, assessee has claimed that gift has been received in cash but assessee is having bank account. Both brothers and son are also having their own bank account. Therefore, when both donor and donee have bank account, there is no reason to believe that assessee has received gift in cash and it is after-thought covering cash deposit. Therefore, no gift deed has been executed but 4 Smt. Sudha Patel ITA No. 390/Ind/2015 affidavit was made after start of assessment proceedings. Therefore, we confirm same. This ground is accordingly dismissed. 7. next four grounds relate to addition of Rs.20,44.290/- as unexplained cash deposit in assessee s account. Assessing Officer has mentioned in assessment order as under :- 4.1 From AIR details available on record it is seen that assessee has during previous year had made cash deposit totaling Rs. 37,29,100/- in her saving bank a/c at SBI, ADB Bareily. Vide query letter dt. 26.6.2012 assessee was asked to explain source of fund for such cash deposit. assessee vide written reply furnished on dt. 10.12.2012, 18.12.2012 and 19.2.2012 explained with help of Cash Account aht assessee has during year 5 Smt. Sudha Patel ITA No. 390/Ind/2015 received cash totaling Rs. 22,33,151/- including opening cash balance of Rs. 2,651/-. assessee vide written reply received dt. 19.2.2013 contested aIR information stating that total deposit in her saving bank a/c is only Rs. 20,44,290/- and not Rs. 37,29,100/- as shown in AIR report. To support her contention assessee furnished letter from Branch Manager SBI, ADB Bareli. Vide query letter issued dt. 26.6.2012 assessee was asked to explain source of fund for such cash deposit. assessee vide written reply furnished on dt. 10.12.2012, 18.12.2012 and 19.2.2012 explained with help of Cash Account that assessee has during year received cash totaling Rs.22,33,151/- including opening cash balance of Rs. 2,651/-. assessee vide written reply 6 Smt. Sudha Patel ITA No. 390/Ind/2015 received dt. 19.2.2013 contested AIR information stating that total deposit in her saving bank a/c is only Rs. 20,44,290/- and not Rs. 37,29,100/- as shown in AIR report. To support her contention assessee furnished letter from Branch Manager SBI, ADB Bareli. assessee also furnished copy of Bank book, fund flow statement and bank statement to prove her contention. 4.2 From bank statement, bank book and cash book furnished by assessee it is seen that assessee has during previous eyar indeed deposited cash totaling Rs. 37,29,100/- which is also evident from documents furnished by assessee herself. letter of Branch Manager, SBI, Bareli Mentions about peak balance of Rs. 20,44,290/- and not about 7 Smt. Sudha Patel ITA No. 390/Ind/2015 total amount of cash deposited during F.Y. thus contention of assessee that total amount of cash deposited in her bank a/c as shown in AIR report is not correct, fails in view of above facts and documents furnished by assessee. 4.3 From cash flow statement furnished by assessee it is seen that assessee has shown cash gift totaling Rs. 5,50,000/- from her brother Shri Anit Patel and son Shri Rahul Raghuwanshi, in support of her contention assessee furnished affidavit of both donor and donee claiming to have given and received cash gift. Since assessee has got her own bank account and is residing in joint family at Bareli, Raisen which is having banking facility and also fact that both brother and son of 8 Smt. Sudha Patel ITA No. 390/Ind/2015 assessee too have got their own bank accounts, therefore, contention of assessee top have received it in cash seems to be afterthought for covering her cash deposit also fact that no gift dee4d have been executed during time of gift but affidavit made only on 28.1.2013 much after start of assessment proceedings also give strength to theory of afterthought therefore contention of assessee of receiving cash gift ofRs. 5,50,000/- is rejected and same is treated as unexpoained cash credit in books of assessee, therefore, same is added to total income of assessee u/s 68. (Addition of Rs.5,50,000/-). Penalty u/s 271(1)(c) is separately initiated for concealing of furnishing of inaccurate particulars of income. 9 Smt. Sudha Patel ITA No. 390/Ind/2015 5. From cash a/c furnished by assessee it is seen that amount of Rs. 10,75,000/- has been shown as cash recovery from debtors. During course of assessment proceedings counsel assessee was asked to explain same. counsel explained that assessee is having huge agricultural land in her name and in name of her other members and agricultural activity on such land is being carried on from year to year since past and out of such agricultural income accumulated she had given loans to various farmers earlier which is outstanding as debtors in earlier year s balance sheet which has now been realised in cash and since all debtors are farmers loan have been received back in cash. assessee also stated that no books of accounts have been maintained by her in 10 Smt. Sudha Patel ITA No. 390/Ind/2015 past since she had only agricultural income. To prove her contention assessee furnished copy of last 3 years balance sheet which was verified. assessee also claimed to have received advance totaling Rs. 5,00,000/- for sale of various plots which she claimed that registry was completed in later years. In support of her claim assessee furnished copy of sale deed which was verified. 6. During year assessee has also claimed cash receipt of agricultural income of Rs.1,05,500/- from 4.5 acres of agricultural income. In support of her contention assessee filed copy of P-II register showing land holding by assessee but failed to furnish any Mandi receipt in support of selling such agricultural produce at Mandi. assessee stated that she 11 Smt. Sudha Patel ITA No. 390/Ind/2015 sold agricultural produce outside Mandi to local farmers as seed. As per established norms and well settled judicial pronouncements net agricultural receipt per acre of land can be presumed to be Rs., 20,000/- in absence of any records of expenses incurred by assessee. Thus, net agricultural income of assessee from 4.5 acres of land comes out to be Rs. 90,000/-, remaining Rs. 15,500/- is added to income of assessee as income from other sources. (Addition of Rs.15,500/- ).Penalty u/s 2371(1)(c) is separately initiated for concealing or furnishing of inaccurate particulars of income. 7. Thus from above discussion and Cash account furnished by assessee it is seen that out of cash deposit of Rs. 37,29,100/- in her 12 Smt. Sudha Patel ITA No. 390/Ind/2015 saving bank a/c at SBI, ADB Bareli cash amount of only Rs. 16,83,151/- i.e. Rs. 2,651/- opening cash in hand, Rs. 5,00,000/- advance received against sale of plot, Rs. 10,75,000/- recovery from debtors of earlier year and Rs. 1,05,500/- claimed to have been received from agricultural income is explained by assessee, rest of amount Rs.20,45,949/- is found to be unexplained cash credit in books of assessee for which assessee did not furnish any satisfactory explanation, therefore, same is treated as unexplained cash credit and added to total income of assessee u/s 68 (Addition Rs.20,45,949/-). 8. matter was carried in appeal and learned CIT(A) dismissed same. Now assessee is in appeal before Tribunal. 13 Smt. Sudha Patel ITA No. 390/Ind/2015 9. Before us, learned counsel for assessee submitted that as per AIR information assessee has deposited Rs. 37,29,100/- in cash in her bank account with SBI, A.D.B. Bareily. learned counsel for assessee submitted that assessee has of each and every deposit and withdrawal from bank account in order to explain deposit in bank along with withdrawals made from said bank account. assessee has furnished memorandum of cash book and rotation of cash statement explaining each and every deposit in bank account and withdrawals. All deposits made in bank account are out of cash available in said cash book. cash book and cash flow statement suggest that amount rolled over bank account was not invested and available for subsequent deposits. datewise balance has been worked out and entire cash was recycled in bank account which was accepted by Assessing 14 Smt. Sudha Patel ITA No. 390/Ind/2015 Officer. learned counsel for assessee also produced confirmation letter of SBI, Bareily. Assessing Officer did not explain how this amount was arrived at by assessee. Assessing Officer has not considered withdrawals made by assessee which have been again deposited bank in bank and were not utilised. In cash book amounts withdrawn from bank were shown and entries were duly recorded and explained in cash book. If amount withdrawn and redeposited in such position, there are certain deposit and credit entries in bank account. Therefore, only deposit in bank cannot be considered. During course of hearing, learned counsel for assessee has filed statement in paper book A-2 whereas he has explained deposit and submitted that opening balance was Rs.5048/-, interest was Rs.9727/-. net deposit in bank was Rs. 37,43,875/- out of which Rs.16,99,585/- 15 Smt. Sudha Patel ITA No. 390/Ind/2015 was withdrawn. Therefore, remaining amount is Rs. 20,44,290/-. assessee has gift of Rs. 5,50,000/-, sale of plot Rs. 5 lacs and agricultural income of Rs.10,50,000/- assessee has made withdrawal which was redeposited. Moreover, assessee has recovered amount from debtors which comes to Rs. 8,88,790/-. Thus, amount reflected in cash book is Rs. 20,44,029/-. Therefore, assessee was able to explain all amounts in SBI Bank account. 10. On other hand, learned DR submitted that as per bank account, assessee has produced bank statement from 1.4.2009 to 31.3.2010 wherein on 31.3.2010, assessee has deposited Rs. 20,44,290/-. cash deposit on 29.3.2010 was Rs. 4 lacs, on 30.3.2010 was Rs.10,26,500/- and on 31.3.2010 Rs.6,08,600/- which comes to Rs. 20,44,029/-. Considering submissions and cash withdrawals, 16 Smt. Sudha Patel ITA No. 390/Ind/2015 learned CIT(A) has given relief of Rs.5,50,000/- on ground that this amount of gift was not acceptable. While confirming addition learned CIT(A) has given credit of this amount. Therefore, out of Rs. 20,45,949/- remaining Rs.14,95,949/- was added to total income of assessee. assessee has relied upon bank statement but bank Manager has given letter wherein he has only shown balance only and not total deposits during year. Therefore, learned CIT(A) has rightly confirmed addition of Rs.14,95,949/-. 11. We have heard both sides. Looking to facts and circumstances of case and going through assessment order and order of learned CIT(A), we find that Assessing Officer has mainly relied upon AIR information that assessee was having deposit of Rs. 37,29,100/-. Therefore, Assessing Officer tried to verify source of this deplosit in bank account. From 17 Smt. Sudha Patel ITA No. 390/Ind/2015 assessment order Assessing Officer was of view that from bank statement furnished by assessee it is evident that assessee has deposited Rs. 37,29,100/- in bank account. Assessing Officer has verified cash book furnished by assessee and Assessing Officer was of view that from cash book assessee has received Rs. 10,75,000/- from recovery of debt and Rs. 5 lacs were received against sale of plot. Therefore, assessee has been able to explain Rs.15,75,000/- and for rest of amount assessee not unable to explain. Therefore, he made addition of Rs.20,45,949/-. learned CIT(A) has confirmed addition of Rs. 5,50,000/- and we have also confirmed same. Therefore, in our opinion, learned CIT(A) has rightly given relief of Rs. 5,50,000/- and we endorse action of learned CIT(A). Therefore, question remains whether assessee has to prove remaining 18 Smt. Sudha Patel ITA No. 390/Ind/2015 amount of Rs. 14,95,949/-. In respect of Rs. 14,95,949/- assessee submitted that this amount has been reflected in cash book and assessee submitted that this amount was withdrawn by assessee and it was redeposited in bank account which is evident from bank statement filed by assessee at page A-1 of paper book. assessee has made total withdrawal of Rs.16,99,585/- and out of this he has redeposited amount in bank which is reflected in cash book. Therefore, in our opinion, assessee is able to explain source. Therefore, no addition is called for. 12. In result, appeal of assessee stands partly allowed. Pronounced in open Court on 22 September, 2016 Sd/- sd/- (O.P. MEENA) (D.T. GARASIA) ACCOUNTANTMEMBER JUDICIAL MEMBER 22 September, 2016 Dn/- 19 Smt. Sudha Patel ITA No. 390/Ind/2015 20 Smt. Sudha Patel ITA No. 390/Ind/2015 21 Sudha Patel v. Income-tax Officer, Vidisha
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