Case Law Details
Smt. Sarabjit Kaur Vs ITO (ITAT Chandigarh)
In both the years under consideration, the assessee has declared income from tuition fee in her return of income and in both the years there were cash deposits in the bank account being maintained by the assessee. The Assessing officer added the cash deposits to the income of the assessee u/s 69 of the Act on the reasoning that the assessee could not explain the source of deposits. The assessee’s contention regarding the tuition fee having been received was also disbelieved and the same was also added to the income of the assessee u/s 69A as ‘income from undisclosed sources’. In both the years, these additions were made subsequent to the reopening of the case based on information received from Investigation Wing of the Department which, in turn, had received the information from the Enforcement Directorate. It was the assessee’s contention before the Assessing officer as well as the Ld. CIT(A) that the source of cash deposits was the balance of cash brought forward from earlier assessment years and that the same was duly reflected in the balance sheet which had been filed by the assessee along return of income. The assessee has filed paper books for both the years under consideration and we note that for assessment year 2010-11, the assessee had filed copy of the balance sheet for the years ending 31.3.2010 and 31.3.2011. The balance sheet as at 31.03.2010 shows the closing cash balance in hand amounting to Rs. 12,61,473.32 and during this year i.e. 2011-12, the assessee had made deposits in bank account amounting to Rs. 13,40,000/-. During this year, the assessee had also made cash withdrawals of Rs. 3 lacs of which the Assessing officer had given due credit and had proceeded to add the remaining amount of Rs. 10,40,000/- only to the income of the assessee. It is not in doubt that these balance sheets were filed before the Assessing officer during the course of assessment proceedings as well as the before the Ld. CIT(A) but the same were not considered by them while deciding on the merits of the case. Apparently, the explanation given by the assessee has been rejected without assigning any reason. To our mind, if the assessee’s explanation of having the opening cash in hand was to be disbelieved, there should have been cogent reasoning behind the same. Therefore, we accept the assessee’s contention that as on 3 1.3.2010 the assessee had a closing balance of cash in hand of Rs. 12,61,473.32 which ought to have been considered for the purposes of explaining the source of cash deposits in the bank accounts.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
ITA No. 1144/Chd/2019 is assessee’s appeal challenging the order dated 01.05.2019 passed by the. Ld. Commissioner of Income Tax-3, Ludhiana [hereinafter referred to as ‘CIT(A)’] for assessment year 2011- 12. ITA No. 1145/Chd/2019 is also assessee’s appeal and pertains to assessment year 2013-14 and is against the order dated 01.05.2019 passed by the Ld. CIT(A), Ludhiana. Since both the appeals had identical issues, they were heard together and they are being disposed off through this common order for the sake of convenience.
2.0 Brief facts of the case in ITA No. 1144/Chd/2019 for assessment year 2011-12 are that during the year, assessee earned income from tuition as well as rent and interest from bank and other parties. For the said assessment year, the return of income was filed declaring an income of Rs. 2,44,780/-. An information was received from the Investigation Wing of the Income Tax Department vide letter 15.3.20 17, who in turn had received information from the Enforcement Directorate that the assessee had deposited cash of Rs. 8,00,000/- in her bank account maintained with Axis Bank, Jagraon and another Rs. 5,40,000/- in her bank account with HDFC bank, thus, totaling to a deposit of Rs. 13,40,000/-. In view of this information, notice u/s 148 of the Income Tax Act, 1961 (hereinafter called ‘the Act’) was issued and in response to the said notice the assessee stated that the return originally filed may be treated as the return filed in response to the notice u/s 148 of the Act.
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