Case Law Details
Chandrakumari Vs ITO (ITAT Chennai)
Introduction: This article discusses the recent ITAT Chennai order in the case of Chandrakumari Vs. ITO. The appeal involves cash deposits made during the demonetization period, and the ITAT partially allows the appeal due to the assessee’s failure to produce documentary evidence for some deposits.
Analysis: The appellant filed an appeal against the order of the ld. Commissioner of Income Tax (Appeals), challenging the addition made under section 69A of the Income Tax Act towards unexplained cash deposits made during the demonetization period. The Assessing Officer treated the cash deposit of ₹25,60,000/- as unexplained since the assessee could not provide documentary evidence for the source of the deposits. The ld. CIT(A) confirmed the addition.
The appellant argued that the deposited amount included earnings from agricultural income, interest income, and regular business income from TV serial story writing. The appellant claimed that the income earned was retained in cash for agricultural operations and purchasing agricultural inputs, among other purposes. The appellant provided evidence for agricultural income and TV serial story writing earnings.
The ITAT considered the submissions and the previous acceptance of similar income sources in earlier assessment years. Based on this, they partially allowed the appeal and directed the Assessing Officer to restrict the disallowance to ₹15,00,000/-.
Conclusion: The ITAT Chennai’s order partially allows the appeal filed by the appellant against the addition made on cash deposits during the demonetization period. The ITAT considered the documentary evidence provided by the assessee for agricultural income and TV serial story writing earnings, leading to a partial reduction in the disallowance amount.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi dated 06.01.2023 relevant to the assessment year 2017-18.
2. Brief facts of the case are that the assessee has filed her return of income for the assessment year 2017-18 on 29.07.2017 admitting total income of ₹.5,54,720/- and the same was processed under section 143(1) of the Income Tax Act, 1961 [“Act” in short]. Thereafter, the case was selected for complete scrutiny. By considering the submissions of the assessee against statutory notices, the Assessing Officer has completed the assessment under section 143(3) of the Act dated 03.12.2019 assessing total income of the assessee at ₹.26,84,000/- by making addition under section 69A of the Act towards unexplained cash deposit of ₹.25,60,000/- during the course of demonetization period. On appeal, the ld. CIT(A) confirmed the addition.
3. On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that besides earning agricultural income and interest income, the assessee has also earned regular business income of TV serial story writing, which was deposited in her bank account not only in current assessment year, but also, various previous years and accepted by the Department in earlier assessment years. Thus, the ld. Counsel for the assessee prayed for deleting the addition made by the Assessing Officer and confirmed by the ld. CIT(A).
4. On the other hand, the ld. DR has submitted that the assessee has not produced any documentary evidence for the source of cash deposited during demonetization period and supported the order passed by the ld. CIT(A).
5. Heard both the sides, perused the materials available on record and gone through the orders of authorities below. On verification of the details furnished by the assessee, the Assessing Officer has noted that the assessee has made cash deposit of ₹.25.6 lakhs during 1011.2016 to 18.11.2016. Since the assessee could not substantiate the source for the above cash deposits with documentary evidence, the Assessing Officer treated the cash deposit of ₹.25,60,000/- as unexplained money under section 69A of the Act, which was confirmed by the ld. CIT(A).
6. The case of the assessee is that the assessee owns agricultural land (punjai land) to the extent of 3.91 hectares and earned agricultural income by carrying out agricultural operations of cultivating mango, coconut, groundnut, paddy, timber, etc. The assessee has also earned income from TV serial story writing since 2014 onwards. The assessee has been regularly filing the returns of income by declaring the above source of incomes, which are duly accepted by the Department in earlier assessment years. In the year under consideration, the assessee has submitted that the income earned by the assessee were retained in cash towards purchase of agricultural inputs such as seeds, fertilizers, pesticides, weedicides, power and irrigation, sale of agricultural produce besides receipt of money for writing story for TV serials and deposited ₹.25.6 lakhs from 10.11.2016 to 02.12.2016. The assessee has no other source other than the above incomes earned by her. It is also an admitted fact that similar agricultural income and other income declared in the assessment years 2015-16 & 2016-17 are not in dispute. Since the assessee has produced copy of patta and crop adangal of agricultural land owned by her to the extent of 3.91 hectares, the agricultural income earned by the assessee are also not in dispute. The department also not disputed the income earned by way of TV serial story writing for which any documentary evidence can be produced. Considering the above facts and circumstances of the case, in the interest of natural justice, the Assessing Officer is directed to restrict the disallowance to the extent of ₹.15.00 lakhs and the balance amount of ₹.7,60,000/- shall be treated as unexplained money under section 69A of the Act.
7. In the result, the appeal filed by the assessee is partly allowed.
Order pronounced on 14th July, 2023 at Chennai.
