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Case Law Details

Case Name : Puneet Utreja Vs ITO (ITAT Delhi)
Appeal Number : ITA No. 481/Del/2021
Date of Judgement/Order : 02/08/2024
Related Assessment Year : 2017-18
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Puneet Utreja Vs ITO (ITAT Delhi)

In the case of Puneet Utreja vs. ITO, ITAT Delhi has overturned a decision by the CIT(A) and Assessing Officer (AO), directing the deletion of an addition made to the assessee’s income for the assessment year 2017-18. The appeal was filed against an order where the AO had added INR 16,20,000 deposited during the demonetization period to the assessee’s income, claiming it as unexplained. The AO’s decision was based on the assumption that the source of cash deposits was unclear, despite the assessee’s explanation that the cash was from term deposit maturities. ITAT Delhi found that the lower authorities failed to adequately address the assessee’s explanation or provide evidence to dispute it. The Tribunal noted that the cash withdrawals and deposits matched, supporting the assessee’s claim. Citing previous rulings, ITAT Delhi ruled that the addition was based on suspicion rather than concrete evidence and directed the AO to remove the addition. The appeal was allowed, marking a significant relief for the assessee.

FULL TEXT OF THE ORDER OF ITAT DELHI

The present appeal filed by the assessee is directed against the order passed by Ld.CIT(A), National Faceless Appeal Centre (“NFAC”), Delhi dated 05.03.2021 for the assessment year 2017-18.

2. The assessee has raised following grounds of appeal:-

1. “The Ld. CIT(A) and Ld. AO has grossly erred in ignoring that cash of 16,20,000/- deposited during demonetization was  tracing back to cash withdrawals of Rs. 16,20,000/- made from the same bank account during past months.

2. The CIT(A) and Ld. AO has grossly erred in segregating part of the cash deposit of Rs. 8,20,000/- as explained and part of Rs. 8,00,000/- as unexplained whereas it is a trite law that two view cannot be drawn in respect of money found from single source.

3. The CIT(A) and Ld. AO has grossly erred in not placing any material to believe that source of cash deposit was unexplained and made addition based on surmises and conjectures.

4. The Ld. CIT(A) and Ld. AO has grossly erred in invoking provision of Section 69A w.s. 115BBE of the Act whereas facts of the  case reveals that no addition is warranted u/s 69A r.w.s. 115BBE.

5. The above grounds are without prejudice to each other.

6. The appellant craves leave to add, alter, modify and withdraw any grounds of appeal before or during the appellate ”

3. Facts giving rise to the present appeal are  that  the  case  of the  assessee was selected for scrutiny assessment for the reason cash deposited in the bank account during demonetization period. The Assessing Officer (“AO”) therefore, issued a notice u/s 143(2) of the Income Tax Act, 1961  (“the  Act”)  to  the The assessee is an individual and disclosed income from salary and income from other sources during the year under consideration.   The AO noted that during the demonetization  period,  the  assessee  had  deposited  a  sum  of INR 16,20,000/-  in  his  bank  Account.  Accordingly,  the  assessee  was  called upon to explain the cash deposited by the assessee. The explanation given by the assessee was not found  acceptable  by  the  Assessing  Authority.  Therefore, the Assessing Authority made addition of the entire cash deposited in the bank account and assessed the income of the assessee at INR 19,74,320/-.

4. Aggrieved against this, the assessee preferred  appeal  before  CIT(A), who after considering the submissions,  partly  allowed  the  appeal  of  the assessee.

5. Aggrieved against the order of Ld. CIT(A), the assessee is in appeal before this Tribunal.

6. Apropos to the grounds of appeal, Counsel for the assessee vehemently argued that the authorities below failed to appreciate the facts in right perspective. The assessee offered his explanation about the cash deposited in bank account. It was pointed out that the cash was withdrawn and deposited in bank account. Ld. Counsel for  the  assessee  drew  my attention to the bank account statement filed in the Paper Book. It was further stated that the amount was out of the maturity of term deposits.  Ld. Counsel for the assessee further submitted that the lower authorities have not doubted the cash deposits in bank account. On the contrary, the additions have been made purely on the basis of suspicion,  which  cannot  be  sustained. Ld. Counsel for the assessee placed reliance on the decision of the Division Bench of the Tribunal in the case of Smt. Perminder Kaur Matharoo vs ITO in ITA No.840/Del/2021  [Assessment  Year  2017-18]  vide order dated  15.11.2022.

7. On the other hand, Sr. DR for the Revenue opposed these submissions and supported the orders of the authorities below. He submitted that the reason for withdrawal of amount is contradictory.

8. I have heard Authorized Representatives of  the  parties  and  perused the material available on record and gone through the orders of the authorities below.   I  find that the lower authorities have not rebutted the  explanation made by the assessee that the amount related to the maturity of term deposit and redemption of the same.  It  is  seen  from  the  bank  statement  of  the  assessee that there are cash deposits and also cash withdrawals. The cash withdrawals are sufficient to prove that the cash was in the hands of the assessee.

Therefore, without bringing any evidence, suggesting that the cash so withdrawn by the assessee was already utilized in another object. I therefore, direct the AO to delete the impugned addition. Grounds raised by the assessee are accordingly, allowed.

9. In the result, the appeal of the assessee is allowed.

Order pronounced in the open Court on 02nd August, 2024.

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