2024 (4) TMI 1116 - AT - Income Tax

Unexplained money u/s 69A - deposits in bank account during the demonetization period - joint bank account of husband wife - Family settlement - assessee and his wife both are Senior Citizen, Retired Govt. Employee and pensioner and filed the cash flow statements of last five years - HELD THAT - Assessee has filed the day wise cash withdrawals and deposits. The lower authorities have only doubted the cash flow statements but could not disproved with any contrary evidences about the withdrawal of cash and its source. The assessee has also filed a family settlement of her wife family, where she got Rs. 3,61,000/- which is also available with the assessee and the lower authorities has discarded or disbelieved without examining and without bringing any adverse evidence. The assessee has also filed the affidavit of his wife, wherein she clearly stated that the bank accounts were jointly owned and she had deposited the cash of Rs. 15,59,000/- in these bank accounts, this affidavit has also been remained uncontroverted. It is settled law that the contents of an affidavit should be read correct and full unless not controverted Considering the reconciliation and cash flow statement filed by the assessee along with family settlement deed and affidavit of assessee s wife, wherein she owned responded of having deposited of cash out of her owned source and saving., Therefore, without controverting the fact stated of affidavit by the wife of the assessee, the addition made by the lower authorities even for an amount of Rs. 12,87,100/-is also not sustainable in the hands of the assessee and therefore, the same is directed to be deleted. Ground raised by the assessee is allowed.

Summary

Issues Involved:
1. Validity of the order u/s 143(3) and related proceedings.
2. Addition of Rs. 12,87,100/- u/s 69A as unexplained money.
3. Invocation of provisions of Sec. 115BBE for taxing income at a higher rate.
4. Charging of interest u/s 234A, B, and C.

Summary:

1. Validity of the Order u/s 143(3) and Related Proceedings:
The assessee challenged the legality of the order u/s 143(3) dated 17.12.2019, arguing that the proceedings were barred by limitation and without jurisdiction. However, these grounds were not specifically adjudicated as the primary focus was on the substantive additions made by the AO.

2. Addition of Rs. 12,87,100/- u/s 69A as Unexplained Money:
The AO noted that the assessee deposited Rs. 18,29,500/- during the demonetization period. The assessee claimed the sources were from savings since A.Y. 2012-13 and his wife's savings. The AO accepted Rs. 2,20,000/- as explained and treated Rs. 16,09,500/- as unexplained u/s 69A. The CIT(A) reduced the addition to Rs. 12,87,100/- after considering additional explanations and partial acceptance of the cash flow statements. The Tribunal, considering the affidavit of the assessee's wife and the absence of contrary evidence, directed the deletion of the entire addition of Rs. 12,87,100/-.

3. Invocation of Provisions of Sec. 115BBE:
The assessee argued that invoking Sec. 115BBE for taxing income at a higher rate was erroneous and without issuing a show cause notice. Since the primary addition was deleted, this ground became consequential and was not separately adjudicated.

4. Charging of Interest u/s 234A, B, and C:
The assessee contended that the interest charged u/s 234A, B, and C was contrary to the provisions of law. As the primary addition was deleted, this ground was also consequential and not separately adjudicated.

Conclusion:
The Tribunal allowed the appeal of the assessee, directing the deletion of the addition of Rs. 12,87,100/- and not requiring separate adjudication on the consequential grounds. The order was pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963.