Addition for unexplained cash deleted as assessee consistently declared tuition income and paid tax over 20 -25 years
ABCAUS Case Law Citation:
ABCAUS 3767 (2023) (06) ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming addition made by the Assessing Officer (AO) on account of cash deposited in bank and cash of Rs. 6 lakhs paid for stamp duty for purchase of house treating the same as unexplained cash credit.
Before the ITAT, the assessee submitted that she was earning cash income from tuition since very long time and has been filing her return of income for 20 to 25 years showing tuition income apart from other incomes. It was submitted that the assessee had deposited cash out of cash in hand from cash withdrawals made from other bank account.
It was submitted that when the withdrawals were much higher than the amount of cash deposit to the bank then the balance amount cannot be treated as cash deposited out of undisclosed source.
Regarding the addition for deposit of cash in bank the ITAT observed that the assessee has withdrawn large amount of cash and the amount of cash deposit was much lesser than the amount of cash withdrawals by the assessee during the same financial period.
The Tribunal opined that the AO was not correct in considering the available cash in view of the above and directed the addition to be deleted.
With regard to the cash payment towards stamp duty the assessee explained that the said amount was saved by the assessee right from her marriage till date purchase of property which cannot be denied as the assessee got married much earlier from the date of purchase of property.
The Department opposed the assessee stating that neither during the assessment nor even during the appellate proceedings the assessee could not file plausible explanation and sufficient documentary evidence with regard to the cash payment for stamp duty payment.
The Tribunal observed that when the assessee had source of income such as tuition income which was converting to in cash since 20 to 25 years and she was continuously filing her return of income with the department. Then the amount of Rs. 6 lakhs cannot be doubted or discarded only on the ground that the assessee failed to furnish either documentary proof of satisfactory explanation regarding payment towards stamp duty.
The Tribunal opined that this is well known fact to understand the fabric of the society and habits of Indian home maker women and issue has to be seen from the angle of normal women who has normal sources of income and has spent big part of her life’s earning to financially strengthen her family from doing tuition work and again utilizing the tuition income for giving loans to the relatives for earning interest income.
The Tribunal noted that it was not the case of the AO that the assessee had not paid any tax or has not filed return of income
The Tribunal held that the explanation submitted by the assessee was a plausible explanation. It was further held that payment of stamp duty in cash cannot be doubted in view of the conduct of assessee in the capacity of a consistent tax payer since 20 to 25 years and thus addition cannot be held as sustainable. Therefore, the AO was directed to delete the entire addition.
Accordingly, the appeal was allowed.
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