When confirmation and affidavit admitting payments to assesse were filed then without examining persons giving affidavit and confirmation, the claim of the assessee cannot be brushed aside – ITAT
In a recent judgment, ITAT has deleted addition made for cash deposit in bank account holding that when confirmation and affidavit admitting payments to assesse were filed then without examining persons giving affidavit and confirmation, the claim of the assessee cannot be brushed aside – ITAT
ABCAUS Case Law Citation:
ABCAUS 3827 (2023) (12) ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming action of the Assessing Officer (AO) in passing order u/s 144/147(3) of the Income Tax Act, 1961 (the Act) treating cash deposited in bank account as unexplained cash deposits.
The assessee was an individual and has not filed any return of income u/s 139 of the Act. The AO received information about deposit of large amount of cash in Saving Bank Account during the year under consideration.
Accordingly, the AO issued a notice u/s 148. There was no response on behalf of the assessee to the notice issued u/s 148 and also notice issued u/s 142(1) of the Act. The AO then issued show cause notice to the assessee to explain the source of cash deposit in the saving bank account but there was no reply on behalf of the assessee.
Accordingly the AO passed assessment order u/s 144 r.w. section 147 and thereby determined the total income of the assessee.
The assessee challenged the action of the AO before the CIT(A) but could not succeed.
Before the Tribunal the assessee submitted that she was a retired employee having pension income. It was further submitted that the assessee was having saving bank account where monthly pension was credited. The assessee shown source of deposit as withdrawn from the pension account as well as cash received from father in law (relative) for onward transfer to son of assessee residing in USA.
It was contended that the AO did not give proper opportunity to explain source of deposit made in the bank account. The assesse filed additional evidence vide before the Ld. CIT(A) which was forwarded along with written submissions of the assessee to the AO of verification and his comments. The AO submitted the remand report and
objected to the claim of the assessee and source of deposit in the bank account after considering remand report of the AO the CIT(A) had confirmed the addition made by the AO.
The assessee referred to the bank account statement and submitted that the she had made various withdrawals through ATM during the previous year relevant to the assessment year under consideration amounting to almost the same amount and further received amount from her father in law. Thus, the total availability of the cash with the assessee was much more than deposited in the bank.
The Tribunal observed that he AO as well as the CIT(A) had rejected the evidence filed by the assessee on the ground that the confirmation and affidavits filed by the assessee regarding the receipt from relative was without any supporting evidence and not sufficient to justify the source of cash deposit in the bank account.
The Tribunal noted that the evidence produced by the assessee was not examined either by the AO or by the CIT(A) to ascertain the correctness of the same from the persons who have given affidavit and confirmation. Further even the credit of the assesee’s pension income as well as received by the assessee from his son was also not given by the Assessing Officer (AO) as well as CIT(A).
The Tribunal further noted that the assessee had also filed the bank account statement of her father in law showing that against the amount he gave to the assessee an identical amount was received as remittance by the son of the assessee.
The Tribunal opined that once the additional evidence was forwarded to the AO for verification and his comments then the AO ought to have examined the said evidence as well as the persons who have issued the confirmation and filed affidavit. The Tribunal further observed that when the confirmation and affidavit admitting the payment to the assesse were filed then without examining persons of giving affidavit and confirmation the claim of the assessee cannot be brushed aside.
The Tribunal also observed that the AO as well as the CIT(A) had not disputed withdrawal of the amount by the assessee from pension Account however, the source of the said amount for deposit in the other bank account was denied on the ground that these amounts withdrawn with small small quantum and for personal use of the assessee and not for accumulating the money for deposit in the bank account. The Tribunal opined that all these reasons were not based on the verification of the fact and analyzing the details as how the assessee was meeting his day to day household expenditure and could have save an amounts as a source of deposit on subsequent dates.
Accordingly, the Tribunal deleted the addition made by the AO and confirmed by the CIT(A).
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