The case number ITA 1811/DEL/2022 involves the appellant, Ramesh Rani Chatwal, a resident of Ghaziabad, Uttar Pradesh, against the respondent, the Income Tax Officer (ITO), Ward 2(2)(2), Ghaziabad. The appeal pertains to the assessment year 2017-2018, with the case being filed on August 10, 2022. The final tribunal order was dated June 15, 2023, and was pronounced on the same date.
The appellant, Ramesh Rani Chatwal, contested the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated June 13, 2022. The primary issue in this case was the addition of Rs. 11,88,000 as income from unexplained investments.
The hearing for this appeal took place on June 12, 2023. The appellant was not represented at the hearing, while the respondent was represented by Shri Om Prakash, Senior Departmental Representative (DR). Despite several opportunities, no one attended the proceedings on behalf of the appellant.
The facts of the case reveal that the Assessing Officer (AO) had received information regarding cash deposits of Rs. 11,88,000 by the assessee. The AO issued a notice to the assessee to explain the source of these cash deposits. However, the statutory notices issued remained uncomplied with, leading the AO to make an addition of Rs. 11,88,000, assessing the income of the assessee at Rs. 11,88,000 under section 144 of the Income Tax Act, 1961.
Aggrieved by this decision, the assessee appealed to the CIT(A), who upheld the AO’s addition. Consequently, the assessee brought the appeal to the Income Tax Appellate Tribunal (ITAT).
The appellant, an elderly lady above 70 years of age, argued that the cash deposits were from her savings and those of her late husband, accumulated over the years. The appellant contended that the deposits were made to pay off a loan against property, and the savings were necessary to avoid late payment charges and negative credit impact.
The appellant also cited a similar case, Leela Devi vs ITO, where the ITAT Delhi ruled that cash saved by housewives over the years could not be deemed income assessable under Income Tax during the demonetization period.
Upon reviewing the case, the tribunal found that the lower authorities were not justified in making the addition without proper verification of the facts. The CIT(A) had noted that the appellant filed a return of income under section 139 of the Act on November 7, 2019, declaring an income of Rs. 5,55,980. The tribunal held that the past savings of the appellant could not be ruled out and that the authorities should have verified these facts more thoroughly.
Therefore, the tribunal directed the AO to delete the addition of Rs. 11,88,000, allowing the grounds raised by the appellant. The appeal of the assessee was allowed.
The tribunal’s final judgment, pronounced on June 15, 2023, directed the deletion of the addition of Rs. 11,88,000, considering the appellant’s explanation and the lack of proper verification by the lower authorities. This judgment provides significant relief to the appellant, acknowledging the validity of her savings and the circumstances under which the deposits were made.
Order pronounced in the open court on June 15, 2023.
(KUL BHARAT)
JUDICIAL MEMBER
Note: The above content is a summarized version of the case and judgment, provided for informational purposes only. For full details, refer to the official court documents and records.
Ramesh Rani Chatwal vs ITO: Unexplained Investment Case for Assessment Year 2017-2018
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