Case Number: ITA 5899/DEL/2019
Appellant: Neetu Nayyar, New Delhi
Respondent: DCIT Circle-20(2), New Delhi
Assessment Year: 2009-10
Order Type: Final Tribunal Order
Date of Order: 2020-08-07
Pronounced On: 2020-08-07
Case Filed On: 2019-07-08
This appeal, filed by the assessee, is directed against the order dated 15th May, 2019 of the CIT(A)-34, New Delhi, relating to the Assessment Year 2009-10. The appellant, Neetu Nayyar, is challenging the reopening of the assessment under section 147 of the Income Tax Act, 1961, and the addition of Rs. 4 lakhs as unexplained receipts under section 68 of the IT Act.
The grounds of appeal raised by the assessee are as follows:
“1. That on the facts and circumstances of the case and the provision of the law, the Ld CIT (A) has failed to appreciate that the impugned order passed by the Ld AO under Section 147 of the Income Tax Act is illegal and bad in law.
2. That on the facts and circumstances of the case and the provisions of law, the Ld CIT (A) has erred in sustaining an addition of Rs. 4,00,000/- on account of unexplained receipts under section 68 of the IT Act.”
Neetu Nayyar filed her return of income on 31st December, 2009, declaring an income of Rs. 2,00,110/-. The case was reopened with directions to verify the source of investment of Rs. 4,25,000/-. The assessee had given a loan of Rs. 7,50,000/- to M/s. R.G. Consultants Pvt. Ltd. during the assessment year 2009-10. A notice under section 148 of the Income Tax Act, 1961 was issued, and the assessee submitted that the original return should be treated as filed in response to this notice. The assessee declared income from salary, house property, and other sources.
The AO noted that prior to issuing a cheque of Rs. 7,50,000/- to M/s. R.G. Consultants Pvt. Ltd., there were credits of Rs. 3,50,000/- and Rs. 4,00,000/- in the assessee’s bank account. The source of Rs. 4,00,000/- received from Federal Bank on 07.10.2008 was not explained, leading the AO to treat this amount as unexplained and add it to the taxable income.
Aggrieved by the AO’s decision, the assessee appealed to the CIT(A), who upheld the addition. The assessee then provided additional evidence, including copies of the passport and residency visa of Shri Babu Jethani, who allegedly provided the loan, and proof of the transaction through Federal Exchange. Despite this, the CIT(A) confirmed the addition, noting that the evidences could not be verified.
The case was heard by the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 5th August, 2020. The Tribunal consisted of Shri Bhavnesh Saini, Judicial Member, and Shri O.P. Kant, Accountant Member. The Tribunal reviewed the facts and evidence, noting the similarities with a previous case involving the assessee’s wife, Smt. Meena Nayyar, where a similar addition was deleted by the ITAT.
In the case of Neetu Nayyar, the Tribunal found that the loan was given to M/s. R.G. Consultants Pvt. Ltd. and funded by a loan from Shri Babu Jethani. The Tribunal noted that sufficient documentary evidence was provided to support the transaction, including the identity and creditworthiness of Shri Babu Jethani. Therefore, the Tribunal concluded that the addition of Rs. 4,00,000/- as unexplained income was unjustified.
In conclusion, the ITAT set aside the orders of the authorities below and deleted the addition of Rs. 4,00,000/-. The Tribunal allowed the appeal filed by Neetu Nayyar, finding that the reopening of the assessment and the addition were not warranted based on the evidence provided.
Order: The appeal is allowed.
Pronounced on: 7th August, 2020
Judicial Member: Bhavnesh Saini
Accountant Member: O.P. Kant
Copy forwarded to:
1. Assessee
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asstt. Registrar, ITAT, New Delhi
Neetu Nayyar vs DCIT Circle-20(2), New Delhi – Unexplained Receipts and Reopening of Assessment
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform