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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
ORDER Per Anikesh Banerjee, J.M.:
The instant appeal of the assessee was filed against the order of ld. Commissioner of Income-tax (appeals), NFAC, Delhi [in brevity of CIT(A)] date of order 19/06/2022 order passed u/s. 250 of the Income Tax Act, 19861 (in brevity the AO) for assessment year 2017-18. The impugned order was emanated from the order of the ld. Income-tax Officer, Ward 2(5), Muktasar (in brevity the AO) order passed u/s.143(3) date of order 18/11/2019.
The brief fact of the case is that during the impugned AY 2017-18, the assessee filed return of income U/s 139 of the Act. In the return of income filed by Smt. Gauri Chhabra vs. ITO the assessee, the total income has been declared at Rs. 9,86,360/- under the head Income from Other Sources. The said return of income was processed, and the case of the assessee was selected for “Limited Scrutiny” on the ground “Large Value cash deposits during demonetisation period as compared to Returned Income”. In the assessment, the ld. AO made additions amounting to Rs. 13,82,000/- u/s 69A of the Act on account of unexplained money deposited in bank account. The details of cash deposit in bank are as follows: -
S. No. Date Amount (In Rs.) 1. 06.12.2016 7,00,000 2. 07.12.2016 5,25,000 3. 19.12.2016 1,57,000 Total 13,82,000 The assessee explained that source of cash is related to withdrawn in earlier years which is placed in tabular form: -
S. No. Date Amount (In Rs.) 1. 26.03.2014 12,00,000 2. 06.04.2015 5,00,000 Total 17,00,000 The assessee challenged the assessment order before the ld. CIT(A). The ld.CIT(A) allowed the relief amount of Rs. 3,00,000/- on account of personal savings& balance amount Rs. 10,82,000/- was confirmed. Being dissatisfied on the appeal order the assessee filed an appeal before us.
The ld. Counsel for assessee (in brief AR) vehemently argued & filed written submission which is kept in record. In argument the AR mentioned that the assessee has deposited the cash in her bank account out of her regular course
Smt. Gauri Chhabra vs. ITO of income. The assessee had submitted the copy of the cash flow statement for AY 2017-18. The copy of the said reply is placed in the APB at page no.20.During clarification of source of cash deposit it is mentioned that the cash withdrawals of Rs. 12,00,000/- and Rs. 5,00,000/- were made by the assessee in the earlier years i.e. on dated 26.03.2014 and 06.04.2015 respectively. The assessee also submitted the undertaking, wherein, it has been stated by the assessee that the cash withdrawal of Rs. 12,00,000/- and Rs. 5,00,000/- has not been utilized by the assessee till the date of deposit in the bank account and further, it was also stated that no such part of cash is used for the purpose of purchase of immovable or movable property, marriage of any member of family etc. The copy of the undertaking is placed in the APB at page no.24.
3.1. The AR further argued that the ld. AO issued another questionnaire wherein, the ld. AO inquired about the previous cash withdrawals of Rs. 12,00,000/- and Rs. 5,00,000/- in FY 2013-14 and FY 2014-15 respectively. The ld. AO also asked about the purpose of such cash withdrawals as made by the assessee. Copy is placed at APB page no.25-26. The assessee filed a detailed reply dated 09.08.2019 against the said notice wherein, it has been stated that she withdrew cash from her account in earlier years only for some personal use and the same was kept in hand and was not later deposited in the bank account. And, during the relevant year, the assessee deposited the said cash in hand in the bank account during the period of demonetization. The copy of the said reply is placed in the APB at page no.27-30. Again, on 11.10.2019, the ld. AO issued another questionnaire u/s 142(1) of the Act, copy placed in the APB at page no.31-32. In response to the said questionnaire, the assessee filed detailed reply dated 23.10.2019 wherein, she has duly justified her income from commodity income as well as the cash deposit made by the assessee out of previous withdrawals made by the assessee. The copy of the reply is annexed APB at page no.33-38.
Smt. Gauri Chhabra vs. ITO 3.2. The AR argued that the assessee earned commodity profit in earlier years. The income was declared before the revenue by filing the return. The cash was accumulated in several years. The copy of the cash flow statement for the period 01.04.2013 to 31.03.2017 was submitted by the assessee before the ld. AO to substantiate her claim of Rs. 14,94,520/- as opening cash in hand as on 01.04.2016. The copy of the same is placed in the APB at page no.43-45. In addition to this, as a proof of earning of commodity income the assessee filed a copy of account in the books of Shri Balaji Comfin Traders for AY 2017-18, wherein, the income of Rs. 9,25,000/- is reflecting. The said copy of account is placed in the APB at page no.46.
3.3. The AR respectfully relied on the order of the Hon’ble High Courts which are as follows:-
� ShivcharanDass vs. Commissioner of Income Tax 126 ITR 263 P&H- HC
“Unexplained investment-Amount disclosed by HUF under Voluntary Disclosure Scheme- Thereafter kept lying in assessee's house with his wife till her death-ITO questioning its source after the same had subsequently been deposited with a bank in the names of assessee's then major daughters-In the absence of any evidence to the effect that the said sum was utilized by the assessee in any other manner, the Department was not justified in unreasonably rejecting a good explanation and adding the amount as income from undisclosed sources Further, the addition, if at all possible, could have been made only in the daughters' hands-There was no provision in 1922 Act analogous to s. 69 of 1961 Act.”
� ITO vs. Shri M Prabhakar in order dated 11.11.2016 (Hyd Bench)
“9. Considered the rival submissions and perused the material facts on record. The assessee has deposited Rs. 34.70 lakhs during this AY and there is sufficient cash available in his possession as per the cash book and Wealth Tax return submitted by the assessee.
Smt. Gauri Chhabra vs. ITO The mute question before us is whether the cash deposited was coming out of the cash available with the assessee, which was kept by him for last two years. It was not brought on record why he has withdrawn so much of money and what made the assessee to keep such huge money in hand. But, on record, submitted by the assessee, we find that he had sufficient money. Even the AO could not bring any proof that the assessee has in fact utilized or applied the cash withdrawn two years back, except making a remark that there is no possibility of keeping such amount by the assessee being a NRI. He has not brought on record, why he cannot keep so much of cash in hand and no contrary findings were given by him against the submissions of assessee. AO has made the addition merely on conjectures/surmises/suspicion and no proper reasons were given why he cannot keep the cash in hand except the remark of being an NRI. In our view, the Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd. (supra) has held that the AO cannot complete the assessment purely on guess and without any reference Sri M. Prabhakar to evidence or any material at all. Also in the case of Umacharan Shaw & Brothers (supra), the Apex Court has held that AO cannot complete the assessment merely on suspicion which cannot take the place of proof in these matters. Respectfully following the ratio laid down by the Hon'ble Supreme Court in the said cases, we hold that the AO made the assessment merely on suspicion and without bringing any cogent material on record to establish that assessee cannot keep the cash in his hand being a NRI. Accordingly, we uphold the order of the CIT(A) in deleting the addition of Rs. 34,70,000/- made by the AO and dismiss the grounds raised by the revenue in this regard.
10. In the result, appeal of the revenue is dismissed.” (Emphasis supplied)
� DCIT vs. Smt Veena Awasthi in order dated 30.11.2018 (ITAT Lucknow)
“6. The ld. D.R. placed heavy reliance on the order of the Assessing Officer and conceded that sufficient cash was available with the assessee for deposit in the bank account. It was only peculiar pattern of behaviour that was in doubt. 7. Ld. A.R. of the assessee per contra placed reliance on the order of ld. CIT(A) and reiterated the submissions as made before the subordinate authorities emphasizing that Smt. Gauri Chhabra vs. ITO entire bank statements and source of cash withdrawal/deposits have been furnished before the Department. Nowhere Assessing Officer has come out with the finding that withdrawal of cash by the assessee was utilized to procure any asset or has been invested elsewhere and that cash deposit in the account was from other sources. Assessing Officer has simply doubted behavioural patter accepting the fact that assessee was having her own cash which has been frequently deposited and withdrawn from her bank account. At threshold, submissions of the ld. A.R. of the assessee, therefore, was that the order of ld. CIT(A) may be upheld and relief granted may be sustained.
We have perused the case record and heard the rival contentions. We find that addition has been made by the Assessing Officer, as is evident from his order, on the ground that he has come to the conclusion that cash deposits were from some other source of income which is not disclosed to the Revenue. Assessing Officer nowhere in his order has brought out any material on record to show that assessee is having any additional source of income other than that disclosed in the return nor Assessing Officer could spell out in his order that cash deposits made by the assessee was from some undisclosed source. All throughout Assessing Officer has raised suspicion on the behavioural pattern of frequent withdrawal and deposits by the assessee. There is no law in the country which prevents citizens to frequently withdraw and deposit his own money. Documentary evidences furnished before the Revenue clearly clarifies that on each occasion at the time of deposit in her bank account, assessee had sufficient availability of cash which is also not disputed by the Revenue. Entire transaction of withdrawals and deposits are duly reflected in the bank account of the assessee and are verifiable from relevant records. Assessing Officer himself admitted that assessee had sufficient cash balance on each occasion at the time of deposit in her bank account on different dates during the assessment year under consideration. We have also examined the order of ld. CIT(A) and we find that his decision is based on facts on record and is supported by adequate reasoning and, therefore, we do not want to interfere with the order of ld. CIT(A) and accordingly we uphold the findings of the ld. CIT(A) sustaining relief granted to the assessee.
In the result, appeal of the Revenue is dismissed.” (Emphasis supplied)
Smt. Gauri Chhabra vs. ITO 4. The ld. Sr. Dr. vehemently argued & relied in order of the revenue authorities. The reliance was placed in the order of the ld. CIT(A) page 10 paragraph 7.2 which is reproduced as below: -
“b) Appellant claims that these Cash deposits made were out of previous cash with details made from OBC on following dates. 26.03.2014 – Rs. 12,00,000/- 06.04.2015 – Rs. 5,00,000/- Appellant stated that cash in hand on 05.12.2016 was Rs. 14,44,471/- as per the cash flow statement out of which Rs. 13,82,000/- was deposited in her bank a/c with OBC. c) Appellant claimed that this cash withdrawal was out of deposits made from Commodity Income. Copy of A/c with M/S Balaji Comfin Traders was filed in support. However, as per this copy of a/c the Transaction in this a/c with M/S Balaji Comfin Traders pertain to a period after the date of cash deposits in the Appellants bank a/c. d) On analysis of ITR's and Bank a/c's of Appellant in earlier AY's the AO noted that Appellant got entry of Rs. 12,00,000/- on 26.03.2014 and withdrew it in cash on same date. On 27.032015 the Appellant received entry of Rs. 6,25,700/- from M/S Shri Krishna Comfin Traders and withdrew cash of Rs. 5,00,000/- on 06-04.2015. Appellant has shown Income from other sources of Rs. 3,26,570/- in AY-2014-15 and Rs. 6,92,280/- in AY-2015-16. AO has proved that no Margin Money payment or Initial Investment was made by Appellant to any broker or M/S Balaji Comfin from whom Commodity Trading was shown. Thus, theAO has concluded that Appellant purchased entries from brokers by paying them in cash. Once the entry amount was deposited in Appellant's bank a/c then same was withdrawn in cash on the same date or after a few days. In view of these facts the source of deposits made in Appellants bank a/c vide entries on 26.03.2014 (Rs. 12,00,000/-) and27.03.2015 (Rs.6,25,700/-) were held to be not genuine.”
We heard the rival submission & perused the documents available on record.
Smt. Gauri Chhabra vs. ITO It is submitted that the cash deposit in bank have been made by the assessee out of the previously withdrawn cash. The said facts have been duly explained by the assessee even before revenue authorities. The assessee had withdrawn the cash from her bank account maintained with Oriental Bank of Commerce account no. 02512010054060 on dated 26.03.2014 &06.04.2015. The cash flow statement was submitted from 01.04.2013 to 31.03.2017 by the assessee before the the ld. AO. Both the revenue authorities have not found any specific lacuna in the cash flow statement of assessee. We respectfully relied on the order of Hon’ble Jurisdictional High Court, Shivcharan Dass vs. CIT, supra&orders of ITAT, ITO vs. Shri M Prabhakar, supraandDCIT vs. Smt Veena Awasthi, supra. The ld. Sr. Dr. has not filed any contrary judgment against the submission of assessee. The cash trail of the assessee undoubtedly stated that the sufficient cash balance was with the assessee to explain the deposit of cash in bank account. Accordingly, the order of the ld. CIT(A) is dismissed.
In the result, appeal of the assessee in is allowed.
Order pronounced in the open court on 17.02.2023