SHRI JAI SINGH RAJPUROHIT,PALI vs. DC, CEN, CIR-2, JODHPUR

This appeal filed by the assessee is against the order of Ld. CIT(Appeals), Udaipur-2, vide appeal no. 2/10298/2019-20 dated 27/12/2022 against the assessment order passed U/s 144 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) dated 16.12.2019 passed by ACIT, Central Circle-2, Jodhpur, for Assessment Year 2017- 18.

Brief facts of the case are that assessee derives income from salary, rental and other sources. He also earns income from agriculture. Assessee filed his return of income on 29.03.2018, reporting total income of Rs. 3,70,000/-. In the course of assessment, Ld. AO noted that assessee has deposited cash amounting to Rs. 57,45,000/- including Rs. 10,00,000/-, deposited during the demonetization period. The details of deposit of cash is tabulated as under:

Since no was submission made by the assessee in this respect, Ld. AO proceeded to complete the assessment by making the addition of Rs. 57,45,000/-.

Before us, Ld. Counsel submitted that out of Rs. 10,00,000/-, Rs. 6,00,000/- are recorded in the books of Hotel Pawan International run by Smt. Pawan Kanwar, proprietor who is the wife of the assessee. The bank account in which deposit has taken place is a Joint Account wherein assessee and his wife are account holders. Ld. Counsel submitted in respect of deposit of Rs. 2,00,000/- in State Bank of India, that assessee was having sufficient cash in hand recorded in cash book. Assessee had further received cash from mother and close relatives / family members and withdrawals from the bank. Cumulatively out of all these, deposits of Rs. 2,00,000/- was made in the bank account. In respect of other amount of Rs. 2,00,000/- deposited in the Housing Loan with SBI, it is claimed that said deposit is made out of withdrawal of cash from the bank. The details of source of cash deposits of Rs. 10,00,000/- in bank account during the demonetization period as explained by the assessee is tabulated as under:

Ld. Counsel further asserted that assessee was having opening cash in hand as on 01.04.2016 amounting to Rs. 19,28,492/- which was duly accepted as closing cash in hand as on 31.03.2016 while passing assessment order U/s 143(3) for A.Y. 2016-17. Ld. Counsel also referred to copies of bank statements with Axis Bank and State Bank of India to demonstrate the withdrawal of cash which was available for the deposit. He further submitted that similar issue had cropped up in the case of wife of the assessee, who has also been assessed U/s 143(3) by the Ld. AO and no such addition has been made on this account. Ld. Counsel also referred to an application made U/s 154 of the Act filed before the Ld. AO to rectify the mistake in respect of addition made towards deposit of cash of Rs. 10,00,000/- by substantiating the claim with copy of ledger , cash book and bank statement. The said rectification application is pending for disposal.

Per contra, Ld. Sr. DR submitted that assessee has not furnished the corroborative evidences in the course of assessment. He further submitted that the submissions made of ledger, cash book and the accounts are not subjected to audit and therefore cannot be relied upon. He thus supported the orders of the authorities below.

We have heard the rival contentions and perused the materials on record.

In the result, appeal of the assessee is allowed.