POTHLURI VIJAY KUMAR (HUF),GODAVARIKHANI vs. ITO WARD-4, KARIMNAGAR

The assessee’s instant appeal suffers from three days delay stated to be attributable to the reason(s) beyond his control as per condonation petition/affidavit. No rebuttal has come from the departmental side. The impugned delay is condoned therefore.

It transpires at the outset that the lower appellate discussion affirming the Assessing Officer’s action making Section 69A addition of Rs.8 lakhs; has been passed ex-parte to the following effect: “5.3. I have carefully considered the matter. As stated earlier, the assessee claimed that the cash deposited was out of withdrawals from the personal bank account. In this regards, I have perused the details of such withdrawals from personal bank account. From there, it is seen that total sum of Rs.9.3. Lakh was withdrawn in the month of June, 2016 i.e. a good 100 days before the cash deposit took place. Other withdrawals totaling to Rs.8.75 lakh took place in the month of August and September (before 20.09.2016). Therefore, withdrawal of total sum of more than Rs.18 lakh took place at a time much anterior to demonetization period. It is not understood as to how cash was withdrawn and kept in custody for months before being deposited into bank account. Therefore, in absence of other supporting evidences the claim of assessee lacked in credibility. Moreover, as noted by the AO, the assessee had not given the circumstances under which individual cash possibly got deposited into HUF account. It is not the case of assessee that his personal bank account was not available for re-deposit of cash withdrawn. The assessee also had not given the fate of Rs.8,00,000/- deposited in its account in subsequent years. The AO also noted that there was cash deposit of Rs.21,00,000/- in personal bank account. It is also seen that assessee claimed to have withdrawn Rs.7 lakh from partner's share. No evidences in this regard have been produced. In view of the above, it is not possible to accept the claim that cash deposit of Rs.8,00,000/- was out of the withdrawals from individual bank account of assessee. 5.3.1. In the written submission, the assessee gave insipid arguments not supported by facts. The claim that since the money was deposited in bank account it means that it was recorded in the books and hence addition is not warranted u/s 69A is totally baseless. Bank statement alone is not a book of account as per scheme of Income tax Act. More importantly, in the context of present case, it is to be seen whether the sources of Rs.8,00,000/- is recorded in book of account. The assessee has not shown any evidences showing the source of cash of Rs.8,00,000/-. The assessee simply extracted a sentence from the assessment order and claimed that the Assessing Officer had accepted the fact of money being withdrawn from individual account having got deposited in HUF account. In this regard, the Assessing Officer had never accepted the claim of assessee. Therefore, he had added Rs.8,00,000/- to assessee's income. The sentence of the Assessing Officer was not read in its proper context. A proper understanding of the AO's language would show that the AO was, instead of accepting assessee's explanation, was raising his serious doubt about cash being withdrawn from individual account and subsequently being redeposit in HUF account. Since the assessee had not given any factual and satisfactory explanation, the action of the AO is upheld. Appeal is dismissed. Order is passed u/s 250 of the Act”.

It is noticed during the course of hearing that the instant issue of un-explained amount deposited in bank account requires afresh consideration at the learned CIT(A)’s end since neither any credit has been given to the assessee’s past savings cash in hand nor the latter has been able to reconcile source of the impugned deposits with the earlier withdrawals. I therefore restore the instant issue back to the CIT(A) for his afresh adjudication on merits. The assessee or his authorised representative shall appear before the CIT(A) on or before 31-01-2022 with all the relevant details to be followed by three effective opportunities of hearing.

This assessee’s appeal is treated as allowed for statistical purposes in above terms.