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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK ‘SMC’ BENCH, CUTTACK , CUTTACK BEFORE BEFORE SHRI GEORGE MATHAN, JUDICIAL JUDICIAL MEMBER Assessment Year : 2017-18 Shree Shree Cuttack Cuttack Jain Jain Vs. ITO, Exemption, Cuttack ITO, Exemption, Cuttack Swetambar Swetambar Murtipujak Murtipujak Sangha, Kazi Bazar, Cuttack-753001 753001 PAN/GIR No. PAN/GIR No.AACTS 3797 C (Appellant (Appellant) .. ( Respondent Respondent) Assessee by : Shri Mohit Sheth, Adv Mohit Sheth, Adv Revenue by : Shri S.C.Mohanty, Sr DR S.C.Mohanty, Sr DR Date of Hearing : 26/04 4/2023 Date of Pronouncement : 26/0 /04/2023 O R D E R
This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi , NFAC, Delhi dated 30.6.2022 in Appeal No.ITBA/NFAC/s/250/2022 ITBA/NFAC/s/250/2022- 23/1043680455(1) 23/1043680455(1) for the assessment year 2017-18.
Shri Mohit Sheth, ld AR appeared for the assessee and Shri Mohit Sheth, ld AR appeared for the assessee and Shri Mohit Sheth, ld AR appeared for the assessee and Shri S.C.Moanty, ld Sr DR appeared for the revenue. S.C.Moanty, ld Sr DR appeared for the revenue.
It was submitted by ld AR that the assessee is a It was submitted by ld AR that the assessee is a It was submitted by ld AR that the assessee is a Jain temple. It was the submission that the assessee does not have registration u/s.12A of the the submission that the assessee does not have registration u/s.12A of the the submission that the assessee does not have registration u/s.12A of the Act. The assessee has been filing its return of income from the assessment he assessee has been filing its return of income from the assessment he assessee has been filing its return of income from the assessment
P a g e 1 | 6 year 2016-17. It was the submission that during the demonetization period, the assessee temple had deposited Rs.46,50,000/- out of its cash in hand in the bank. Ld AR has placed before me the copy of the cash book for the period 1.4.2016 to 31.3.2017. Ld AR submitted that on 23.11.2016, there is an entry of cash deposit of Rs.46,50,000/-. It was the submission that the Assessing Officer had treated the cash deposit in the bank as the unexplained income of the assessee. It was the submission that the opening cash balance as on 1.4.2016 was Rs.54,62,363/-. Ld AR further drew my attention to the cash book to submit that as on 23.11.2016, there was cash balance of Rs.49,79,711/- and out of said amount of cash availability, the assessee had deposited Rs.46,50,000/-. It was the submission that the cash book has been produced before the Assessing Officer and this cash book has not been disturbed by the Assessing Officer. The books of account produced before the Assessing Officer has also not been disturbed nor rejected. Ld AR submitted that as the cash book has not been disturbed and as the assessee has adequate opening cash balance as on the beginning of the relevant assessment year and also as on 1.11.2016 to make the cash deposit in the bank account, the addition cannot be made as unexplained income of the assessee. He relied upon the decision of the Co-ordinate Bench of Delhi Tribunal in the case of Perminder Kaur Matharoo vs ITO in order dated 15.11.2022, wherein, it has been held that once the cash flow statement is not P a g e 2 | 6 controverted by the Assessing Officer as well as the ld CIT(A) and when it was specifically submitted that the same is based on the entries made in the cash book, then the source of cash deposit in the bank account cannot be discarded by the authorities below. He also relied upon the decision of the Co-ordinate Bench of Surat Tribunal in the case of Jinesh Kamal Jain vs ITO in order dated 13.3.2023, wherein also on similar findings, the addition as been deleted.
In reply, ld Sr DR submitted that the issue before the Tribunal is an issue of deemed income which is the opinion of the Assessing Officer and ld CIT(A) that is being challenged. It was the submission that as per the return of income filed by the assessee, the total Hundi collection for the year was Rs.21,93,803/- and the total Hundi collection for the period after the deposit of cash in the bank account was Rs.6,05,000/-. It was the submission that thus, the assessee at best could have only about Rs.15-16 lakhs from Hundi collection to explain the cash deposit. It was the further submission that the assessee has given different submissions before the Assessing Officer. Ld Sr DR drew my attention to page 2 of the assessment order to submit that in the first paragraph, the Assessing Officer has recorded that the assessee has mentioned that the receipt of cash is from third parties (example loans received in cash, loan repayments received in cash, receipt of gift in cash, other receipts in cash as per the Responsible Data of online responses filed after demonetization). To this, ld AR
P a g e 3 | 6 submitted that such submission has never been given by the assessee. Ld Sr DR further drew my attention to second paragraph of the assessment order, wherein, the assessee has mentioned that cash deposit of Rs.46,50,000/- represents the Hundi collections before and during the period. Ld Sr DR further drew my attention to the order of the ld CIT(A) at page 8 para 7.2 to submit that the ld CIT(A) had called for the returns of income for periods two years prior to the year of demonetization and two years subsequent to the same and the assessee has only produced the returns for the assessment years 2016-17 & 2017-18, which were filed simultaneously. It was the submission that the circumstances under which the cash has been deposited should be considered and the addition as made by the AO is liable to be upheld.
I have considered the rival submissions. A perusal of the balance sheet of the assessee for the relevant assessment year clearly shows that there are no loans and advances given or taken. A perusal of the cash book of the assessee shows that the assessee has no other sources of income other than Hundi collection. Thus, clearly, the assessee derives its income only from Hundi collection and interest from bank. The revenue has not been able to show that the assessee has any other source of income. The closing balance as per the cash book as on 31.3.2016 tallies with the opening balance as on 1.4.2016 at Rs.54,62,363. Admittedly, the assessee has opening cash balance which far exceeded the amount which has been P a g e 4 | 6 deposited in the bank account. The opening cash balance as on 1.11.2016 i.e. the date immediately preceding the date of cash deposit shows that the assessee has Rs.49,79,711 in cash. Admittedly, this also is far in excess of cash deposit in the bank account. A perusal of the income and expenditure account for the period 1.4.2016 to 31.3.2017 shows a loss of Rs.14,105/- and for the assessment year 2016-17 after considering the donation of Rs.18,87,266/-, there is loss of Rs.12,644/-. Once for the assessment year 2016-17, the return has been accepted with cash balance of Rs.54,62,363 and the cash book for the assessment year 2017-18 has not been disturbed, then the cash deposited out of such cash availability as mentioned in the cash book cannot be treated as unexplained income of the assessee. Even otherwise, what is to be considered and -clearly understood is that when preparing the income and expenditure account, receipts of the assessee has been fully considered in preparing the income and expenditure account. Consequently, Rs.46,50,000/- which has been deposited in the bank account has also been considered by the assessee when preparing the income and expenditure account for the relevant assessment year. When the amount has already been considered when preparing its return of income for the relevant assessment year, to treat the cash deposit in the bank as unexplained income of the assessee is nothing but double addition, which is not also permissible. In these circumstances, on account of both the above mentioned reasons, it is held that the addition as made by the P a g e 5 | 6 AO and confirmed by the ld CIT(A) is unsustainable and consequently, same stands deleted.
In the result, appeal of the assessee stands allowed.
Order dictated and pronounced in the open court on 26/04/2023.