SHRI KISHOR BACHURAM KAPDI,,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-8(4),, AHMEDABAD

The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax (Appeals)-8, Ahmedabad (‘CIT(A)’ in short), dated 05.06.2015 arising in the assessment order dated 26.03.2014 passed by the [Shri Kishor Bachuram Kapdi vs. ITO] A.Y. 2011-12 - 2 - Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2011-12.

As per grounds of appeal, the assessee has challenged the action of the CIT(A) in sustaining the additions of Rs.19 Lakhs towards cash deposits under s.69 of the Act alleging unsatisfactory explanation of source of cash deposits.

The learned DR for the Revenue, on the other hand, submitted that the assessee has failed to explain the source of cash deposit and therefore the onus in this regard was not discharged at all. The learned DR relied upon the order of the CIT(A) and submitted that to avail the source of cash deposit as claimed, the assessee was required to disclose all the facts within his knowledge. The reasons and occasion for large withdrawal were not provided by the assessee and therefore, rotation of funds cannot be inferred by implication.

We have carefully considered the rival submissions and perused the orders of the authorities below. The assessee seeks relief towards cash deposit on the grounds of similar withdrawal of cash from bank in the earlier part of the year. A perusal of the cash summary filed by the assessee shows that assessee had withdrawn money at regular interval mainly in initial part of the year which were re-deposited in the later part of the year.

The reasons for cash withdrawal earlier is not known. The assessee has failed to explain the source of payment of stamp duty and therefore, utilization of cash to the extent of Rs.3,10,000/- remains unexplained. However, the benefit of doubt requires to go in favour of the assessee for the remaining amount in view of the fact that the withdrawals as well as deposits are not only continuous but gap between the withdrawals and deposits cannot also be regarded as quite long. [Shri Kishor Bachuram Kapdi vs. ITO] A.Y. 2011-12 - 4 - The presumption drawn by the Revenue authorities are in the realm of suspicion and surmises. Therefore, whole of the addition cannot be sustained. We therefore allow the appeal of the assessee to the extent of Rs.15,90,000/-.

In the result, appeal of the assessee is partly allowed.