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

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ITA 2097/AHD/2015Status: DisposedITAT Ahmedabad31 January 2020AY 2011-124 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that while the source of Rs. 3,10,000/- towards stamp duty remained unexplained, the remaining amount of cash deposits was partly explainable due to continuous withdrawals and deposits. The presumption by revenue authorities was based on suspicion.

What were the facts?

The assessee challenged the CIT(A)'s decision to sustain additions of Rs. 19 Lakhs on account of cash deposits, alleging an unsatisfactory explanation of their source. The assessee claimed the cash was withdrawn from the bank and later re-deposited.

What were the issues?

Whether the assessee provided a satisfactory explanation for the source of cash deposits, and if not, to what extent the additions made by the AO are sustainable.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI PRADIP KUMAR KEDIA

For Appellant: Shri Kalpesh Doshi, A.R, Shri Umesh Kumar Agarwal, Sr

आदेश/O R D E R

PER PRADIP KUMAR KEDIA - AM:

1.

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.

2.

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.

3. When the matter was called for hearing, the learned AR for the assessee referred to the cash book (page no.20 & 21 of paper book) maintained by the assessee and pointed out that the cash has been withdrawn from the bank by the assessee from time-to- time and thereafter re-deposited in the bank. In the circumstances, the source of cash deposit is fully explainable. It was pointed out that the AO has disbelieved the gap between the withdrawals from the bank and re-deposit in the bank. The AO has not accepted the cash withdrawals prior to the cash deposit to be the proper source of cash deposit mainly on the ground that the cash withdrawals have been used for acquisition of immovable property and for payment of unaccounted stamp duty thereon amounting to Rs.3,10,000/- during the year. It is alleged that the cash withdrawals was used as on-money for investment in immovable property, addition and alteration in the property and other personal expenses and towards payment of stamp duty and therefore could not be ploughed back in the bank at the fag end of the financial year as claimed. The learned AR submitted that the payment for immovable property acquired for a consideration of Rs.63,39,500/- was made [Shri Kishor Bachuram Kapdi vs. ITO] A.Y. 2011-12 - 3 - through cheque and therefore, the applicability of cash in hand cannot be disbelieved.

4.

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.

5.

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.

6.

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/-.

7.

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

This Order pronounced in Open Court on 31/01/2020

Sd/- Sd/- (MADHUMITA ROY) (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 31/01/2020 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।

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