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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. C. M. Garg
The present appeal has been filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi dated 30.09.2021.
Ground No. 1 & 3 are general in nature. Remaining effective grounds read as under: 2. (i)On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming an addition of Rs. 7,30,000/- on account of cash deposits in bank accounts rejecting the explanations and evidences filed by the assessee.
(ii) That the above said addition has been confirmed rejecting arbitrarily the working given by the assessee.
(iii) That the above said addition has been made by gross misinterpretation of facts and figures provided by the assessee before the Id. CIT(A).
On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in 2 Satish Kumar confirming the action of the AO in levying tax by invoking the provisions of section 115BBE of the Act despite the fact that the provisions of the said section having came into force w.e.f. 01.04.2017 same cannot be applied in the relevant assessment year considering the same as having retrospective effect.”
Apropos above grounds, the ld. Authorized Representative (AR) submitted that the ld. CIT(A) has erred both on facts and in law in confirming the addition of Rs.7,30,000/- on account of cash deposits in the bank account rejecting the explanation and evidences filed by the assessee.
4. The ld. Counsel submitted that the said addition has been confirmed by ld. CIT(A) on incorrect interpretation of facts and figures provided by the assessee before the authorities below. The ld. Counsel submitted that the First Appellate Authority has also erred in confirming the addition on account of cash deposits in bank account by rejecting the case laws relied by the assessee and without reflecting any case laws to support his findings. The ld. Counsel also submitted that the authorities below have also erred in invoking the provisions of Section 115BBE of the Act. Despite the fact that the provision of said Section having came into force w.e.f. 01.04.2017 and the same cannot be applied retrospectively in A.Y. 2017-18. The ld. Counsel submitted that in para 6.7, the ld. CIT(A) wrongly observed that it is highly unlikely that someone keeps huge cash for so long when the appellant himself was a Senior Manager in the bank there is no logic to keep huge amount idle for 27 months.
3 Satish Kumar 5. The ld. AR also pointed out that in para 6.8, the ld. CIT(A) also wrongly observed that if there were bank withdrawals/cash withdrawals by any other member of family to meet routine expenses then the assessee was not above to prove such fact. The ld. AR submitted that the assessee is having two sons and two daughters-in-law all are working and earning. Therefore, even in an normal routine, the earning of family members living jointly would certainly contribute to meet routine expenses of family as well as the extraordinary and special expenses on special occasions and festivals.
Placing reliance on the order of Co-ordinate Bench of ITAT Cochin Bench in the case of Shri Mathew Philip Vs. ITO dated 29.11.2019 in the ld. Counsel submitted that merely because the cash withdrawn from bank was kept by the assessee and deposited after laps of sometimes cannot be doubted especially when neither the Assessing Officer nor the ld. CIT(A) brought on record any fact that the amount withdrawn by the assessee was utilized for other purposes or deposited in any other bank and the impugned cash amount deposited is assessee’s unaccounted or unexplained income.
Replying to the above, the ld. DR strongly supported the orders off the authorities below and submitted that the ld. CIT(A) right in holding that a person like assessee who was bank Manager, in ordinary course, would not keep huge cash amount idle for 27 months. Therefore, grounds of assessee may kindly be dismissed. He also submitted that provisions of Section 115BBE are applicable from 01.04.2017. Therefore, the 4 Satish Kumar AO was right and applying the same to the impugned amount of unexplained investment.
On careful consideration and rival submissions, first of all I may point out that neither the assessee nor the ld. CIT(A) has disputed that the assessee withdrew amount, which was higher than the impugned amount of Rs.7,30,000/- from his bank account. However, in the assessment as well as first appellate order, I observe that the main grievance of authorities below is that the cash deposit amounting to Rs.7,30,000/- out of total cash deposit of Rs.10,20,000/- made in the savings bank account of the assessee are unexplained and thus, the same was rightly added to the income of the assessee as unexplained money u/s 69A of the Act. At this juncture, I may point out that the Co-ordinate Bench of Tribunal in the case of Shri Mathew Philip Vs. ITO (supra) in apra 11.1 held as follows:
“11.1 The assessee explained that during the assessment year 2012-13, the assessee had an ailment of cancer and he could not attend to business and financial matters and kept the cash withdrawn from Bank on 31/12/2013 for medical treatment and other expenses and deposited the amount in Bank only on 26/09/2014. In support of his claim, the assessee has produced discharge summary dated 06/11/2013 from Lourde Hospital, Ernakulam before AO. He has also produced CT Scan report dated 11/07/2013 which is not disputed by the lower authorities. The Assessing Officer has not accepted the contention of the assessee that he has kept the cash idly in his hands on the reason that he has not filed the wealth tax return showing the cash in hand. The Assessing Officer has not doubted the withdrawal of cash. However, the fact is that the assessee has withdrawn cash of Rs.50 lakhs on 31/12/2013. There is no evidence brought on record to show that these withdrawals have been used by the assessee or deposited by the assessee in any 5 Satish Kumar other Bank. It cannot be said that these withdrawals made from the Bank account were used for household expenses or any other investment. In such circumstances, it cannot be disputed that the withdrawals have been used for redeposit into the Bank account of the assessee. In other words, the Assessing Officer has not disputed the existence of Bank accounts and withdrawal from the same. The earlier withdrawal of Rs.50 lakhs from the Bank account on 31/12/2013 or withdrawal from various Bank accounts on different dates is not disputed. The assessee might have kept the cash withdrawals with him and re-deposited into various Bank accounts on a later date. It is quite possible that the assessee might have withdrawn the cash for some purpose but the same remains to be utilized for one reason or the other and the cash continues to be remained with him. Sometimes it may also happen that the cash withdrawals from Bank accounts continues to remain as cash balance with the assessee even for many months and sometimes cash withdrawn is utilized on the same day. All these probable aspects of the matter cannot simply be ignored or brushed aside but the fact remains that the cash has been withdrawn from the Bank and that is not at all disputed. In view of this, the explanation of the assessee deserves to be accepted, unless contrary is brought on record which has not been done in this case. Considering the totality of the facts and circumstances of the case and in view of the discussions above, the cash deposits made by the assessee on various dates should be reasonably presumed that it is from earlier withdrawals made by the assessee on various dates. Accordingly, we delete the entire addition of Rs. 32.5 lakhs made by the Assessing Officer.”
In view of the above, I observe that the Co-ordinate Bench of Tribunal held that sometimes it may happen that the cash withdrawals from bank account continues remains as cash balance with the assessee even for many month and for sometimes cash withdrawn is utilized on the same day. All these
6 Satish Kumar probable aspect of the matter cannot be simply ignored or brushed aside but the facts remains that the factum of cash withdrawn from bank is not at all disputed. It is not a case of the Assessing officer that the amount withdrawn from bank account was utilized or deposited somewhere else, it was ld. CIT(A) who improvised the stand of revenue by taking into consideration. The amounts contemplated by the assessee to the family to meet routine expenses. Be that as it may, it was explained by the assessee before ld. CIT(A) as noted in para 6.5 of first appellate order that the family size of assessee’s is 10 comprising assessee, his wife, two sons and two daughters-in- law and four grand children. In this situation when the son of assessee is doing construction business and other sons and both the daughters-in-law are also earning then the contribution of assessee Rs.20,000/- per month for household expenses and other expenses cannot be held as in sufficient and the ld. CIT(A) cannot allowed to make a new case as an appellate stage. Unless and until, revenue authorities bring on record positive or adverse material to establish that the amount withdrawn by the assessee from his bank account was utilized or deposited somewhere else and the impugned amount of cash deposited was not the same which was withdrawn by the assessee from his bank account. The addition u/s 69A of the Act would not survive and thus, cannot be held as sustainable on the touch stone of principles of tax jurisprudence.
The main allegation leveled by the ld. CIT(A) that it is a highly, unlikely someone huge cash for so long is not tenable and sustainable. In view of the proposition rendered by Co- ordinate Bench of ITAT Cochin in the case of Shri Mathew Philip
7 Satish Kumar Vs. ITO (supra). Therefore, in view of foregoing grievance of assessee is allowed and AO is directed to delete the addition.
In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 22/09/2022.