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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI MAHAVIR PRASAD & SHRI MANISH BORAD
The above captioned appeal filed at the instance of the Assessee for Assessment Year 2010-11 is directed against the order of Ld. Commissioner of Income Tax(Appeals) (in short ‘Ld. CIT], Ujjain dated 17.07.2020 which is arising out of the order u/s 144/147 of the Income Tax Act 1961(In short the ‘Act’) dated 11.12.2017 framed by ITO-2(2), Ujjain.
The assessee has raised following grounds of appeal:
The Ld. CIT(A) has erred in maintaining the addition of Rs.17,29,600/- as income being the deposits in the bank.
2. The ld. CIT(A) has erred in not considering the submissions for explaining the source of money deposited in the bank. It was proved before the lower authorities that the assessee had withdrawn the money from the bank from the account of his wife. 3. Without prejudice to the above, the Ld. CIT(A) has erred in not considering the peak credit and the availability of cash. 4. The addition of Rs.17,29,600/- may please be deleted. 5. The assessee craves to amend, alter or delete any of the grounds of appeal.
Brief facts of the case as culled out from the records are that the assessee is an individual. As per information received from AIR, it was found that a cash amount of Rs. 17,29,600/- was deposited in the Saving Bank Account held by the assessee with State Bank of India Badnagar. Notice u/s 148 of the Act dated 25.03.2017 was issued but there was no compliance. Again notice u/s 142(1) of the Act was issued but there was no compliance. Seven more opportunities were provided but again there was no compliance.
Ld. AO had no option except to pass ex-parte order u/s 144 of the Act making addition for unexplained cash deposit of Rs.17,29,600/- and assessing the income at Rs.17,29,600/-.
Aggrieved assessee preferred an appeal before the Ld. CIT(A).
Before the Ld. CIT(A) assessee made detailed submissions stating that the assessee himself is a bank employee and his wife runs business in the name of Aryaveer Traders which deals in trading of building construction material and food grains. Details were also filed regarding the cheque/cash transaction between the assessee and the proprietorship concern owned by assesse’s wife. Remand report was also called from the ld. AO and the same dated 13.03.2020 was filed. This remand report was provided to the assessee who gave his reply on 15.07.2020. Ld. CIT(A) after going through the details remand report and reply filed by the assessee was not satisfied and he confirmed the addition of Rs. 17,29,600/- observing as follows:
6.I have gone through the fact of the case. During the appellate proceedings it was argued that the cash deposit was out of business receipt in the name of his wife. I do not find any merit in such argument particularly when separate accounts are maintained by his wife. It is further seen that the appellant is a bank employee and therefore he is aware of the consequences of cash deposit in the saving account. It is further observed that on the other hand the assesse has transferred money from his account to the account of the wife by cheque. The story made by the assessee is a make believe story and no evidence was filed linking the cash deposit with the business of the wife. I therefore do not fine any merit in the submission filed on behalf of the appellant. 7.As per section 69A, where the assessee is found to be the owner of any money, bullion, jewellery or other valuable article which are not recorded in the books of account maintained by him for any 3 source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not satisfactory in the opinion of the AO., the value of such asset may be deemed to be the income of the assessee of the corresponding financial year. 7.1 Hon'ble’ Supreme Court in the cases of Roshan Di Hatti vs. CIT [1977] 107 ITR 938 (SC) and Kale Khan Mohammad Hanif v. CIT (1963) 50ITR 1(SC) held that the law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him. Where the nature and source of a receipt, whether it be of money or other property, cannot be satisfactorily explained by the assessee, it is open to the revenue to hold that it is the income of the assessee and no further burden lies on the revenue to show that the income is from any particular source.
In the case of Shankar Industries v. CIT (1978) 114 ITR 689 (Cal.) the Hon'ble Calcutta High Court held that it is necessary for the assessee to prove prima facie the transaction which results in a cash credit in his books of account. Such proof of the identity of his creditor, the capacity of such creditor to advance the money and lastly the genuineness prima facie the aforesaid, the onus shifts to the department. 7.3 Hon'ble Madras High court in the case of V. Datchinamurthy v. Asstt. Director of Inspection [1984] 149 ITR 341 (Mad.) held that it has been a long accepted principle of income tax law that an assessee is obliged to explain the nature and source of cash credits in his accounts and in the absence of satisfactory explanation on his part, the assessing authorities can very well proceed to treat the amount of cash credits in question as representing the taxpayer’s income. 7.4 Hon'ble Madras High Court in the case of CIT vs. Uma Devi Bhuwalka 181 ITR 547 has held that “investment by way of deposit if not properly explained by the assessee, will be treated as undisclosed income of the assessee.”
In the light of aforesaid discussion on the facts of the case and provision of law, I hold that the appellant has thoroughly fail to discharge his onwu with regard to cash deposit in his saving bank account and therefore addition made by the AO of Rs.17,29,60/- is confirmed. In the result, appeal is dismissed.
Aggrieved assessee preferred an appeal before this Tribunal.
Ld. counsel for the assessee vehemently argued referring to the written submission filed before Ld. CIT(A) stating that the source of cash deposit was withdrawal made from the Bank account held with the proprietorship concern of assessee’s wife and an alternate plea was also raised that peak cash balance in the bank account is Rs. 6,19,000/- on 16.12.2009 and the addition if any to be confirmed for unexplained cash deposit should not exceed peak cash balance. Ld. Counsel for the assessee also took us through the paper book dated 13.08.2021 running from 1 to 23 and also additional paper book dated 27.09.2021 providing details of KCC Loan from SBI Badnagar Branch.
Per contra ld. DR vehemently argued supporting the orders of the both lower authorities.
We have heard rival contentions and perused the records placed before us. We find that the assessee is a bank employee. There was a cash deposit of Rs.17,29,600/- in his Saving Bank Account of Indore Badnagar. Assessee remained noncompliant before the Ld. AO even when various opportunities were provided. Before Ld. CIT(A) assessee has contended that the source of cash deposit is receipt from encashing the cheque received from M/s. Aryaveer Traders which is a sole proprietory concern owned by Smt.
Sashikala Chauhan. Though the assessee has provided some details to support its contention to explain the source of cash deposits but we are not satisfied with these explanations. However, the assessee has filed cash flow statement placed at page 23 of the paper book and on perusal of the same we find that the peak cash balance is at Rs.6,19,400/- as on 16.12.2009 and all other entries are cash deposits and withdrawals. Though the assessee has filed bank statement of M/s Aryaveer Traders but it is not sufficient to explain the source of cash deposit made by the assessee.
8. Under these given facts and circumstances of the case where there are regular cash deposit and withdrawals and there is no other evidence by Revenue to show that the alleged cash deposit is income of the assessee and on the other hand assessee has failed to demonstrate the real purpose and source of cash deposit and withdrawals, nor assessee had received any income by cheque other than the salary so received from bank, we being fair to both the parties are of the considered view that sustaining the addition for the peak cash balance of Rs.6,19,400/- will meet the end to justice. We accordingly sustain the addition for unexplained cash deposit to the extent of Rs.6,19,400/-. Assessee gets relief of Rs.11,10,200/-. Thus, grounds raised by the assessee are partly allowed.
In the result, Assessee’s appeal in ITANo.281/Ind/2020 is partly allowed. The order pronounced as per Rule 34 of ITAT Rules, 1963 on 30.11.2021.