BENI PRASAD PARMAR,SHUJALPUR MANDI DISTRICT SHAJAPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX- 2(1), UJJAIN

आदेश / O R D E R

PER KUL BHARAT, J.M: These two appeals by the assessee pertaining to

different assessment years i.e.2010-11 & 2011-12 against

two different orders of the CIT(A), Ujjain both dated

25.7.2017. Since the facts and grounds are identical, both

the appeals were heard together and disposed of by way of

this consolidated order for the sake of convenience and

brevity.

the assessment year 2010-11. The assessee has raised

following ground of appeal:

“The learned A.O. erred in making addition of Rs.23,37,850/- on account of cash deposit in bank account.” 3. The facts giving raise to present appeal are that a

notice u/s 148 of the Income Tax Act, 1961 (hereinafter

called as ‘the Act’) was issued. However, no one appeared

despite issuing of notice to impose penalty u/s 271(1)(b) of

the Act. Therefore, the A.O. proceeded to make addition on

the basis of available material and assessed income u/s

144 of the Act of Rs.23,37,850/-.

4. Aggrieved by this, the assessee preferred an appeal

before the Ld. CIT(A). However, the Ld. CIT(A) did not

consider the explanation as offered by the assessee and the

appeal so filed was dismissed. Now the assessee is in

appeal. Ld. Counsel for the assessee submitted that the

assessing officer had made addition on the basis of deposit

of cash in bank account of the assessee. He submitted

that before Ld. CIT(A), it was submitted that the cash

deposits were the rotation of fund from one bank account

to the other. The assessee has drawn our attention to the

bank statement of the assessee.

orders of the authorities below. He submitted that the

assessee should have approached the A.O. and filed the

requisite details. Ld. D.R. submitted that the source of

deposits are not verifiable.

materials available on records and gone through the orders

of the authorities below. Ld. CIT(A) had dismissed the

appeal by observing as under:

5.1 Ground No.1:- Through this ground of appeal the appellant has challenged the assessment of income at Rs.23,37,850/- on account of cash deposit in bank account and imposition of penalty u/s 271(1)(b) of the I.T. the appellant is receiving salary from Life Insurance Corporation as development officer. The appellant submitted that the cash deposit is from the rotational fund. During the course of assessment proceedings, remand proceedings as well as appellate proceedings, the appellant has not furnished the source of cash deposit in the appellant’s bank account. The appellant has also not furnished the proof that the cash deposit is rotational fund. The appellant has also not furnished the proof of receipt of cash. The appellant’s case cannot be considered u/s 44 AD of the I.T. Act and to adopt net profit of credits of that period to be added and not the whole of the credit in bank account of the appellant is not acceptable. The appellant failed to establish that the credit in the bank account is from business activity. The appellant was expected to furnish the source of cash deposit in the bank account. He was also expected to furnish the complete names and addresses of the persons from whom the cash has been received. The appellant could not able to explain the genuineness of the transaction. The appellant failed to clarify the internal entries in the bank account with sufficient proof. The appellant has not discharged its onus by submitting the source of cash deposit before the A.O. as well as at appellate proceedings. The appellant failed to prove his case. Section 68 provides that any cash credit found in the books relating to which appellant offers no explanation about the nature and source thereof or such explanation is unsatisfactory, such credits could be charged to tax as income of the appellant. The principle embodied in section 68 is only a statutory recognition of what was always understood to be the law based upon the rule that burden of proof is on the taxpayer to prove the genuineness of borrowings or other credits in his books, since the relevant facts are exclusively within his knowledge. The expression “nature and source” has to be understood together as a requirement of identification of the source and the nature of the source, so that the genuineness or otherwise could be inferred.

It is settled law that while considering the question whether the alleged credit by the appellant was a genuine transaction, the initial onus is always upon the appellant and if no explanation is given or the explanation given by the appellant is not satisfactory, the Assessing Officer can disbelieve the alleged credit. But the law is equally settled that if the initial burden is discharged by the appellant by producing sufficient materials in support of the credits, the onus shifts upon the Assessing Officer and after verification, he can call for further explanation from the appellant and in the process, the onus may again shift from the Assessing Officer to the appellant. Therefore, the appellant failed to discharge the burden of proof by not establishing the genuineness of credits in the bank account. The addition made by the AO amounting to Rs.23,37,850/- is Confirmed. Therefore, the appeal on this ground is Dismissed. The imposition of penalty is consequential in nature and therefore, no adjudication is required at this stage.” From the above finding of the Ld. CIT(A), it is evident

that he has not considered the evidences placed before

him. Therefore, after considering the totality of the facts

and in the interest of principles of natural justice, we deem

it proper to afford an opportunity to the assessee to

represent its case before the A.O. We therefore, set aside

the impugned order and restore the assessment to the file

of the A.O. to make assessment afresh after giving

reasonable opportunity to the assessee. Ground raised in

the assessee’s appeal is allowed for statistical purposes.

Appeal of the assessee is allowed for statistical purposes.

7. Now we take up assessee’s appeal in ITA

No.608/Ind/2017 pertaining to the assessment year

2011-12. The assessee has raised solitary ground that

reads as under:

“The learned A.O. erred in making addition of Rs.45,43,500/- on account of cash deposit in bank account.” 8. The facts and circumstances are identical except

change of figure in this year. The respective

representatives of the parties have adopted the same

arguments as were in ITA No.607/Ind/2017.

the materials available on record. The identical issue

came up before this Tribunal in ITA No.607/Ind/2017.

There is no change in the facts and circumstances in ITA

No.607/Ind/2017 (supra) wherein, we have decided the

issue by observing as under:

“6. We have heard the rival submissions, perused the materials available on records and gone through the orders of the authorities below. Ld. CIT(A) had dismissed the appeal by observing as under: 5.1 Ground No.1:- Through this ground of appeal the appellant has challenged the assessment of income at Rs.23,37,850/- on account of cash deposit in bank account and imposition of penalty u/s 271(1)(b) of the I.T. the appellant is receiving salary from Life Insurance Corporation as development officer. The appellant submitted that the cash deposit is from the rotational fund. During the course of assessment proceedings, remand proceedings as well as appellate proceedings, the appellant has not furnished the source of cash deposit in the appellant’s bank account. The appellant has also not furnished the proof that the cash deposit is rotational fund. The appellant has also not furnished the proof of receipt of cash. The appellant’s case cannot be considered u/s 44 AD of the I.T. Act and to adopt net profit of credits of that period to be added and not the whole of the credit in bank account of the appellant is not acceptable. The appellant failed to establish that the credit in the bank account is from business activity. The appellant was expected to furnish the source of cash deposit in the bank account. He was also expected to furnish the complete names and addresses of the persons from whom the cash has been received. The appellant could not able to explain the genuineness of the transaction. The appellant failed to clarify the internal entries in the bank account with sufficient proof. The appellant has not discharged its onus by submitting the source of cash deposit before the A.O. as well as at appellate proceedings. The appellant failed to prove his case. Section 68 provides that any cash credit found in the books relating to which appellant offers no explanation about the nature and source thereof or such explanation is unsatisfactory, such credits could be charged to tax as income of the appellant. The principle embodied in section 68 is only a statutory recognition of what was always understood to be the law based upon the rule that burden of proof is on the taxpayer to prove the genuineness of borrowings or other credits in his books, since the relevant facts are exclusively within his knowledge. The expression “nature and source” has to be understood together as a requirement of identification of the source and the nature of the source, so that the genuineness or otherwise could be inferred. It is settled law that while considering the question whether the alleged credit by the appellant was a genuine transaction, the initial onus is always upon the appellant and if no explanation is given or the explanation given by the appellant is not satisfactory, the Assessing Officer can disbelieve the alleged credit. But the law is equally settled that if the initial burden is discharged by the appellant by producing sufficient materials in support of the credits, the onus shifts upon the Assessing Officer and after verification, he can call for further explanation from the appellant and in the process, the onus may again shift from the Assessing Officer to the appellant. 7

Therefore, the appellant failed to discharge the burden of proof by not establishing the genuineness of credits in the bank account. The addition made by the AO amounting to Rs.23,37,850/- is Confirmed. Therefore, the appeal on this ground is Dismissed. The imposition of penalty is consequential in nature and therefore, no adjudication is required at this stage.” From the above finding of the Ld. CIT(A), it is evident that he has not considered the evidences placed before him. Therefore, after considering the totality of the facts and in the interest of principles of natural justice, we deem it proper to afford an opportunity to the assessee to represent its case before the A.O. We therefore, set aside the impugned order and restore the assessment to the file of the A.O. to make assessment afresh after giving reasonable opportunity to the assessee. Ground raised in the assessee’s appeal is allowed for statistical purposes. Appeal of the assessee is allowed for statistical purposes.” 10. For the same reasoning, the ground raised in this

appeal is also allowed for statistical purposes. The

assessment is restored to the file of the A.O. for deciding

afresh.

allowed for statistical purposes.

Order was pronounced in the open court on 24 .01.2019.

Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER Indore; �दनांक Dated : 24/01/2019 VG/SPS 8 Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order

Assistant Registrar, Indore