ANIL KASHINATH SALVE ,MUMBAI vs. ITO 20(1)(1), MUMBAI

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ITA 3267/MUM/2025Status: DisposedITAT Mumbai26 August 2025AY 2014-15Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI OM PRAKASH KANT ( (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had provided sufficient evidence of cash withdrawals in preceding years to explain the deposits. Therefore, the additions sustained by the CIT(A) were unsustainable.

What were the facts?

The assessee deposited cash in his bank account before issuing cheques for share trading. The Assessing Officer added ₹85,000 (claimed as loans returned by friends) and ₹2,99,974 (claimed as commission income) as unexplained. The CIT(A) upheld these additions.

What were the issues?

Whether the cash deposits in the bank account were sufficiently explained by the assessee's evidence of prior cash withdrawals and income sources.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “K (SMC

Before: SHRI SANDEEP GOSAIN & SHRI OM PRAKASH KANT

For Appellant: Mr. Bhagirath Ramawat, Sr. DR
For Respondent: Mr. Bhagirath Ramawat, Sr. DR
Hearing: 20/08/2025
1.

This appeal by the assessee is directed against order dated 27.03.2025 passed by the Ld. Additional/Joint Commissioner of Income-tax, Panaji [hereinafter shall be referred as ‘the Ld. CIT(A)’] for assessment year 2014-15, raising following grounds:

Ground No. 1 In the facts and circumstances of the case and in law the learned Addl / JCIT has erred in confirming the addition of Rs. 85,000/- loan given by the appellant, in previous year and received in current year relevant to appellant, in previous year and received in current year relevant to appellant, in previous year and received in current year relevant to assessment year 2014 assessment year 2014-15. Even though a confirmation letter has been confirmation letter has been filed before the A.O. and Addl / JCIT. filed before the A.O. and Addl / JCIT. Ground No. 2 In the facts and circumstances of the case and in law the learned Addl / In the facts and circumstances of the case and in law the learned Addl / In the facts and circumstances of the case and in law the learned Addl / JCIT has erred in confirming the addition of Rs. 2,99,974/- amount JCIT has erred in confirming the addition of Rs. 2,99,974/ JCIT has erred in confirming the addition of Rs. 2,99,974/ deposited in Bank by cash and cheq deposited in Bank by cash and cheques issued to Share Broker M/s. Latin ues issued to Share Broker M/s. Latin Manharlal Securities Private Limited, through the appellant has submitted Manharlal Securities Private Limited, through the appellant has submitted Manharlal Securities Private Limited, through the appellant has submitted the details before the A.O. and the details before the A.O. and Addl / JCIT.

2.

The assessee filed his return of income on 16.05.2015 The assessee filed his return of income on 16.05.2015 The assessee filed his return of income on 16.05.2015 declaring a total income of ₹2,27,610/-. The assessee derived declaring a total income of he assessee derived income from salary and was also engaged in trading/speculation of income from salary and was also engaged in trading/speculation of income from salary and was also engaged in trading/speculation of shares. The return so filed was selected for scrutiny, and in shares. The return so filed was selected for scrutiny, and in shares. The return so filed was selected for scrutiny, and in pursuance thereof, statutory notices under the Income-tax Act, pursuance thereof, statutory notices under the Income pursuance thereof, statutory notices under the Income 1961 (hereinafter referred to as “the Act”) w 1961 (hereinafter referred to as “the Act”) were issued and duly ere issued and duly complied with. During the course of assessment, the Assessing During the course of assessment, the Assessing During the course of assessment, the Assessing Officer noticed that the assessee had deposited cash in his bank Officer noticed that the assessee had deposited cash in his bank Officer noticed that the assessee had deposited cash in his bank account immediately prior to issuance of cheques to M/s. account immediately prior to issuance of cheques to M/s. account immediately prior to issuance of cheques to M/s. Manoharlal Securities Pvt. Ltd. for the purpose of speculation in Manoharlal Securities Pvt. Ltd. for the purpose of s Manoharlal Securities Pvt. Ltd. for the purpose of s shares. On being queried, the assessee explained that a sum of shares. On being queried, the assessee explained that a sum of shares. On being queried, the assessee explained that a sum of ₹85,000/- represented cash loans returned by friends, while the represented cash loans returned by friends, while the represented cash loans returned by friends, while the balance deposits were claimed to be sourced from commission balance deposits were claimed to be sourced from commission balance deposits were claimed to be sourced from commission income from real estate dealings and catering contracts. However, income from real estate dealings and catering contracts. However, income from real estate dealings and catering contracts. However, as the assessee failed to adduce any credible or verifiable as the assessee failed to adduce any credible or verifiable as the assessee failed to adduce any credible or verifiable documentary evidence to substantiate the claim, the Assessing tary evidence to substantiate the claim, the Assessing tary evidence to substantiate the claim, the Assessing Officer treated both the amounts, viz. ₹85,000/- and and ₹2,99,974/-, Officer treated both the amounts, viz. as unexplained and added the same to the income of the assessee. as unexplained and added the same to the income of the assessee. as unexplained and added the same to the income of the assessee.

2.1 On appeal, the learned CIT(A) upheld the action of the On appeal, the learned CIT(A) upheld the action of the On appeal, the learned CIT(A) upheld the action of the Assessing Officer. It was held that the assessee had not been able to Officer. It was held that the assessee had not been able to Officer. It was held that the assessee had not been able to establish, with cogent material, the advancement of any loans to establish, with cogent material, the advancement of any loans to establish, with cogent material, the advancement of any loans to friends in earlier years, nor could he prove the alleged income from friends in earlier years, nor could he prove the alleged income from friends in earlier years, nor could he prove the alleged income from real estate or catering contracts. The handwritten confirmations real estate or catering contracts. The handwritten confirmatio real estate or catering contracts. The handwritten confirmatio produced were found to be of no evidentiary value. Similarly, as produced were found to be of no evidentiary value. Similarly, as produced were found to be of no evidentiary value. Similarly, as regards the cash deposit of ₹2,99,974/-, the assessee’s explanation regards the cash deposit of , the assessee’s explanation was found to be devoid of supporting material, and consequently, was found to be devoid of supporting material, and consequently, was found to be devoid of supporting material, and consequently, the addition was sustained. The relevant finding of ld CIT(A) is the addition was sustained. The relevant finding of ld the addition was sustained. The relevant finding of ld reproduced as under: under:

7.1 Ground no.01 raised by the appellant is related with the issue 7.1 Ground no.01 raised by the appellant is related with the issue 7.1 Ground no.01 raised by the appellant is related with the issue that the Ld. AO has erred in adding full, Rs.85,000/ that the Ld. AO has erred in adding full, Rs.85,000/ that the Ld. AO has erred in adding full, Rs.85,000/- amount of loans given by the appellant in earlier year and received during the loans given by the appellant in earlier year and received during the loans given by the appellant in earlier year and received during the previous year relevant t previous year relevant to AY 2014-15 even though complete details 15 even though complete details were filed before the AO which is adjudicated on merit of the case, were filed before the AO which is adjudicated on merit of the case, were filed before the AO which is adjudicated on merit of the case, facts, submission filed by the appellant and material available on facts, submission filed by the appellant and material available on facts, submission filed by the appellant and material available on record, as under: record, as under:- Upon careful perusal of the impugned assessment order, state Upon careful perusal of the impugned assessment order, state Upon careful perusal of the impugned assessment order, statement of fact and data available on record it is seen that during the course of fact and data available on record it is seen that during the course of fact and data available on record it is seen that during the course of assessment proceedings, on being asked about the nature and of assessment proceedings, on being asked about the nature and of assessment proceedings, on being asked about the nature and sources of various cash deposits in bank, the appellant explained sources of various cash deposits in bank, the appellant explained sources of various cash deposits in bank, the appellant explained that he has received cash loan returned back by the that he has received cash loan returned back by the that he has received cash loan returned back by the friends, commission from real estates and income from certain contracts but commission from real estates and income from certain contracts but commission from real estates and income from certain contracts but the appellant could not proov its contention as to when he had the appellant could not proov its contention as to when he had the appellant could not proov its contention as to when he had advanced loans to his friends. Further, the appellant utterly failed advanced loans to his friends. Further, the appellant utterly failed advanced loans to his friends. Further, the appellant utterly failed to furnish any documentary evidence in respect to furnish any documentary evidence in respect of commission from of commission from real and income from catering contract etc. except the copies of hand real and income from catering contract etc. except the copies of hand real and income from catering contract etc. except the copies of hand written confirmation from the persons who was stated to have written confirmation from the persons who was stated to have written confirmation from the persons who was stated to have taken unsecured loans from the appellant which has no evidentiary taken unsecured loans from the appellant which has no evidentiary taken unsecured loans from the appellant which has no evidentiary value. The appellant has failed to furni value. The appellant has failed to furnish the relevant supporting sh the relevant supporting documentary evidence which would substantiate the genuineness documentary evidence which would substantiate the genuineness documentary evidence which would substantiate the genuineness of the transactions viz copy of aadhar card, PAN and bank account of the transactions viz copy of aadhar card, PAN and bank account of the transactions viz copy of aadhar card, PAN and bank account number with transaction details etc., during the course of number with transaction details etc., during the course of number with transaction details etc., during the course of assessment as well as appellate proceeding assessment as well as appellate proceedings. E TAX DEPARTME s. E TAX DEPARTME Considering the above foregoing discussion it is held that the AO Considering the above foregoing discussion it is held that the AO Considering the above foregoing discussion it is held that the AO has correctly passed the assessment order making an addition of has correctly passed the assessment order making an addition of has correctly passed the assessment order making an addition of Rs.85,000/- in the income of the appellant during the year under in the income of the appellant during the year under in the income of the appellant during the year under consideration and the assessment order pass consideration and the assessment order passed by the AO has no ed by the AO has no infirmity and need not to be interfered with. Accordingly, Ground no infirmity and need not to be interfered with. Accordingly, Ground no infirmity and need not to be interfered with. Accordingly, Ground no 01 raised in this appeal being devoid of merit is dismissed 01 raised in this appeal being devoid of merit is dismissed 01 raised in this appeal being devoid of merit is dismissed herewith. 7.2 Ground no.02 raised by the appellant is related with the issue 7.2 Ground no.02 raised by the appellant is related with the issue 7.2 Ground no.02 raised by the appellant is related with the issue that the Ld. AO has erred in a that the Ld. AO has erred in adding Rs.2,99,974/ dding Rs.2,99,974/- amount deposited in bank by cash and cheques issued to share broker M/s. deposited in bank by cash and cheques issued to share broker M/s. deposited in bank by cash and cheques issued to share broker M/s. Latin Manharlal Securities Pvt. Ltd., even though proper explanation Latin Manharlal Securities Pvt. Ltd., even though proper explanation Latin Manharlal Securities Pvt. Ltd., even though proper explanation was submitted before the AO which is adjudicated on merit of the was submitted before the AO which is adjudicated on merit of the was submitted before the AO which is adjudicated on merit of the case, facts, submission filed case, facts, submission filed by the appellant and material available by the appellant and material available on record, as under: on record, as under:- Upon careful perusal of the impugned assessment order it is seen Upon careful perusal of the impugned assessment order it is seen Upon careful perusal of the impugned assessment order it is seen that during the year under consideration, the appellant has that during the year under consideration, the appellant has that during the year under consideration, the appellant has deposited cash amounting to Rs.6,82,591/ deposited cash amounting to Rs.6,82,591/- in his bank account in his bank account maintained with Union Bank of India. On being asked about the ined with Union Bank of India. On being asked about the ined with Union Bank of India. On being asked about the source and nature of the said cash deposit alongwith documentary source and nature of the said cash deposit alongwith documentary source and nature of the said cash deposit alongwith documentary evidences, the AR of the appellant submitted the bank account evidences, the AR of the appellant submitted the bank account evidences, the AR of the appellant submitted the bank account statement of the appellant bearing account no.30028228987 statement of the appellant bearing account no.30028228987 statement of the appellant bearing account no.30028228987 maintained maintained with with State State Bank Bank of of India India and and account account no.414502010009340 maintained with Union Bank of India. no.414502010009340 maintained with Union Bank of India. no.414502010009340 maintained with Union Bank of India. Further, the appellant submitted that during the year under Further, the appellant submitted that during the year under Further, the appellant submitted that during the year under consideration he had traded in equity shares both in speculation consideration he had traded in equity shares both in speculation consideration he had traded in equity shares both in speculation and short term sale of shares and the sour and short term sale of shares and the source of the investment in ce of the investment in the share trading was earlier years savings and in support the the share trading was earlier years savings and in support the the share trading was earlier years savings and in support the appellant filed copy of contract note for sale of shares of IGL Ltd. appellant filed copy of contract note for sale of shares of IGL Ltd. appellant filed copy of contract note for sale of shares of IGL Ltd. And copy of STT return i.e Form And copy of STT return i.e Form-10DB certificate. The appellant filed 10DB certificate. The appellant filed statement of speculation loss statement of speculation loss of Rs.47,968/- and short term capital and short term capital loss of Rs. 1, 12,555/ loss of Rs. 1, 12,555/-. Further, upon perusal of bank statement of Union Bank of India Further, upon perusal of bank statement of Union Bank of India Further, upon perusal of bank statement of Union Bank of India during the year under consideration, the AO observed that the during the year under consideration, the AO observed that the during the year under consideration, the AO observed that the appellant had made cash deposits on various dates and appellant had made cash deposits on various dates and appellant had made cash deposits on various dates and immediately sa immediately same had been withdrawn by cheque. On being asked me had been withdrawn by cheque. On being asked about the source and nature of various cash deposits, the appellant about the source and nature of various cash deposits, the appellant about the source and nature of various cash deposits, the appellant utterly failed to explain satisfactorily source of cash deposit utterly failed to explain satisfactorily source of cash deposit utterly failed to explain satisfactorily source of cash deposit amounting to Rs.2,99,974/ amounting to Rs.2,99,974/- even though hearing opportunities were even though hearing opportunities were provided to the appellant in this regard. o the appellant in this regard. As the appellant utterly failed to furnish any clinching documentary As the appellant utterly failed to furnish any clinching documentary As the appellant utterly failed to furnish any clinching documentary evidence/reasonable explanation during the course of assessment evidence/reasonable explanation during the course of assessment evidence/reasonable explanation during the course of assessment as well as appellate proceedings, it is held that the AO has correctly as well as appellate proceedings, it is held that the AO has correctly as well as appellate proceedings, it is held that the AO has correctly passed the passed the assessment assessmen t order order by making by making an addition of an addition of Rs.2,99,974/ Rs.2,99,974/- credit in the bank as unexplained cash credit in the credit in the bank as unexplained cash credit in the income of the appellant during the year under consideration the income of the appellant during the year under consideration the income of the appellant during the year under consideration the assessment order passed by the AO has no infirmity and need not assessment order passed by the AO has no infirmity and need not assessment order passed by the AO has no infirmity and need not to be interfered with. Accor to be interfered with. Accordingly, Ground no 02 raised in this dingly, Ground no 02 raised in this appeal being devoid of merit is dismissed appeal being devoid of merit is dismissed herewith.

3.

Before us, the learned Counsel for the assessee submitted that Before us, the learned Counsel for the assessee submitted that Before us, the learned Counsel for the assessee submitted that the assessee had sufficient cash withdrawals in the preceding the assessee had sufficient cash withdrawals in the preceding the assessee had sufficient cash withdrawals in the preceding assessment year, which were available t assessment year, which were available to explain the impugned o explain the impugned deposits. In support, copies of bank statements of Union Bank of deposits. In support, copies of bank statements of Union Bank of deposits. In support, copies of bank statements of Union Bank of India and State Bank of India were furnished, demonstrating India and State Bank of India were furnished, demonstrating India and State Bank of India were furnished, demonstrating withdrawals of ₹2,79,500/ 2,79,500/- and ₹98,000/- respectively. It was respectively. It was further submitted that confirmations obtained further submitted that confirmations obtained from persons who from persons who had repaid cash loans to the assessee alongwith bank statements had repaid cash loans to the assessee alongwith bank statements had repaid cash loans to the assessee alongwith bank statements were already filed before the AO and ld CIT(A) were already filed before the AO and ld CIT(A).

3.1 We have carefully perused the rival contentions as well as the We have carefully perused the rival contentions as well as the We have carefully perused the rival contentions as well as the material placed on record. On examination of the bank statements, material placed on record. On examination of the bank state material placed on record. On examination of the bank state it is evident that the withdrawals as claimed by the assessee in it is evident that the withdrawals as claimed by the assessee in it is evident that the withdrawals as claimed by the assessee in earlier years stand verified. Thus, to the extent of such availability earlier years stand verified. Thus, to the extent of such availability earlier years stand verified. Thus, to the extent of such availability of cash in hand, the deposits made in the year under consideration of cash in hand, the deposits made in the year under consideration of cash in hand, the deposits made in the year under consideration stand duly explained. In these circumstances, we are of the stand duly explained. In these circumstances, stand duly explained. In these circumstances, considered view that the additions sustained by the learned CIT(A) considered view that the additions sustained by the learned CIT(A) considered view that the additions sustained by the learned CIT(A) are unsustainable. Accordingly Accordingly, we direct the Assessing Officer to we direct the Assessing Officer to delete the additions. The ground No. 1 and 2 of the appeal of the delete the additions. The ground No. 1 and 2 of the appeal of the delete the additions. The ground No. 1 and 2 of the appeal of the assessee are accordingly allowed assessee are accordingly allowed.

4.

In the result, the appeal of the assessee stands allowed. the result, the appeal of the assessee stands allowed. the result, the appeal of the assessee stands allowed.

Order pronounced in the open Court on nounced in the open Court on 26/08/2025. /08/2025.

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