LAXMAN GOPALDAS SARDA,MUMBAI vs. ITO - 33(2)(1), MUMBAI

Per : Narender Kumar Choudhry, Judicial Member:

This appeal has been preferred by the Assessee against the order dated 07.08.2024, impugned herein, passed by the National
Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax
(Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax
Act, 1961 (in short ‘the Act’) for the A.Y. 2017-18. 2. In the instant case, the Assessee had declared his total income at Rs.1,93,210/- by filing return of income on dated
03.08.2017, which was selected for scrutiny under CASS (limited category) for verifying the cash deposit made during
Mr. Laxman Gopaldas Sarda

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demonetization period and consequently statutory notices were issued to the Assessee. The Assessee in response, filed relevant details and the submission dated 18.07.2019. The Assessee has also claimed that he has not carried out any business activity during the assessment year under consideration.
3. The Assessing Officer (AO), by considering the bank statements of Kotak Mahindra Bank, has observed that the Assessee has made a deposit of Rs.22,25,000/- in SBN notes of Rs.500
&
Rs.1000
on dated
13.12.2016
i.e.
during the demonetisation period, however, has not given any submission relating to the source of such deposit and therefore he show caused the Assessee vide notice dated 23.11.2019. 4. The Assessee filed his reply on dated 03.12.2019 more or less claiming that the cash has been deposited out of cash balance available with the Assessee. Further, the opening balance of cash available as on 01.06.2016 was Rs.72.96 lakhs. Cash balance was out of withdrawals made by the Assessee in previous years and the said amount was accumulated with the Assessee. As the demonetization was declared by the Government, the Assessee has deposited the cash balance in his bank account, therefore, the cash deposited on 13.12.2016 was not out of undisclosed source. The Assessee also submitted balance sheet for F.Y. 2015-16 & 2016-17
as well as cash book from 01.04.2014 to 13.12.2016. Mr. Laxman Gopaldas Sarda

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5. The AO, though considered the submission/claim of the Assessee, however, found the same, as not tenable on the reason that the Assessee has not brought on record any documentary evidence to explain the source of cash deposits of Rs.22,25,000/- in his bank account maintained with Kotak Mahindra Bank. As no documentary evidence, such as earlier bank statement reflecting cash withdrawal or explanation has been put forth by the Assessee, the source of said cash deposit remains un-explained. The Assessee has also not furnished the copy of bank passbook for the period from 01.04.2014 to 31.03.2016 to substantiate the entries shown in the cash book furnished by him. The Assessee has failed to explain the source of cash deposit in his bank account beyond doubt. The AO ultimately made the addition of Rs.22,25,000/- u/s 68 of the Act.
6. The Assessee, being aggrieved, challenged the said addition before the Ld. Commissioner, however, of no avail, as the Ld.
Commissioner vide impugned order dated 07.08.2024, affirmed the aforesaid addition.

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having opening balance of Rs.68,75,989/-. Further, from the cash book, it is clear that the cash available as on 01.06.2016 was also of Rs.72.96 lakhs. The Assessee has demonstrated and claimed that the cash balance in the hands of the Assessee was out of the withdrawals made by the Assessee in the previous year and the said amount was accumulated. Even otherwise, the Assessee is a senior citizen and undergoing certain medical treatments and therefore was required to keep a reasonable cash for medical exigencies. The Assessee, in the considered view of this Court, has clearly demonstrated from the cash book, balance sheet and bank statement that he was having sufficient funds to explain the source of cash deposit. This Court observe that both the authorities below simply on assumption and presumption and by holding “that the Assessee has not filed any details qua source of cash deposit and the cash book and balance sheet, and therefore does not substantiate the genuineness of the cash in hand/cash deposit made in the bank”, made the addition by sidelining the relevant cash book, copy of ITR and bank statements etc. as well as claim/contention raised by the Assessee. In the considered opinion of this Court, the Assessee by producing the relevant documents, has been able to discharge his prima-facie onus cast u/s 68 of the Act and therefore the addition u/s 68 of the Act in any sense is not sustainable. Resultantly, the addition in hand, is deleted.
Mr. Laxman Gopaldas Sarda

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9. In the result, the appeal filed by the Assessee stands allowed.

Order pronounced in the open court on 28.04.2025. (NARENDER KUMAR CHOUDHRY)
JUDICIAL MEMBER

* Kishore, Sr. P.S.

Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
The DR Concerned Bench

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By Order

Dy/Asstt.