Y NAVEEN SRINIVASA ,HYDERABAD vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-14(1), HYDERABAD

Brief facts of the case as taken from AY 2015-16, the assessee, being an individual, deriving income under various heads i.e., House property, Other Sources and Salary from M/s. Sathyavathi Bio-life Sciences Ltd., The assessee filed his return of income for the impugned AY 2015-16 on 24.08.2015, admitting a total income of Rs.2,44,99,900/-. The case was selected for scrutiny under CASS and the scrutiny assessment was completed u/s. 143(3) of the Act, vide order dated 20.12.2017, determining the total taxable income of the assessee at Rs. 2,82,77,700/-. While doing so, the AO made an addition of Rs. 38,27,800/- , being cash deposits found in the bank accounts of the assessee on the ground that the assessee has failed

Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A) and contended that the AO committed a mistake in not considering the cash withdrawals made from the bank account as

After considering the submissions of the assessee, the CIT(A) discussed the issue at length with various case law and held that I don’t find fault with the action of the AO in coming to the conclusion that the assessee has failed to explain accounted sources of funds for cash deposits made in the bank accounts and, therefore, assessing the amount of cash deposits of Rs. 38,27,800/- as income of the assessee. He, therefore, confirmed the order of AO.

Aggrieved by the order of CIT(A), the assessee is in appeal before us raising the following grounds of appeal, which are common in both the appeals under consideration, except the quantum of addition: “1. The order of the learned CIT(A) confirming the addition of Rs.38,27,800 is not only erroneous both on facts and in law but is perverse. 2. The learned CIT(A) confirmed the addition made by the AO more on the basis of presumptions and surmises than the facts and position of law. 3. The learned CIT(A) erred in observing about human probabilities for concluding that no person would hold cash withdrawn when not used without depositing the same in bank rather than appreciating the fact that such presumption would depend on the status of the person. 4. The learned CIT(A) erred in concluding that the assessee is not left with Cash out of opening cash balance of F.Y.2011-12 on the premise that entire amount is deposited in the bank without appreciating that it was continuous process and the assessee's claim is with regard to the opening cash balance as on 1-4-2014 of Rs.22,24,257 and not that of F.Y.2011-12 and the AO never demonstrated that there cannot be any opening

Before us, ld. AR of the assessee filed a petition under rule 29 of Appellate Tribunal Rules, 1963 for admission of the following documents as additional evidence: 1. Cash book of the assessee for the period 01/04/2011 to 31/03/2012 along with HDFC Bank statement for the relevant period. 2. Details statement of cash deposits and withdrawals made by the assessee for the period 01/04/2012 to 31/03/2013 along with Indian Overseas Bank, HDFC Bank statements for the relevant period. 3. Detailed statement of cash deposits and withdrawals made by the assessee for the period 01/04/2013 to 31/03/2014 along with HDFC Bank statement for the relevant period. 6.1 Ld. AR submitted that CIT(A) has given a finding that the assessee is not left with cash out of opening cash balance of FY.2011-12 on the premise that entire amount is deposited in the bank and further that the CIT(A) has given a finding that the assessee has not filed copies of cash book maintained, if any or cash flow statement, as the case may be for the missing period i.e., from 01.04.2011 to 31.03.2014 to claim the availability of cash in hand of Rs.22,24,257 as at 01.04.2014 and therefore there is no cash balance available with the assessee to make deposits. It is therefore the assessee is filing the detailed statement of cash deposits and withdrawals along with bank statements of the assessee for the period 01.04.2011 to 31.03.2014 as additional evidence before the Hon'ble Tribunal to demonstrate that the assessee was having sufficient opening balance for the year under consideration.

The ld. DR, on the other hand, relied on the orders of revenue authorities.

Considered the rival submissions and perused the material on record. We admit the additional evidences filed by the assessee, which are the important material to decide the issue under consideration. In fact, the revenue authorities made the addition on account of cash deposits in the bank account of the assessee when assessee failed to explain the genuine source of such cash deposits by way of documentary evidence. Since the additional evidence filed for the first time before us and the revenue has no occasion to examine the same, we remit the issue back to the file of the AO with a direction to examine the additional evidences filed by the assessee and decide the issue in accordance with law after providing reasonable opportunity of being heard to the assessee.

As the facts and grounds are materially identical in AY 2016-17 to that of AY 2015-16, following the decision therein, we remit this appeal also to the file of the AO with similar directions.

As the corresponding appeals have been adjudicated, the SAs field by the assessee become infructuous and therefore, the same are dismissed as infructuous.