DEELIP VISHWANATH DAVLE,LATUR vs. INCOME-TAX OFFICER, WARD - 2, LATUR

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ITA 1727/PUN/2017Status: DisposedITAT Pune21 February 2019AY 2010-115 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 AO erred by considering only cash deposits and ignoring cash withdrawals. It found that the peak balance in the account, when viewed in light of the accepted agricultural income, indicated that the deposits were out of agricultural income.

What were the facts?

The Assessing Officer (AO) made an addition of Rs. 7,39,250/- on account of cash deposits in the assessee's savings bank account. The AO considered only cash deposits and excluded cash withdrawals, despite the assessee providing explanations and evidence of agricultural income.

What were the issues?

Whether the addition on account of cash deposits is sustainable when cash withdrawals were ignored and the peak balance was covered by agricultural income.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI R.S. SYAL

For Appellant: Shri Piyush Bafna
For Respondent: Shri Rajesh Gawli

आदेश / ORDER

PER R.S.SYAL, VP : This appeal by the assessee arises out of the order passed by the CIT(A)-2, Aurangabad on 06-04-2017 in relation to the assessment year 2010-11.

2.

The assessee has filed additional revised grounds.

3.

Ground No.2 is against sustenance of addition of Rs.7,39,250/- on account of cash deposits in bank.

4.

Briefly stated, the facts of the case are that the AO got AIR information about the assessee having deposited cash of

2 ITA No.1727/PUN/2017 Shri Deelip V. Dalve

more than Rs.10.00 lakh in his savings bank account. Notice

u/s. 148 was issued. In the assessment proceedings, the

assessee was called upon to furnish source of cash deposits of

Rs.10.47 lakh made on different dates starting from 21-04-

2009 to 09-03-2010. The assessee tendered some explanation,

with which the Assessing Officer (AO) was not satisfied.

Considering the agricultural income of the assessee as per

certain estimations at Rs.1,56,431/-, the AO made addition of

the remaining amount of Rs.8,90,569/-. (Rs.10.40 lakh, being,

cash deposited in savings account as reduced by agricultural

income as estimated by him at Rs.1,56,431/-). The ld. CIT(A)

accepted the assessee’s explanation about the agricultural

income at Rs.1,67,000/- and Rs.1,40,750/- aggregating to

Rs.3,07,750/- on the basis of photocopies of two bills given by

M/s. Ramesh Narayan Dahe. Addition of Rs.7,39,250/- was

sustained, against which the assessee has come up in appeal

before the Tribunal.

5.

I have heard both the sides and gone through the

relevant material on record. It is noticed that the sole basis for

the addition is cash deposits made by the assessee in his

3 ITA No.1727/PUN/2017 Shri Deelip V. Dalve

savings bank account on different dates. Copy of bank

account is available on page 33 onwards of the paper book,

from which it can be seen that there are several cash deposits

coupled with cash withdrawals. The AO has considered only

cash deposits to the exclusion of cash withdrawals. The

assessee has drawn a statement showing peak balance in

support of cash deposits and cash withdrawals from/to the

savings account, which shows the peak balance at

Rs.2,39,700/-. It is axiomatic that if certain cash deposits are

made and thereafter certain withdrawals are also made which

are re-deposited in the bank account, the AO cannot make

addition on account of unexplained explanation in respect of

only deposits by ignoring the withdrawal side also which was

re-deposited, unless it is shown that the cash withdrawals were

used elsewhere. Adverting to the facts, it is seen that the peak

balance is Rs.2,39,700/-. When I view the peak balance of

Rs.2,39,700/- in the light of agricultural income accepted by

the ld. CIT(A) at Rs.3,07,750/-, it becomes evident that the

cash deposits in the bank account were made out of the

agricultural income, which is much more than peak credit. I,

therefore, order to delete the addition.

4 ITA No.1727/PUN/2017 Shri Deelip V. Dalve

6.

In the result, the appeal is allowed.

Order pronounced in the Open Court on 21st February, 2019 Sd/- (R.S.SYAL) उपा�य� उपा�य�/ VICE PRESIDENT उपा�य� उपा�य�

पुणे Pune; �दनांक Dated : 21st February, 2019 सतीश

आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत / Copy of the Order is forwarded to : अ�ेिषत आदेश आदेश आदेश अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / 3. The CIT (Appeals)-2, Aurangabad 4. The Pr. CIT-2, Aurangabad िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / 5. DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. 6. // True copy // आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

ITA No.1727/PUN/2017 Shri Deelip V. Dalve

Date 1. Draft dictated on 20-02-2019 Sr.PS 2. Draft placed before author 21-02-2019 Sr.PS 3. Draft proposed & placed JM before the second member 4. Draft discussed/approved JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *

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