KHUMARAM BHANARAMJI CHOUDHARY,PUNE vs. INCOME-TAX OFFICER, WARD - 7(4), PUNE

आदेश / ORDER

PER VIKAS AWASTHY, JM :

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-5, Pune dated 13-07-2017 for the assessment year 2014-15.

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business of trading in hardware items. The assessee filed his return of

income or the impugned assessment year on 02-07-2015 declaring total

income of Rs.2,67,021/-. The case of the assessee was selected for

scrutiny under CASS, consequently, statutory notice u/s. 143(2) of the

Income Tax Act, 1961 (hereinafter referred to as “the Act”) was issued to

the assessee on 27-07-2016. During scrutiny assessment proceedings, the

Assessing Officer observed that there were cash deposits to the tune of

Rs.16,10,000/- in the bank account of assessee maintained with

Shivajirao Bhosale Sahakari Bank Ltd. The assessee explained that out of

these cash deposits Rs.2,20,000/- were received by the assessee from his

father as gift and Rs.2,50,000/- was on account of recovery of loans and

advances given in earlier assessment years. However, the Assessing Officer

rejected the explanation furnished by the assessee and made addition of

the entire amount.

Aggrieved by the addition made in the assessment order dated 22-

12-2016, the assessee filed appeal before the Commissioner of Income Tax

(Appeals). During First Appellate proceedings the assessee gave details of

loans and advances recovered by the assessee and also gave details of cash

deposits in the bank. However, the Commissioner of Income Tax (Appeals)

also disbelieved explanation furnished by the assessee and confirmed the also disbelieved explanation furnished by the assessee and confirmed the

addition made by the Assessing Officer. Now, the assessee is in second

appeal before the Tribunal.

of the assessee submitted that the addition of Rs.16,10,000/- on account

of unexplained cash deposits in the bank includes : of unexplained cash deposits in the bank includes :

i. Opening cash balance Rs.55,905/-.

ii. Gift received from father Rs.2,20,000/-.

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iii. Amount received from loans and advances Rs.2,50,000/-.

iv. Cash deposits out of withdrawals from bank Rs.8,00,000/-.

v. Cash out of business cash receipts Rs.2,84,095/-. -------------------- Total Rs.16,10,000/-

3.1 The ld. AR referred to Balance Sheet of the assessee as on

31-03-2013 at page 13 of the paper book to show that the amount of

Rs.2,50,000/- as Loans and Advances was duly reflected in the Balance

Sheet for the immediately preceding financial year. During the period

relevant to the assessment year under appeal the assessee has received

back this amount of Rs.2,50,000/-. The ld. AR further referred to bank

statements at pages 16 and 17 of the paper book to show that the mount

of Rs.8,00,000/- withdrawn on 26-04-2013 Rs.3,00,000/- and

Rs.5,00,000/- withdrawn on 30-04-2013 was deposited by the assessee on

three occasions subsequently, i.e. Rs.3,00,000/- on 09-05-2013,

Rs.4,50,000/- on 30-05-2013 and Rs.50,000/- on 05-07-2013. The ld. AR

further submitted that remaining amount of Rs.2,84,095/- were cash

deposits on various dates out of business cash receipts.

vehemently defended the findings of Commissioner of Income Tax (Appeals)

in confirming the addition.

sides and have perused the orders of authorities below. The solitary issue

raised by the assessee in appeal is against addition of Rs.16,10,000/- on

account of unexplained cash credits in the saving bank account of the

assessee. The ld. AR has referred to the chart furnished before the

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Commissioner of Income Tax (Appeals) giving breakup of the amounts

deposited during the period relevant to the assessment year under appeal.

For the sake of convenience the same is reproduced here-in-below :

Sr. No. Particulars Amount (Rs.)

1 Opening Cash as on 1.4.2013 55,905/-

2 Gift Received from father 2,20,000/-

3 Amount received from Loans and Advances 2,50,000/-

4 4 Cash Deposited out of Cash withdrawn from Bank Cash Deposited out of Cash withdrawn from Bank 8,00,000/- 8,00,000/-

5 Cash Deposited out of business cash receipts 2,84,095/-

Total 16,10,000/-

the recovery of loans and advances made in the earlier assessment years. the recovery of loans and advances made in the earlier assessment years.

The ld. AR has pointed that the amount of Rs.2,50,000/- was shown under

the head Loans and Advances in the Balance Sheet as on 31-03-2013. We

further observe that this amount of Rs.2,50,000/- is not appearing in the

Balance Sheet as on 31-03-2014 as the amount has been recovered by the

assessee. The assessee has been able to substantiate that the amount of

Rs.2,50,000/- is on account of recovery of Loans and Advances. Rs.2,50,000/- is on account of recovery of Loans and Advances.

As regards cash deposit of Rs.8,00,000/- the ld. AR of assessee has

drawn our attention to the bank statement at pages 16 and 17 of the paper

book. A perusal of bank statement shows that there were withdrawals of

Rs.3,00,000/- on 26-04-2013 and Rs.5,00,000/- on 06-05-2013. There

were also deposits of Rs.3,00,000/-, Rs.4,50,000/- and Rs.50,000/- on

09-05-2013, 30-05-2013 and 05-07-2013, respectively. The proximity of

date of withdrawals and deposits give sufficient room for presumption

5 ITA No.2506/PUN/2017, A.Y. 2014-15

that the amounts deposited were the same which were earlier withdrawn by the assessee from the bank account.

Another figure which appears in the addition is Rs.2,84,095/- i.e. cash deposits out of business cash receipts on various dates. It is an undisputed fact that the assessee is engaged in trading of hardware items.

It is not uncommon that cash receipts in normal business operations are deposited in the bank by the traders. Therefore, we do not find any reason to sustain the said amount as unproved cash credits. to sustain the said amount as unproved cash credits.

assertions made by the assessee there is no documentary evidence to support such contentions. In the absence of any cogent documentary evidence the addition of Rs.2,20,000/- on account of alleged gift from

father cannot be accepted. father cannot be accepted.

Order pronounced on Wednesday, the 09th day of January, 2019.

Sd/- Sd/- (R.S. Syal) (Vikas Awasthy) VICE PRESIDENT JUDICIAL MEMBER पुणे/ Pune; �दनांक/ Dated : पुणे/ Pune; �दनांक/ Dated : 09th January, 2019 09th January, 2019 RK

6 ITA No.2506/PUN/2017, A.Y. 2014-15

आदेश क� ��त�ल�प अ�े�षत/ Copy of the Order forwarded to : अपीलाथ�/ The Appellant. अपीलाथ�/ The Appellant. 1. 1. ��यथ�/ The Respondent. 2. आयकर आयु�त (अपील) / The CIT(A)-5, Pune 3. 4. The Pr. Commissioner of Income Tax-4, Pune �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य मामला” ब�च, 5. पुणे/ DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल/ Guard File. 6. //स�या�पत ��त// True Copy// // True Copy // आदेशानुसार/ BY ORDER, आदेशानुसार/ BY ORDER,

�नजी स�चव / Private Secretary, आयकर अपील�य अ�धकरण, पुणे/ ITAT, Pune