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Income Tax Appellate Tribunal, “SMC” BENCH, PUNE
Before: SHRI R.S. SYAL & SHRI VIKAS AWASTHY, JM
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.
The brief facts of the case as emanating from records are: The assessee is a proprietor of M/s. Laxmi Hardware and Elec., engaged in the
ITA No.2506/PUN/2017, A.Y. 2014-15
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.
Shri Nikhil Pathak along with Shri P.D. Kudwa appearing on behalf
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.
On the other hand Shri M.K. Verma representing the Department
vehemently defended the findings of Commissioner of Income Tax (Appeals)
in confirming the addition.
We have heard the submissions made by representatives of rival
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
ITA No.2506/PUN/2017, A.Y. 2014-15
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 ld. AR has pointed that out of aforesaid amount Rs.2,50,000/- is
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.
As regards gift received from father Rs.2,20,000/- except for bald
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.
Thus, the addition on account of unproved cash credits is restricted to Rs.2,20,000/- only. The assessee gets relief of Rs.13,90,000/-. The appeal of assessee is partly allowed in the terms aforesaid.
9. In the result, the appeal of assessee is partly allowed. In the result, the appeal of assessee is partly allowed.
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