SHRI SHIV KUMAR BANSAL,BHOPAL vs. THE ITO 3(1), BHOPAL

PER KUL BHARAT, J.M. : Appeal in I.T.A.No. 441/Ind/2014 is directed against

the order of CIT(A)-II, Bhopal dated 03.03.2014 pertaining

to lay 2009-10. 2. The assessee has raised the following grounds of appeal :-

like cash book, bank book, cash flow statement

etc. to justify all the bank deposits and in this way explained the nature and source of the same properly.

(hereinafter referred to as ‘the Act’) was framed vide order

dated 29.12.2011. During the course of assessment

proceedings , the AO noticed that as per AIR information,

the assessee had deposited the cash of Rs. 79,40,000/- in Shiv Kumar Bansal and Smt. Laxmidevi Bansal Bank of India. The AO further noticed that a sum of Rs.

42,72,261/- has been deposited as credits including

interest totaling to Rs. 1,22,12,261. 62. The AO did not accept the explanation of the assessee. The AO treated out

of Rs. 1,22,12,261/-, Rs. 11,00,000/- as explained and rest of the deposits were treated as unexplained and made

the addition of Rs. 1,11,12,261/- u/s 69 of the Act.

Against this, the assessee preferred appeal before the Ld.

CIT(A), who confirmed the addition made in respect of unexplained deposits. Now the assessee is in further appeal

before this Tribunal.

addition of Rs. 1,11,12,261/- u/s 69 of the Income-tax

Act, 1961. 5. The Ld. Counsel for the assessee reiterated the submission as made in the written submissions. The submissions of the assessee are reproduced as under :-

Shiv Kumar Bansal and Smt. Laxmidevi Bansal “In the given case, an addition of Rs. 1,11,12,261/-

was made by the A.O. in his assessment order for the A. Y. 2009-10. The case was selected for scrutiny on the basis of AIR Information. A.O. has made addition for amounts deposited in savings

bank account, and such additions were for cheques

deposited in that account for Rs. 42,72,261/- and cash deposition after reducing a sum of Rs.

11,00,000/- for cash debits in bank account, for Rs.

68,40,000/-. The appellant in the course of assessment proceedings furnished Cash Flow

Statement, Balance Sheet and Profit & Loss

Account of the assessee and also explained that cheque deposits are from various concerns, which are as follows:

Shiv Kumar Bansal and Smt. Laxmidevi Bansal M/s.Sure Foundation

These are the amounts which were received through

account payee cheques from various persons, those

who are income tax assesses and copies of their

Balance Sheets, Income Tax Returns, copy of ledger

accounts of the appellant and their affidavits confirming

the fact of giving such sum to the appellant are enclosed

at Page No. 25-31 of the Paper Book.

It is further submitted that these facts were also explained to the A.O. and all such papers/ documents

except the affidavits were furnished before the A.O. too.

M/s Sure Electricals and Sure Foundation, both are concerns owned by income tax assessees, and such Shiv Kumar Bansal and Smt. Laxmidevi Bansal amounts are well reflected in their accounts and balance sheets as advance given to the appellant.

The addition was made u/s 69 claiming it to be unexplained investment, despite the fact that proper

explanation was offered for such amounts taken as a loan from income tax assessees through account payee

cheques, and also evidenced by books of accounts and balance sheets of lenders. The above amounts received

through account payee cheques include a sum of Rs.

2,23,458/- collected from various debtors for whom

appellant had carried out small civil work petty

contracts. The corresponding incomes in respect to these

amounts have already been offered to tax in our Profit &

Loss Account for the relevant assessment year,

therefore this cannot be the unexplained investment. A sum of Rs. 1,83,687/- received from lCICl Prudential is an amount on account of maturity of Life Insurance

Shiv Kumar Bansal and Smt. Laxmidevi Bansal Policy, which is exempt from income tax u/s 10(1OD),

therefore same cannot be treated as income.

Consequently, none of the cheque amounts received by the appellant can be treated as undisclosed investment

u/s 69. Your Honour is therefore requested to delete the additions made on this account.

There is an addition of Rs. 68,40,000/- on account of cash depositions in bank account of the appellant. All these amounts are preceded by cash withdrawals from bank, and such cash withdrawals and depositions were also reflected in Cash Book furnished before the A.O.

However, A.O. has not accepted those transactions and decided to make the additions. A.O. has not found any defect in the documents and records furnished before

him, yet he decided not to accept those transactions and treated them as undisclosed investments u/s 69. Even otherwise, if "peak credit" of the amounts

Shiv Kumar Bansal and Smt. Laxmidevi Bansal deposited in bank account is calculated, it shall be much less than the sum of Rs. 68,40,000/-, which has been added as undisclosed investment by the A.O. It is undisputed that the amounts were withdrawn from the bank account but not used for any other purpose, and A.O. has not brought anything on record to show the utilisation of such cash withdrawal for any other

purpose. It is important to note that A.O. has given

credit of Rs. 11,00,000/- for the preceding withdrawals,

but he has not given credit for other preceding

withdrawals without giving any reasons for the same.

Therefore, as an alternative plea, only the peak balance

can be added to the income of the appellant.

Therefore, Your Honour is requested to delete the addition of cash deposits in bank account, as the same

was well explained during the course of assessment

proceedings.”

Shiv Kumar Bansal and Smt. Laxmidevi Bansal

Representative opposed the submissions and supported the orders of the lower authorities .

authorities. It is contended that all the amounts preceded

by cash withdrawals shown in the Bank account and such cash withdrawals and deposits were duly reflected in the cash book and furnished before the AO. It is contended

that even if it is assumed that the deposits are unexplained, even in that event, the addition of peak credit

can only be sustained. The Ld. Counsel for the assessee

further submitted that the authorities below have not appreciated the details filed by the assessee. We find that the assessee has furnished details in the form of Bank

statement, balance sheet. We find merit in the contention

Shiv Kumar Bansal and Smt. Laxmidevi Bansal of the assessee that the AO ought to have considered these

details. We, therefore, looking to the totality of facts and circumstances of the present case, deem it proper to set-

aside the impugned order and restore the issue to the file of AO to decide it afresh. The AO is directed to verify the details filed by the assessee and also consider the peak

credits. In that event, if the AO finds that there are certain

unexplained investment and also finds that there are deposits and withdrawals in the Bank statement, he would

compute the peak credit and make addition to the extent of peak credits. However, if he finds that the deposits are explained by the evidence filed by the assessee, he would

delete the addition.

Kumar Bansal in I.T.A.No. 441/Ind/2014 is allowed for statistical purposes.

Shiv Kumar Bansal and Smt. Laxmidevi Bansal

in the case of Smt. Laxmi Bansal.

Shiv Kumar Bansal and Smt. Laxmidevi Bansal like cash book, bank book, cash flow statement

etc. to justify all the bank deposits and in this way explained the nature and source of the same properly.

(hereinafter referred to as ‘the Act’) was framed vide order

dated 29.12.2011. During the course of assessment

proceedings, the AO noticed that as per AIR information,

the assessee had deposited the cash of Rs. 54,85,000/- in Bank of India, HEL, Bhopal and Rs. 18,05,000/-in Bank of Baroda, BHEL. The AO further noticed that a sum of Rs.

49,85,000/- has been deposited by the assessee as cash

and there are other deposits of Rs. 86,95,865/- in the Saving Bank Account. The AO did not accept the explanation of the assessee. The AO treated out of Rs.

Shiv Kumar Bansal and Smt. Laxmidevi Bansal 1,36,81,374/-, Rs. 10,20,000/- as explained and rest of the deposits were treated as unexplained and made the addition of Rs. 1,44,66,374/- u/s 69 of the Act. Against

this, the assessee preferred appeal before the Ld. CIT(A),

who confirmed the addition made in respect of unexplained

deposits. Now the assessee is in further appeal before this Tribunal.

addition of Rs. 1,44,66,374/- u/s 69 of the Income-tax

Act, 1961. 13. The Ld. Counsel for the assessee reiterated the submission as made in the written submissions in the case

of Smt. Laxmi Devi Bansal. The submissions of the assessee are reproduced as under :-

“In the given case, an addition of Rs. 1,44,66,374/-

was made by the A.O. in his assessment order for the A. Y. 2009-10. The case was selected for Shiv Kumar Bansal and Smt. Laxmidevi Bansal scrutiny on the basis of AIR Information. A.O. has made addition for amounts deposited in savings

bank account, and such additions were for cheques

deposited in Bank of India saving account for Rs.

86,95,865/- and cash deposition after reducing a sum of Rs. 10,20,000/- for cash debits in Bank of India saving account, for Rs. 39,65,000/- and cash deposits of Rs. 18,05,000/- in the Bank of Baroda savings account. The appellant in the course of assessment proceedings furnished Cash

Flow Statement, Balance Sheet and Profit & Loss

Account of the assessee and also explained that cheque deposits are from various concerns, which are as follows:

Shiv Kumar Bansal and Smt. Laxmidevi Bansal

These are the amounts which were received

through account payee cheques from various

persons, those who are income tax assesses and copies of their Balance Sheets, Income Tax

Returns, copy of ledger accounts of the appellant

and their affidavits confirming the fact of giving

such sum to the appellant are enclosed at Page No.

17-43 of the Paper Book.

It is further submitted that these facts were also explained to the A.O. and all such papers/

documents except the affidavits were furnished

before the A.O. too. M/s Sure Electricals, Sure

Foundation, Shanti Construction and Shiv Kumar Bansal and Smt. Laxmidevi Bansal S.S.Enterprises, all are concerns owned by income

tax assessees, and such amounts are well

reflected in their accounts and balance sheets as advance given to the appellant.

The addition was made u/s 69 claiming it to be unexplained investment, despite the fact that proper explanation was offered for such amounts

taken as a loan from income tax assessees through

account payee cheques, and also evidenced by books of accounts and balance sheets of lenders.

The above amounts received through account

payee cheques include a sum of Rs. 25,000/-

collected from various debtors for whom appellant

had carried out small civil work/ petty contracts.

The corresponding incomes in respect to these

amounts have already been offered to tax in our

Profit & Loss Account for the relevant assessment

Shiv Kumar Bansal and Smt. Laxmidevi Bansal year, therefore this cannot be the unexplained

investment. Consequently, none of the cheque

amounts received by the appellant can be treated

as undisclosed investment u/s 69. Your Honour is therefore requested to delete the additions made on this account.

There is an addition of Rs. 57,70,000/-- on account

of cash depositions in bank account of the appellant. All these amounts are preceded by cash

withdrawals from bank, and such cash

withdrawals and depositions were also reflected in Cash Book furnished before the A.O. However, A.O.

has not accepted those transactions and decided to make the additions. A.O. has not found any defect

in the documents and records furnished before him,

yet he decided not to accept those transactions and treated them as undisclosed investments u/s 69. Shiv Kumar Bansal and Smt. Laxmidevi Bansal Even otherwise, if "peak credit" of the amounts

deposited in bank account is calculated, it shall be much less than the sum of Rs. 57,70,000/--, which has been added as undisclosed investment by the A.O. It is undisputed that the amounts were withdrawn from the bank account but not used for any other purpose, and A.O. has not brought

anything on record to show the utilisation of such cash withdrawal for any other purpose. It is important to note that A.O. has given credit of Rs.

10,20,000/- for the preceding withdrawals, but he

has not given credit for other preceding

withdrawals without giving any reasons for the same. Therefore, as an alternative plea, only the peak balance can be added to the income of the appellant.

Therefore, Your Honour is requested to delete the Shiv Kumar Bansal and Smt. Laxmidevi Bansal addition of cash deposits in bank account, as the same was well explained during the course of assessment proceedings.”

Representative opposed the submissions and supported the orders of the lower authorities .

authorities. It is contended that all the amounts preceded

by cash withdrawals shown in the Bank account and such cash withdrawals and deposits were duly reflected in the cash book and furnished before the AO. It is contended

that even if it is assumed that the deposits are unexplained, even in that event, the addition of peak credit

can only be sustained. The Ld. Counsel for the assessee

further submitted that the authorities below have not appreciated the details filed by the assessee. We find that Shiv Kumar Bansal and Smt. Laxmidevi Bansal the assessee has furnished details in the form of Bank

statement, balance sheet. We find merit in the contention

of the assessee that the AO ought to have considered these

details. We, therefore, looking to the totality of facts and circumstances of the present case, deem it proper to set-

aside the impugned order and restore the issue to the file of AO to decide it afresh. The AO is directed to verify the details filed by the assessee and also consider the peak

credits. In that event, if the AO finds that there are certain

unexplained investment and also finds that there are deposits and withdrawals in the Bank statement, he would

compute the peak credit and make addition to the extent of peak credits. However, if he finds that the deposits are explained by the evidence filed by the assessee, he would

delete the addition.

Shiv Kumar Bansal and Smt. Laxmidevi Bansal