SHRI SARDUL SINGH,BHOPAL vs. THE ITO 1(2), BHOPAL

Sardul Singh ITA 697/2014 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE Before Shri Kul Bharat, Hon’ble Judicial Member and Shri Manish Borad, Hon’ble Accountant Member

ITA No. 697/Ind/2014 A.Y. 2009-10 Sardul Singh Bhopal ::: Appellant Vs ITO 1(2) Bhopal ::: Respondent Appellant by Shri N.D. Patwa Respondent by Shri K.G. Goyal Date of hearing 5.6.2018 Date of pronouncement 8.6.2018

O R D E R PER SHRI MANISH BORAD, AM

This appeal of the assessee relating to the

assessment year 2009-10 is directed against the order of

the Commissioner of Income Tax (Appeals)-I, Bhopal, dated

26.8.2014 which is arising out of the order u/s 143(3) of

the Act dated 28.12.2011 framed by the ITO 1(2), Bhopal.

Sardul Singh ITA 697/2014 2. In this appeal the assessee has taken the following

grounds :-

“On the facts and in the circumstances of the case, the

learned CIT(A) erred in confirming the addition

ofRs.3,75,500/- being cash deposited in HDFC Bank

during F.Y. 2008-09 without considering the explanation

offered by the appellant properly and without

considering the fact that the said deposit was made out

of cash withdrawals from the appellant’s bank account

with ICICI Bank and Punjab National Bank on various

dates.

Thus, the order of the ld. CIT(Appeal) confirming the

addition of Rs. 3,75,500/- is unjust, unfair and bad in

law and thus deserves to be quashed.”

that the assessee is an individual engaged in the business

Sardul Singh ITA 697/2014 of transportation. Income of Rs. 25,493/- is declared in the

return of income filed on 30.3.2010. The case selected for

scrutiny. Notices u/s 143(2) and 142(1) of the Act were

duly served upon the assessee. The assessee was carrying

on transportation business having four trucks and income

was offered u/s 44AE of the Act as the assessee was not

required to maintain regular books of accounts. However,

the Assessing Officer called for information about the total

turnover as well as cash deposited in various bank

accounts. However, the Assessing Officer mentioning

reason that the assessee has not supplied necessary

information completed the assessment after making

addition by applying net profit rate of 10% thereby making

the addition of Rs. 1,74,480/- and also making the

addition of Rs. 3,75,500/- as undisclosed income for the

alleged cash deposited in HDFC Bank Ltd. The income

assessed at Rs. 8,04,910/-. The assessee took the matter

Sardul Singh ITA 697/2014 before the learned Commissioner of Income Tax (Appeals)

and partly succeeded as the learned Commissioner of

Income Tax (Appeals) deleted the addition of Rs. 1,74,480/-

by accepting the assessee’s plea of being covered u/s 44AE

of the Act relating to presumptive income. As regards the

addition of Rs.3,75,500/- the assessee filed complete

details mentioning that the source of deposit in HDFC

Bank Limited was from regular cash withdrawals from

other banks accounts maintained with ICICI Bank and

Punjab National Bank. However, the learned learned

Commissioner of Income Tax (Appeals) confirmed the

addition of Rs. 3,75,500/-.

raising sole grievance against the addition of Rs.

3,75,500/- confirmed by the learned Commissioner of

Income Tax (Appeals).

Sardul Singh ITA 697/2014 5. The learned counsel for the assessee referring to the

submissions made before the lower authorities as well as

the paper book showing details of income as well as bank

accounts, submitted that the assessee’s business is of

plying trucks. The receipts are through account payee

cheques which are deposited in ICICI Bank, HDFC Bank

and Punjab National Bank. The assessee used HDFC bank

credit card for paying diesel charges and for this reason

cash was regularly withdrawn from ICICI and Punjab

National Bank and deposited in HDFC Bank. He further

mentioned that for the year under consideration a sum of

Rs. 2,93,000/- and Rs. 1,19,000/- was withdrawn from

ICICI Bank and Punjab National Bank respectively which

aggregated to Rs. 4,12,000/- and was the source of the

cash of Rs. 3,75,500/- deposited in HDFC Bank.

supporting the orders of the authorities below.

Sardul Singh ITA 697/2014 7. We have heard both the parties and perused the

material available on record. The issue before us relates to

alleged cash deposited in HDFC Bank on various dates

during the year totaling to Rs. 3,75,500/-. Both the lower

authorities did not appreciate the explanation of the

assessee showing the source of cash withdrawals from

ICICI Bank and Punjab National Bank and treated it as

unexplained. A perusal of record shows that the revenue

authorities have not raised any objection about the gross

receipts of the assessee which by and large are through

account payee cheques only. The assessee has duly

submitted copies of bank statements of all the banks before

the Assessing Officer in detail which are also forming part

of the order of the learned Commissioner of Income Tax

(Appeals) at pages 7 & 8 giving datewise details of cash

withdrawn from ICICI and Punjab National Bank and the

cash deposited in HDFC Bank. The total of cash

Sardul Singh ITA 697/2014 withdrawal from ICICI Bank and Punjab National Bank is

Rs.4,12,000/- and cash of Rs. 3,75,500/- has been

deposited in HDFC Bank. The Assessing Officer denied the

benefit to the assessee quoting that no details were

provided in the assessment proceedings. However, the

learned Commissioner of Income Tax (Appeals) accepted

that the details were furnished before him but he could not

accept the contention of the assessee by way of taking a

view that the assessee should have required cash for

meeting other expenses for maintenance of truck other

than diesel and there was no such source of cash with the

assessee except the withdrawals from ICICI Bank and

Punjab National Bank.

placed at pages 14 to 21 of the paper book find merit in the

contention of the learned counsel for the assessee. We

observe that on various dates when the cash was deposited

Sardul Singh ITA 697/2014 just after few days of the cash deposit the assessee has

utilised the balance towards payments of instalments of

Chola Mandalam Finance Company as well as payment of

credit cards. We take few of the instances –

(i) Cash of Rs. 30,000/- deposited on 30.6.2008 in HDFC Bank and 2.7.2008 Rs. 23,343/- has been paid to finance company towards loan instalment.

(ii) Cash of Rs.49,500/- deposited on 17.9.2008 and On 30.9.2008 Rs. 70,000/- paid towards credit card Expenses.

(iii) Rs.50,000/- deposited on 8.10.2008 and on 9.10.2008 made Credit card payment of Rs.54,538.90 and on 10.10.2008 paid loan instalment of Rs.17,150/-. These all instances clearly show the purpose of depositing

cash in HDFC Bank. We, therefore, in the given facts and

circumstances of the case, are of the considered view that

the assessee has been successful in explaining the source

of cash of Rs. 3,75,500/- deposited in HDFC Bank account

which has come through ICICI and Punjab National Bank

and further alleged cash deposit in HDFC Bank has been

Sardul Singh ITA 697/2014 utilised towards business expenditure. We accordingly set

aside the findings of the lower authorities and delete the

addition of Rs.3,75,500/-.

Pronounced in open Court on 8th June, 2018.

Sd/- sd/-

(KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER

8 June, 2018 Dn/- Copy to – Appellant/Respodent/Pr.CIT/CIT(A)/DR/Guard File By order