AJAY MORE,BHUBANESWAR vs. ITO, WARD-3(1), BHUBANESWAR

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK

BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER

ITA No.273/CTK/2018 Assessment Year : 2015-2016

Sri Ajay More, Flat No.108, Vs. ITO, Ward -3(1), Aayakar Harapriya Apartment, Bhavan, Bhubaneswar. Vivekananda Marg, Bhubaneswar. PAN/GIR No.AQXPM 4072 F (Appellant) .. ( Respondent)

Assessee by : Shri D.Parida/C. Parida, AR Revenue by : Shri Subhendu Datta, DR

Date of Hearing : 04/09/ 2018 Date of Pronouncement : 12/09/ 2018

O R D E R Per N.S.Saini, AM This is an appeal filed by the assessee against the order of

the CIT(A)-2, Bhubaneswar dated 8.5.2018 for the assessment

year 2015-2016.

erred in sustaining the addition of Rs.6,89,000/- being cash

deposited in the bank account.

observed that the assessee has deposited cash of Rs.11,89,000/-

P a g e 1 | 11 in S.B. account No. maintained with State Bank of India, Forest

Park, Bhubaneswar. In reply to show cause notice, the assessee

submitted that the cash deposited in SBI Account No.

30374416512 was out of the previous year’s withdrawals from

the assessee’s bank account and cash loan repayment by the

following persons on different dates, who had taken the loans

from the assessee:

Sl. Name of the person Date Loan Loan No. amount amount taken repaid 1. Raunak More 7.11.2014 1,20,000

7.11.2014 1,20,000 2. Yasodadevi Mara 2.6.2014 1,50,000 11.11.2014 1,50,000 3. Sunli More 12.12.2014 80,000 1.2.2015 80,000 4. Rekha More 1.2.2015 1,50,000 2.2.2015 1,50,000

The confirmation of following persons who has repaid loan below

Rs.20,000/- was as under:

Sl. Name of the person Date Amount No. (rs.) 1. Raju Agarwal 4.6.2014 19,700 2. Sudarshan Behera 18.6.2014 17,500 3. Kedar Sahoo 7.7.2014 16,000 4. Srikant Behera 4.6.2014 17,000 5. Gangadhar Ray 4.8.2014 19,000 6. Pramod Kr Barik 8.8.2014 19,500 7. Jyoti Ranjan padhi 4.9.2014 19,000 8. Prashant Kr Rout 4.9.2014 19,000

P a g e 2 | 11

of the persons from whom the amount of loan given in earlier year

was received back with address and pan Numbers. The Assessing

Officer in order to verify the correctness of the confirmations filed

issued notice u/s.133(6) of the Act to the following persons and

obtained confirmations:

replies from four persons from whom, the assessee claimed to

have received Rs.5 lakhs in cash and deposited the same in the

bank account, accepted the same as genuine.

received loan below Rs.20,000/- aggregating to Rs.2,60,000/-,

P a g e 3 | 11 the Assessing Officer made addition on the ground that the

assessee did not file confirmation with complete addresses.

Further, the Assessing Officer also did not accept the explanation

of the assessee that balance amount of Rs.4,29,000/- deposited in

the bank account where the assessee claimed that they were

deposits out of earlier year’s withdrawals made from the bank on

the ground that it was an afterthought to adjust the undisclosed

income from other sources. The assessee produced cash book

before the Assessing Officer to explain the source of deposit in the

bank account and the same was also rejected as an afterthought.

Hence, out of total deposit of Rs.11,89,000/- in the bank account

in cash, he accepted Rs.5 lakhs and added Rs.6,89,000/- to the

income of the assessee under the head “ undisclosed income from

other sources”.

confirmations from 14 persons. The assessee has given loan in

earlier years aggregating to Rs.2,60,000/-, which was received

back during the year in cash and was the source of deposit in the

bank account.

additional evidence and the assessee has not made any

P a g e 4 | 11 application under Rule 46A of I.T.Rules, 1962 for admission of the

same. He also observed that no reasons have been cited as to

why these letters of confirmations were not filed before the

Assessing Officer. He observed that the letters of confirmation are

dated 1.4.2015 and the assessment was completed vide order

dated 28.12.2017. Hence, if the letters of confirmation were

available with the assessee on 1.4.2015, then there was no reason

for the appellant not to submit these letters of confirmation before

the Assessing Officer. Hence, he rejected the same.

claimed to be out of earlier years was not accepted on the ground

that the assessee during the year, the cash deposit of

Rs.4,29,000/- is an afterthought and that there was no evidence

for entries in the cash book and that the assessee has not given

reasons as to why the cash was withdrawn in the first place and

that the assessee has not explained his family expenses for

household expenses. Thus, he confirmed the order of the

Assessing Officer making the addition of Rs.6,89,000/.

made before the lower authorities. He filed statement together

with bank statement of SBI, showing deposit and withdrawals of

P a g e 5 | 11 cash in the bank account and submitted that it can be seen that

the amount deposited in the bank account of Rs.4,29,000/- was

out of earlier withdrawals and hence, he submitted that same

should be accepted and addition should be deleted. He submitted

that this information has been culled out from the cash book of

the assessee which were produced before the Assessing Officer

and the CIT(A) and was rejected as an afterthought. He

submitted that with regard to amount of Rs.2,60,000/- claimed to

have received back from 14 persons, it was submitted that during

the course of hearing, the Assessing did not ask for confirmation

of Rs.2,60,000/- from 14 persons. Therefore, without verifying

the same, he cannot make the addition alleging that no

confirmations and address of the persons was filed. Hence, he

prayed that the addition of Rs.6,89,000/- should be deleted.

authorities.

lower authorities and materials available on record. In the instant

case, the Assessing Officer observed that the assessee has

deposited Rs.11,89,000/- in S.B. Account No.30374416512

maintained with State Bank of India, Forest Park Branch,

P a g e 6 | 11 Bhubaneswar. The Assessing Officer was satisfied with regard to

the explanation of the assessee for the source of deposit of

Rs.5,00,000/- and accepted the same. With regard to balance

amount of Rs.6,89,000/-, the Assessing Officer was not satisfied

with the explanation of the assessee regarding the source of

deposit, which was explained to be Rs.4,29,000/- out of earlier

withdrawals from the bank account and Rs.2,60,000/- being loan

advanced in earlier years to 14 persons, which was received back

in cash.

Officer.

in appeal before us.

withdrawn Rs.5,30,000/- in cash during the year out of which

Rs.4,29,000/- was deposited back in the bank account. The

Assessing Officer as well as the CIT(A) were of the view that if the

entire withdrawals were deposited back in the bank account, then

the assessee did not have sufficient amount left with him for his

household expenses. Hence, the explanation of the assessee was

not accepted. Ld A.R. of the assessee submitted before us that

P a g e 7 | 11 the assessee is aged about 46 years and has been filing his

returns of income for the last 10 years. He submitted that the

assessee has filed returns showing income for earlier assessment

years as under:

2010-2011 : Rs.1,87,153/- 2011-2012 : Rs.2,71,309/- 2012-2013 : Rs.4,37,571/- 2013-2014 : Rs.5,48,491/- 2014-2015 ; Rs.6,84,148/-

Hence, it was his submission that the assessee had sufficient

funds available out of income earned in the earlier previous years

for making deposit in the bank account. Therefore, the addition

made was not justified and should be deleted.

assessee. The assessee has shown sufficient income in the earlier

years prior to the year under appeal. The explanation of the

assessee is quite justified that the assessee had available with him

sufficient amount out of savings in the earlier years 2010-2011 to

2014-2015, which was the source of making deposit in cash of

Rs.4,29,000/- in the bank account. This has not been

controverted by ld D.R. Hence, in our considered view, the

P a g e 8 | 11 explanation of the assessee that Rs.4,29,000/- deposited in the

bank account was explained out of withdrawals of the current year

as well as savings of past years is accepted and, therefore, we set

aside the orders of lower authorities and delete the addition of

Rs.4,29,000/.

to be out of receiving back of loans advanced to 14 persons, which

were advanced below Rs.20,000/-, we find that the Assessing

Officer has observed that no confirmation or details were filed

before him during the course of assessment proceedings.

confirmations of the said 14 persons which were not accepted by

the CIT(A) on the ground that they are additional evidences filed

before him and the assessee could not explain why they were not

filed before the Assessing Officer when the assessment order is

dated 28.12.2017 and the confirmations filed before him were all

dated 1.4.2015. We also find that the assessee explained that he

has filed cash book before the Assessing Officer as well as the

CIT(A) which was not accepted by stating the same to be

afterthought. In our considered view, the Assessing Officer as

P a g e 9 | 11 well as the CIT(A) after examining the cash book of the assessee,

wherein, the source of deposit of money in the bank account was

explained has not brought any material on record to show that the

assessee could not have the amount of Rs.2,60,000/- with him to

deposit the same in the bank account. It is a settled position of

law that a plausible explanation of the assessee cannot be

rejected by the Assessing Officer without examining the same and

bringing any material on record to show that why the said

explanation was not acceptable. After considering the entire facts

and circumstances of the case, in our considered view, the

addition of Rs.2,60,000/- on account of deposit in the bank made

by the Assessing Officer and confirmed by the CIT(A) cannot be

sustained in law. We, accordingly, set aside the orders of lower

authorities and delete the addition of Rs.2,60,000/-. Thus, the

total addition of Rs.6,89,000/- is deleted.

Order pronounced on 12 /09/2018.

Sd/- sd/- (Pavan Kumar Gadale) (N.S Saini) JUDICIALMEMBER ACCOUNTANT MEMBER Cuttack; Dated 12 /09/2018 B.K.Parida, SPS

P a g e 10 | 11 Copy of the Order forwarded to : 1. The Appellant : Sri Ajay More, Flat No.108, Harapriya Apartment, Vivekananda Marg, Bhubaneswar

P a g e 11 | 11