BANSI RAM,GURGAON vs. ITO WARD 1(3), GURGAON

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-1, Gurgaon (hereinafter referred to as 'the CIT(A)') dated 18.06.2019, for assessment year 2011-12.

The assessee in appeal has raised as many as seven grounds. Grounds of appeal no. 1 and 7 are general, hence, require no separate adjudication.

In ground no. 4 of appeal the assessee has assailed addition of Rs.8,00,000/- made on account of unexplained cash deposits. 4.1. Shri Ruchesh Sinha, appearing on behalf of the assessee narrating facts of the case submits that; the assessment for AY 2011-12 was reopened and notice u/s. 148 of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’) was issued to the assessee on 20.03.2018 on the ground that there were cash deposits amounting to Rs.15,50,000/- in the bank account of the assessee maintained with Oriental Bank of Commerce. The assessee furnished cash flow statement before the Assessing Officer (AO) explaining the source of cash deposits. The AO partly accepted contentions of the assessee and made addition of Rs.8,00,000/- as unexplained cash deposits. The assessee carried the issue in appeal before the CIT(A). The CIT(A) upheld findings of the AO on this issue and confirmed addition of Rs.8,00,000/-. Hence, present appeal by the assessee. 4.2. The ld. Counsel for the assessee submitted that source of Rs.8,00,000/- cash deposits in the bank account was explained to the authorities below. Reiterating the submissions made before AO, he submitted that Rs.2,00,000/- was deposited from the opening cash in hand and family savings in the immediate preceding year. Further explained that, there were cash withdrawals of Rs.2,00,000/- on 09.03.2010 and Rs.4,00,000/- on 10.05.2019 these two withdrawals were made through cheques issued in the name of Shri Vijay Kumar and Shri Mawasi Ram, respectively. To substantiate his contention, the ld. Counsel referred to certificate (AY 2011-12) dated 18.10.2018 issued by Oriental Bank of Commerce at page 32 of the paper book. Referring to the bank certificate he submitted that the assessee had issued cheque no. 556601 of Rs.2,00,000/- to Shri Vijay Kumar on 09.03.2010 and cheque no. 556604 for Rs.4,00,000/- favouring Shri Mawasi Ram on 10.05.2010 for withdrawal of cash from assessee’s saving bank account no. 5162010004890. Now that Shri Vijay Kumar and Shri Mawasi Ram have died, therefore, no confirmations from them could be obtained.

Per contra, Shri Sanjay Kumar representing the department vehemently defending the impugned order submitted that in the absence of any cogent evidence the CIT(A) has confirmed addition of Rs.8,00,000/- He thus prayed for upholding impugned order and dismissing appeal of the assessee.

Both sides heard. The assesseee in ground no. 4 of appeal has assailed addition of Rs.8,00,000/-. The assessee has explained the source of cash deposits of Rs.8,00,000/- as under:- “i. opening cash in hand and family savings of preceding year Rs.2,00,000/-; ii. cash withdrawal vide cheque through Shri Vijay Kumar Rs.2,00,000/-; and iii. cash withdrawal vide cheque through Shri Mawasi Ram Rs.400,000/-.”

In so far as source of Rs.2,00,000/- from opening cash in hand and family savings of the preceding year is concerned, except for bald assertions no material is placed on record to substantiate the same.

Apart from above certificate no confirmations from Shri Vijay Kumar and Shri Mawasi Ram could be filed as they were stated to have died, though the assessee has not placed on record their death certificate. Considering facts and documents on record, the explanation furnished by the assessee with regard to Rs.2,00,000/- sourced from opening cash in hand and family savings of the preceding year is not accepted as it is unsubstantiated. In so far as remaining Rs.6,00,000/- is concerned, the assessee from the possible available sources i.e. bank has furnished certificate to show that amount was withdrawn by Shri Vijay Kumar and Shri Mawasi Ram on behalf of assessee from the bank. Therefore, submissions of the is accepted to that extent. Thus, addition of Rs.6,00,000/- is directed to be deleted. In the result, ground no. 4 of appeal is partly allowed.

In ground no. 6 of appeal, the assessee has assailed initiation of penalty proceedings u/s. 271(1) (c) of the Act. Challenge to penalty proceeding at this stage is premature. Hence, ground no. 6 of appeal is dismissed.