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Facts
The assessee's appeal pertains to AY 2013-14. The Assessing Officer (AO) made an addition of Rs. 37,70,956/- on account of alleged cash deposits. The CIT(A) partly allowed the appeal, reducing the addition to Rs. 2,52,953/- for trading activity and confirming the addition of Rs. 5,56,800/- for unexplained cash deposits.
Held
The Tribunal held that the assessee failed to provide a satisfactory explanation for the cash deposits of Rs. 5,56,800/- as the cash book produced was self-generated and unreliable. The Tribunal upheld the addition made by the AO and confirmed by the CIT(A).
Key Issues
Whether the cash deposits of Rs. 5,56,800/- were satisfactorily explained by the assessee, and whether the cash book submitted as evidence was reliable.
Sections Cited
147, 144, 69A, 115BBE, 250, 44AD, 234A, 234B, 234C, 148, 288
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by Assessee against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 for the A.Y.2013-14 dated 02.12.2024, emanating from order u/s.147 r.w.s 144 of the Income Tax Act, 1961, dated 28.09.2021. The Assessee has raised following grounds of appeal :
“1.1. The Ld AO passed the Assessment Order U/s. 147 r.w.s. 144 of the Income Tax Act, 1961 under DIN ITBA/AST/S/147/2021- 22/1035952948(1), Assessing Alleged Income at Rs. 37,70,956/-, being Alleged Addition on account of Alleged Cash Deposited treated as Alleged Income U/s.69A rws. 115BBE of the Income Tax Act, 1961, thereby resulting in Alleged Disputed Demand of Rs. 34,95,626/- 1.2. The Hon'ble CIT(A) decided on merits vide CIT(A) Order U/s 250 of the Income Tax Act, 1961 dated 02-12-2024 that out of the Alleged Addition of Rs. 37,70,956/-, a sum of Rs. 31,61,921/- was to be taxed on presumptive manner U/s 44AD of the Act, thereby an amount of Rs. 2,52,953/-was held to tax. The balance of Rs. 5,56,800/- was Alleged Cash Deposited treated as Alleged Income U/s.69A r.w.s.115BBE of the Income Tax Act, 1961, which was confirmed by the Hon'ble Commissioner of Income Tax (Appeals), National Faceless Appeals Centre, Delhi (NFAC) 1.3. Without prejudice to the above, the Hon'ble Commissioner of Income Tax (Appeals), was not justified in confirming the Addition of Rs. 5,56,800/-as Alleged Income U/s 69A of the Income Tax Act, 1961 as the said Cash Deposit was out of the opening Cash in Hand Balance of the Appellant as on 01/04/2012 & from the Total Cash Withdrawn in FY 2012-13. PRAYER The part Alleged Addition as per Assessment Order & partly confirmed by CIT(A) Order of Rs. 5,56,800/- having been fully explained before the lower Authorities, the same be DELETED, ON MERITS.
Your Appellant denies any Liability towards Interest/s Charged U/ss.234A, 234B, 234C and other applicable Provisions of the Act, The said Interest's be directed to be deleted and/or re-worked basis the outcome of this Appeal.
Your Appellant craves leave, to add to, vary, amend, modify or alter, the aforesaid grounds and/or adduce further evidence, before or at the time of hearing.” Submission of ld.AR : 2. Advocate-Mr.Mohammed Shahab Khan has filed a Vakaltnama stating that he is an Advocate and duly qualified u/s.288 of the Income Tax Act, to represent the case of the Assessee. Assessee has authorised Mr.Mohammed Shahab Khan to represent his case.
2.1 Ld.AR took us through the relevant paragraphs of the ld.CIT(A)’s order. Ld.AR pleaded that the amount of Rs.5,56,800/- was available with the assessee as on 01.04.2012 and same amount was deposited in the bank. Ld.AR invited our attention to the copy of the cash book filed by the assessee from page no.16 to 22 of the paper book. Ld.AR therefore, explained that source of cash deposits of Rs.5,56,800/- is duly explained. Ld.AR without prejudice argued that if the explanation is not acceptable, then 8% of Rs.5,56,800/- may be added.
Submission of ld.DR : 3. Ld.DR for the Revenue relied on the order of the Assessing Officer and ld.CIT(A).
Findings &Analysis : 4. We have heard both the parties and perused the records. In this case, Assessee had not filed Return of Income for A.Y.2013-14. The Assessing Officer received information regarding cash deposits made by assessee, therefore, Assessing Officer issued notice u/s.148 of the Act, on 04.03.2020 with the prior approval of the Competent Authority. In response to the notice u/s.148 of the Act, Assessee has not filed any Return of Income. Then, various notices were issued by the Assessing Officer which remain non-complied. However, on 24.09.2021, Assessee filed a reply. Vide the said reply dated 24.09.2021, Assessee claimed that Assessee is in the business of sand supply. Assessee further claimed that on 30.03.2021, Assessee had filed Return of Income and claimed profit u/s.44AD of the Act. Vide submission dated 24.09.2021, Assessee specifically claimed that Assessee had not maintained books of accounts.
4.1 It is noted by the Assessing Officer in the Assessment Order that during the year, Assessee had deposited cash of Rs.37,70,956/- in his Savings Bank Account maintained with Annasaheb Savant Co-operative Urban Bank Limited. The Assessing Officer made an addition of Rs.37,70,956/- after considering the submission of the Assessee.
Aggrieved by the assessment order, Assessee filed appeal before the ld.CIT(A). Ld.CIT(A) has considered the submission of the Assessee and partly allowed the appeal. The relevant paragraph 5.4 and 5.5 of the order of the ld.CIT(A) are reproduced here as under : “5.4 It is also noticed from the assessment order that the appellant has made purchases on various dates and the payments were made through his bank account (Urban Bank, Mahad). It is also noticed that out of sales made, there was one instance of sale by the appellant through the cheque. Accordingly, it is inferred that the appellant was engaged in the said business activity of trading sand during the year. Hence, I am of the considerate view that the income earned on the said trading activity can be computed as per the provisions of section 44AD of the Act. Thus, the income of the said trading activity is computed @ 8% of the turnover of Rs.31,61,921/-. Accordingly, the appellant is liable to pay tax on presumptive manner u/s 44AD of the Act on the amount of Rs.2,52,953/-(8% of Rs.31,61,921/-).
5.5 With reference to the remaining cash deposit of Rs.5,56,800/-the appellant submitted that, the same was on account of withdrawal of cash from his bank account on various dates. Whereas, the appellant did not furnish the reconciliation for the cash withdrawn by the appellant and the corresponding deposit of the same. Further, the appellant could not provide plausible explanation for re-depositing the said cash before the AO and also during the appellant proceedings. In view of the said facts and circumstances of the case, I am of the opinion that, the appellant did not satisfactorily explain the source of the said cash deposits of Rs.5,56,800/- Hence, the addition made by the AO on the said cash deposit of Rs.5,56,800/- in sustainable. Therefore, the grounds of appeal filed by the appellant is partly allowed.”
5.1 Thus, the issue involved before us is addition of Rs.5,56,800/-. Ld.AR submitted that there was opening cash balance and Rs.5,56,800/- was deposited out of opening cash balance. To substantiate the opening cash balance, ld.AR filed copy of cash book in the paper book. However, assessee vide submission dated 24.09.2021 has admitted that Assessee had not maintained books of accounts. Thus, during the assessment proceedings, Assessee has admitted that he had not maintained books of accounts. Therefore, the submission of ld.AR and reliance placed on so-called cash book, cannot be accepted. The assessee cannot be allowed to blow hot and cold. Assessee has also not filed any Return of Income for A.Y.2012-13 to demonstrate the so-called opening cash balance. The document claimed to have been filed as cash book in the paper book is a self-generated document. We have carefully studied the so-called cash book which is at page no.16 to 19 of the paper book. It is noted that as per the so-called cash book, from 01.04.2012 to 30.04.2012, there were cash deposits claimed as sales. There is the only one entry of expenditure of Rs.3,000/- under the head “Salary”. Thus, apparently, in the month of April, Assessee has not incurred any expenditure for the purpose of business. Similarly, in the month of May 2012, on 31.05.2012 salary of Rs.3,000/- debited, it means that in the month of May 2012, there was no expenditure for the purpose of business other than Salary. It is noted that on 31.03.2013, Assessee has debited Travelling Expenditure, Telephone Expenditure, Professional Expenses, Electricity Charges, Data Processing Charges, Miscellaneous Expenditure. It means, the entire expenditure which was said to have been incurred for the purpose of business including the day to day expenditure like Travelling, Data Processing, Monthly Electricity Bill etc., have been debited on the last day in the so-called cash book. This explains that the entries in the cash book are not reliable. Therefore, the so-called cash book even for this reason is not reliable.
In these facts and circumstances of the case, we agree with ld.CIT(A) and uphold the addition of Rs.5,56,800/-.
6.1 Since the assessee has not maintained any books of accounts, the ld.CIT(A) was right in applying the rate of 8% on the turnover. We also agree with the ld.CIT(A) in applying the rate of 8% on the turnover of Rs.31,61,921/-. Accordingly, we uphold the addition of Rs.2,52,953/-.
6.2 Accordingly, for all the reasons discussed above, Ground No.1.1, 1.2 and 1.3 raised by the assessee are dismissed.
The Assessing Officer has rightly charged the interest u/s.234A, 234B, 234C of the Act. The ld.AR has not pointed out any discrepancy during the hearing qua interest charged. Accordingly, Ground No.2 raised by the assessee is dismissed.
Ground No.3 is general in nature. Assessee has not amended, modified, altered grounds. Accordingly, Ground No.3 is dismissed.
8.1 Accordingly, Grounds of appeal raised by the Assessee are dismissed.
In the result, appeal of the assessee is dismissed. Order pronounced in the open Court on 22 July, 2025.