RAJKUMAR K. DOSHI HUF,PUNE vs. ITO, WARD 14(5), PUNE, PUNE

Assessee has raised following grounds of appeal : “On facts and in law, 1] The Id. CIT(A) erred in confirming the addition of Rs. 14,00,000/- made on account of unexplained money u/s. 69A r.w.s. 115BBE of the Act.

Brief facts of the case are that the assessee is a Hindu Undivided Family (HUF) and furnished return of income for the A.Y. 2017-18 on 14.02.2018 declaring income of Rs.2,98,310/-. After the case selected for scrutiny through CASS valid notices u/s.143(2)/142(1) were served upon the assessee. As per the information, assessee was found to have deposited Rs.14.00 lakh in the bank account maintained with Central Bank of India during the demonetization period.

Aggrieved assessee preferred appeal before the ld.CIT(A) reiterating the same submissions and also filing the details of cash in hand available for depositing in its bank account held with Central Bank of India during the demonetization period however ld.CIT(A) affirmed the view of the AO and dismissed the assessee’s appeal.

Aggrieved assessee is now in appeal before this Tribunal.

Ld. Counsel for the assessee referring to the paper book containing 212 pages stated that the assessee is maintaining details of cash book from past many years and the major source of alleged cash deposit is from the refund of share application money received from PTCPL and accumulated income of past many years. He further submitted that the details of PTCPL filed before the lower

On the other hand, ld. Departmental Representative vehemently argued supporting the orders of the lower authorities.

I have heard the rival contentions and perused the record placed before me. I notice that the assessee is a HUF and Karta of the HUF is director in Pratap Tea Company Pvt. Ltd. The only issue that arises for my consideration is whether the ld.CIT(A) was justified in affirming the action of the AO making addition of Rs.14.00 lakh alleging to be unexplained cash deposit u/s.69A of the Act along with invoking section 115BBE of the Act. It has been argued by ld. Counsel for the assessee that the source of alleged cash deposit mainly includes Rs.12,61,880/- on account of refund of share application money along with cash out of other accumulated income of past many years and the opening cash balance as on 01.04.2016 was Rs.14,94,983/- and the same was the source of the alleged cash deposit. The assessee has furnished the cash book for F.Yrs. 2013- 14 to 2016-17. During F.Y. 2013-14, assessee received refund of share application money of Rs.12,61,880/- on 20.08.2013. The said sum was given by the assessee during F.Y. 2010-11 when the company needed funds for carrying out the business activity and was interested in issuing the equity shares. However, subsequently during F.Y. 2013-14 when it was found that the business was not 5 Rajkumar K. Doshi moving in the positive direction due to stiff competition and there was lack of promising few projects, it was decided to refund the share application money pending for allotment and vide resolution dated 12.07.2013 along with other shareholders assessee HUF has also refunded the amount of Rs.12,61,880/-. This transaction of refunding of share application money has been duly incorporated in the audited financial statement of PTCPL for F.Y. 2013-14. It is also noticed that PTCPL has furnished its income-tax return and annual return of F.Y. 2013-14 and also affirmed this fact in the reply furnished to the notice issued u/s.133(6) of the Act. PTCPL has verified this fact of refunding of share application money to the assessee.

Now the only reason observed by the lower authorities denying the claim of the assessee is that why the cash in hand was kept for such a long time. I however fail to find any merit in such observation of lower authorities because unless and until the assessee is unable to explain the source of income, doubts cannot be raised for keeping cash in hand from declared sources for long time. Since assessee in the instant case has successfully explained the source of 6 Rajkumar K. Doshi alleged cash deposit which is from Cash in hand from explained and genuine source, I therefore fail to find any merit in the finding of the ld.CIT(A) and the same deserves to be set-aside and I am inclined to hold that since the assessee has successfully explained the source of alleged cash deposit of Rs.14.00 lakh no addition u/s.69A r.w.s.115BBE of the Act is called for. Impugned addition stands deleted and Grounds of appeal raised by the assessee are allowed.

In the result, the appeal of the assessee is allowed.

अपीलाथ / The Appellant. 2. यथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “(SMC)” बच, पुणे/ DR, ITAT, “(SMC)” Bench, Pune. 5. गाड फ़ाइल / Guard File. आदेशानुसार / BY ORDER,