SUDHIR POPATRAO CHAUDHARI,NASHIK vs. ITO, WARD 1(1), NASHIK

ORDER

PER DR. DIPAK P. RIPOTE, AM:

1. The learned CIT(A) erred in confirming the addition u/s 69A towards alleged unexplained cash deposits by holding that the cash deposits of Rs.19,02,000 made in bank account during demonetization period represent the unexplained income of the appellant without appreciating that the said addition made by the A.O. was not justified on facts and in law

5. The appellant craves, leave to add, alter, amend and delete any of the above grounds of appeal.”

Submission of ld.AR : 2. Ld.Authorised Representative(ld.AR) for the Assessee filed a paper book. Ld.AR submitted that Assessee had filed Return of Income under section 139(1) of the Act. During the scrutiny proceedings, Assessee had explained the source of cash deposits to [A] the Assessing Officer. Ld.AR submitted that during the year, Assessee had withdrawn in cash by prematurely withdrawing the Fixed Deposits kept with Bank. During the assessment proceedings, assessee explained all these facts with evidence to the AO. Ld.AR further submitted that Assessee had withdrawn these amounts from Banks to settle his family dispute. The ld.AR submitted that there was a family dispute regarding ancestral property among the siblings. In order to settle the family dispute, Assessee was in need of cash and hence, Assessee withdrew in cash from Bank. Ld.AR invited our attention to “Souda Pouti” which is in Marthi which has been reproduced by Assessing Officer in the Assessment Order to explain the nature of family dispute. Ld.AR submitted that since family dispute was to be settled during Diwali, however, suddenly on 8th Nov, 2016 Demonetization was declared. Therefore, Assessee had to deposit the cash back in the Bank Account. Ld.AR submitted that all these facts were explained to the Assessing Officer and ld.CIT(A). However, AO made an addition of Rs.19,02,000/- under section 69A of the Act. Ld.AR submitted that the addition made is arbitrary. Ld.AR relied on the decisions of ITAT Pune Benches in [A] the case of & 775/PUN/2024 of Gopalrao Shankarrao Nagras vs. ITO, for A.Y.2015-16 & 2016-17 and in ITA No.566/PUN/2021 of Smt. Pushpalata Maruti Ghule Vs. DCIT for A.Y.2014-15. Submission of ld.DR : 3. Ld.Departmental Representative(ld.DR) for the Revenue relied on the order of Assessing Officer and ld.CIT(A).

Findings & Analysis : 4. We have heard both the parties and perused the records. Assessee had filed Return of Income under section 139(1) of the Act, declaring total of Rs.7,13,420/-. Case of the Assessee was selected for scrutiny on account of cash deposit. It is observed that admittedly, Assessee had filed elaborate explanation before ld.CIT(A) and Assessing Officer. It is also observed that Assessee had withdrawn cash by prematurely encashing the Fixed Deposits receipts kept with State Bank of India and Thane Janata Sahakari Bank Limited totalling to Rs.18,29,000/- which includes opening cash also. The details of fixed deposits have been mentioned by the Assessing Officer in the Assessment Order. Assessee had [A] submitted balance sheet during the Assessment Proceedings, but Assessing Officer rejected it stating that since assessee had been filing Return of Income under section 44AD of the Act, Balance Sheet is to be rejected. Thus, Assessing Officer has not given any valid reason for rejecting the Balance Sheet. Assessing Officer had not given any reason for rejecting the Assessee’s claim for availability of cash, whereas AO has not denied withdrawal of cash from the Bank. Thus, Assessing Officer has merely on surmises made an addition of Rs.19,02,000/- on account of cash deposits. However, it is also a fact that assessee had explained only Rs.18,29,000/- which was amount withdrawn from the fixed deposits. Assessee also claimed that remaining cash of Rs.73,000/- was available with him. However, no specific document filed to prove the same. But, Assessee has not filed any satisfactory reply for the remaining cash of Rs.73,000/-[Rs.19,02,000/- minus Rs.18,29,000/-].

4.1 ITAT Pune Bench in of Smt.Pushpalata Maruti Ghule on identical issue had held as under : “In addition, she made withdrawals date-wise totalling Rs.10,72,000/- from her bank account with total amount coming to Rs.14.34 lakh and it was out of this amount, that she deposited Rs.13.73 lakh in the bank account that has been added by the AO. The authorities below have simply brushed aside the explanation of the assessee without showing that such agricultural receipts/withdrawals from the bank were used elsewhere. Taking into consideration the entirety of facts and circumstances of the instant case, I am satisfied that the assessee has genuinely explained the source of deposits in the bank account amounting to Rs.13.73 lakh as emanating from the withdrawals made from the bank account during the same year as well as certain agricultural receipts. I, therefore, order to delete the addition.”