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Facts
The assessee deposited Rs. 8.16 lakhs in bank accounts during the demonetization period in November 2016. The assessee claimed the source of these deposits was Rs. 15 lakhs withdrawn from a bank in March 2016, originating from a Rs. 20 lakh loan for a cold storage business. Both the Assessing Officer (AO) and the ld. CIT(A) rejected this explanation, making and confirming an addition of Rs. 8.00 lakhs as unexplained cash deposits.
Held
The Tribunal upheld the addition of Rs. 8.00 lakhs, affirming that the assessee failed to provide satisfactory evidence for the source of the cash deposits. The Tribunal found no reason to interfere with the ld. CIT(A)'s order, concluding that the amount could not be considered as deposited from past cash withdrawals or justified as cash-in-hand.
Key Issues
Whether the assessee provided a satisfactory explanation for the source of Rs. 8.00 lakhs cash deposits made during the demonetization period, specifically whether they originated from prior bank withdrawals or unexplained cash-in-hand, considering a previously taken business loan.
Sections Cited
250
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG
आदेश आदेश/O R D E R आदेश आदेश
The above appeal has been preferred by the assessee against order passed by the Ld.Commissioner of Income-Tax(Appeals), ADDL/JCIT(A)-5, Kolkata [hereinafter referred to as “ld.CIT(A)] dated 09.12.2024 under section 250 of the Income Tax Act, 1961 ("the Act" for short) for the assessment year 2017-18.
The assessee, in this appeal, is aggrieved by the action of the ld.CIT(A) in confirming addition made by the Assessing Officer (“AO” for short) of Rs.8.00 lakhs as unexplained cash deposits in the bank account of the assessee during the demonetization period.
The appeal of the assessee is time barred by 39 days. A separate application has been filed for condonation of delay. Considering the averments made in the application, the delay in filing the appeal before the Tribunal is condoned.
2 4. Brief facts of the case are that the assessee had deposited an amount of Rs.8,16,500/- in his bank accounts with The Kalupur Comm. Co-op. Bank Ltd. and Naroda Nagrik Cooperative Bank Ltd., Ahmedabad, in the month of November, 2016 i.e. during the demonetization period. On being asked to explain the source of deposits, the assessee explained that the above cash was deposited out of past withdrawals from the bank of Rs.15.00 lakhs on 19.3.2016. The AO, however, observed that from the record it revealed that the assessee has taken loan of Rs.20 lakhs on 15.3.2016 and out of that he had withdrawn an amount of Rs.15 lakhs on 19.3.2016. He also observed that from the above facts, it revealed that the assessee was in need of cash, and hence he had taken loan on interest in March, 2016, which might have been consumed by him. The AO, further, noted that even before the demonetization period also, the assessee had deposited cash in his bank account of Rs.9,03,900/-, hence, it was hard to believe that the said balance of Rs.8.00 lakhs was out of cash withdrawals of Rs.15 lakhs on 19.3.2016. He, therefore, made the impugned addition of Rs.8.00 lakhs into the income of the assessee. Being aggrieved of the said order, the assessee went in appeal before the ld.CIT(A).
The ld.CIT(A) has given further opportunity to the assessee to explain the source of deposits, and asked the assessee to furnish the following documents:
1. 1. Your source of income during financial year 2016-17 with necessary evidence.
2. Names and PANs of all the dependent members in your family during financial year 2016-17.
3. Average household expenses per month during financial year 2016- 17.
4. Date wise cash flow statement / cash account from 1/4/2014 to 31/3/2017.
3 6. However, since the assessee failed to furnish the aforesaid documents and did respond to the notice issued by the ld.CIT(A), he confirmed the addition so made by the AO. Being aggrieved by the order of the ld.CIT(A), the assessee is in appeal before this Tribunal.
I have heard rival submissions and gone through the record. The case of the assessee is that the assessee had taken loan of Rs.20.00 lakhs from the bank which was deposited in his saving bank account on 15.3.2016. It is commonly known that the bank advances loan, considering the need of the applicants for the specific purpose. It was mentioned that the assessee had obtained loan of Rs.20 lakhs on account of cold-storage, which apparently showed that the assessee was indulging in the some activity and the assessee had obtained loan from the bank for the some specific purpose, which in the case of the assessee has been mentioned as cold storage, “S.R. Cold Storage”. In this case, apart from deposit of Rs.8.00 lakhs, during the month of November, 2016, the assessee had deposited an amount of Rs.9.00 lakhs, which is before start of the period of demonetization. Hence, under this circumstance, it cannot be said that the aforesaid amount of Rs.8.00 was deposited out of the past cash withdrawals. No justification could be given by the ld.counsel for the assessee for such cash, as cash-in-hand. Therefore, I do not find any reason to interfere with the order of the ld.CIT(A) in this respect, and the same is upheld.