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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI V. DURGA RAO & SHRI G. MANJUNATHA
order passed by the learned Commissioner of Income Tax (Appeals)-2, Chennai, dated 23.05.2019 and pertains to assessment year 2016-17.
2. We find that appeal filed by assessee is barred by limitation of 4 days for which necessary petition along with affidavit for condonation of delay explaining reasons for delay has been filed. The learned AR submitted that due to heavy rain at Chennai, he could not file appeal within the time allowed under the Act, hence prayed that delay may be condoned.
Having heard both sides and considered petition filed by the assessee for condonation of delay, we are of the considered view that reasons given by assessee for not filing the appeal within the time allowed under the Act comes under reasonable cause as provided under the Act for condonation of delay and hence, delay in filing of above appeal is condoned and appeal filed by the assessee is admitted for adjudication.
The assessee has raised following grounds of appeal:-
“ 1. For that the Learned Assessing Officer erred in adding Rs.11,09,900/- unexplained cash credit is duly reflected in bank statement and necessary explanation has been given to learned assessing officer during the assessment, also in the case of re: CIT, Poona V. Bhaichand H. Gandhi 141 ITR 67 (Bom) - it was held that the pass book supplied by the bank to the assessee cannot be regarded as the book of the assessee, that is, a book maintained by the assessee or under his instructions. Therefore a cash credit for the previous year shown in the assessee’s bank statement does not fall within the ambit of Section 68 of Income Tax Act, 1961.
The common grievance of the assessee in the impugned appeals relates to the additions made u/s 68 of the Income-tax Act, 1961 in respect of the amounts of cash found to be deposited in the bank accounts of the assessee. The Assessing Officer has erred in law in making addition being cash deposits in the bank accounts u/s 68 of the Act despite the fact that the appellant admittedly does not maintain books of account and, therefore, the said charging of section 68 cannot be pressed to service.”
Brief facts of the case are that the assessee is an individual derives income from salary and other sources filed his return of income for assessment year 2016-17 on 31.03.2018 declaring total income of Rs.11,58,060/-. The case was taken up for scrutiny and during the course of assessment proceedings, the Assessing Officer noticed that the assessee has purchased property at Jafferkhanpet, Chennai, for total consideration of Rs.78,84,530/- and hence, called upon the assessee to explain source for investments for purchase of property. In response, the assessee submitted that he had purchased property out of housing loan from India Bulls, gift from his father and also from own savings. The Assessing Officer, however, was not convinced with explanation filed by the assessee and according to him, although the assessee claims to have received gift from his father and had own savings, but failed to file necessary evidences and hence, made addition of Rs.25,61,530/-. Similarly, the Assessing Officer noticed that the assessee has made cash deposits on various dates into savings bank account maintained with HDFC bank and after considering relevant explanation of the assessee, the Assessing Officer has made addition of Rs.11,09,900/- towards cash deposits on the ground that no evidence has been filed by the assessee to prove source for cash deposits.
The assessee carried matter in appeal before first appellate authority. The learned CIT(A) for the reasons stated in his appellate order dated 25.03.2019 deleted additions made towards gift received from father for purchase of property and also source explained out of past savings, however, he has sustained addition made for cash deposits in savings bank accounts on the ground that the assessee has not given proper explanation for depositing huge cash into savings bank accounts on periodic basis. Aggrieved by the learned CIT(A) order, the assessee is in appeal before us.
The learned A.R for the assessee referring to paper book filed by the assessee, more particularly page No.5, submitted that as per Annexure-1, the assessee has withdrawn Rs.15,90,600/- from Citi bank account as well as HDFC bank account and same has been deposited into other bank account and thus, it is incorrect on the part of the Assessing Officer to allege that assessee has not explained source for cash deposits. The learned AR further referring to bank statements of HDFC bank and Citi bank submitted that on 16.05.2015, the assessee has withdrawn cash of Rs.4,50,000/- from HDFC bank account and on the same date, deposited into Citi bank account. Similarly, the assessee withdrew a sum of Rs.90,000/- on 27th August, 2015 from savings bank account of Citi bank and on the same date deposited into HDFC bank account. Likewise, he has explained each and every cash deposit in the savings bank accounts. However, the Assessing Officer as well as learned CIT(A) ignored all details filed by the assessee and has made additions without any valid reason.
The learned DR, on the other hand, supporting order of the learned CIT(A) submitted that it is strange to accept arguments of the learned AR for the assessee that cash has been withdrawn from bank and re-deposited into bank account in subsequent dates. If you go by facts brought out by the Assessing Officer, it is very clear that the assessee has deposited cash into bank account, when balance in bank accounts come to below minimum required amount and thus, it is incorrect to accept arguments of the assessee that the source for cash deposits into bank accounts is out of past withdrawals from same bank account.
We have heard both the parties, perused material available on record and gone through orders of the authorities below. The issue that needs to be resolved in given facts and circumstances of the case is whether cash deposits of Rs.11,09,900/- has been satisfactorily explained by the assessee with necessary evidences. We find that the assessee has maintained three different bank accounts with HDFC bank and Citi banks. The assessee has withdrawn on various dates a sum of Rs.15,90,600/- from two bank accounts. The assessee had also deposited a sum of Rs.11,09,900/- on different dates.
If you go through cash withdrawal from banks in light of cash deposits into HDFC account and Citi banks, we find that on three occasions the assessee has withdrawn amount from one bank account and deposited into another bank accounts.
Likewise, other cash deposits into bank account has been explained out of past withdrawals, either from same bank account or from different bank account. From the above, what is clear is the assessee is having enough source to explain cash deposits into bank account. It is well settled principle of law that when there is cash withdrawal from same bank account or different bank account on earlier occasion, then same can be considered as source for cash deposit in subsequent dates unless earlier cash withdrawals were used for some other purpose. In this case, the Assessing Officer never brought on record any reason to dispel arguments of the assessee that cash withdrawal on earlier occasion was used for cash deposits in subsequent dates into same bank account.
Therefore, we are of the considered view that unless the Assessing Officer demonstrates with evidence that cash withdrawal from same bank account on earlier occasion has been used for any other purpose, availability of source cannot be ignored. Hence, we are of the considered view that the Assessing Officer has erred in making additions towards cash deposits into savings bank account. The learned CIT(A) without appreciating facts has simply upheld additions made by the Assessing Officer. Hence, we direct the Assessing Officer to delete additions made towards cash deposits into savings bank account.