MS. SIMONE KHUSHROO MEHER,MUMBAI vs. ACIT 16(2), MUMBAI

During assessment proceedings, it transpired that the assessee deposited cash of Rs.9 Lacs on 10/11/2009 in one of savings bank account maintained with Standard Chartered Bank, Breach Candy, Mumbai. Accordingly, the assessee was directed to substantiate the source of cash deposit. The assessee attributed Rs.5 Lacs to withdrawals made in earlier years whereas the balance of Rs.4 Lacs was stated to be received in gifts from relatives. The cash summary for financial year 2009-10 was produced before Ld. AO which was as follows: - No. Particulars Amt. (Rs.) 1. Opening Balance As on 01/04/2009 2,52,500/- 2. Add : Cash Withdrawals from Banks 12,68,036/- 3. Add : Cash Gifts 4,00,000/- 4. Total (A) 19,20,536/- 5. Less : Cash Household expenses 9,38,500/- 6. Less : Cash re-deposited in bank 9,45,000/- 7. Closing Balance As on 31/03/2010 37,036/- However, finding certain discrepancies in assessee’s explanations, the amount of Rs.9 Lacs was added to the income of the assessee.

Before Ld. CIT(A), the assessee furnished date-wise details of deposits and withdrawals for financial year 2008-09. The Ld. CIT(A), upon perusal of documents, observed that the assessee had closing cash as on 31/03/2009 for Rs.2.52 Lacs. The cash receipts in financial year 2009-10 were Rs.19.20 Lacs whereas cash expenses were Rs.18.83 Lacs leaving closing cash balance of Rs.0.37 Lacs. Therefore, a conclusion was reached by Ld. CIT(A) that no cash was available with the assessee for redeposit into bank from earlier cash withdrawals after meeting household expenses. Therefore, the addition to the extent of Rs.5 Lacs was confirmed. To support the cash gifts, the assessee filed Ms. Simone Khushroo Meher Assessment Year: 2010-11 confirmations of the relative donors and successfully established the identity and creditworthiness of the donors. Therefore, the addition to the extent of Rs.4 Lacs was deleted but the balance addition of Rs.5 Lacs was confirmed. Aggrieved, the assessee is in further appeal before us.

Upon perusal of assessee’s computation of income, we find that the assessee has already offered interest income earned from savings bank account maintained with Standard Chartered Bank and the same is not an undisclosed account which is also evident from assessee’s Balance Sheet as on 31/03/2010 wherein this account has been reflected.

We find that the assessee has opening & closing cash balance of Rs.2.52 Lacs & Rs.0.37 Lacs as per its Balance Sheet as on 31/03/2009 & 31/03/2010. The perusal of summary cash deposits and withdrawals for the year under consideration, as placed on record, would support the fact that the assessee had cash availability of Rs.19.20 Lacs during the year which was used to meet average household expenses of Rs.9.38 Lacs and the balance Rs.9.45 Lacs was re-deposited in the bank account. The Ld. CIT(A), in our opinion, erred in noting that the household expenditure was Rs.18.83 Lacs as against the fact that this amount include the cash re-deposited by the assessee in her bank account. Hence, the source of cash deposit, in our opinion, was well documented and sufficiently explained by the assessee. Therefore, on the facts and circumstances of the case, the addition of Rs.5 Lacs as confirmed by Ld. CIT(A) could not be sustained. We order so.

Ms. Simone Khushroo Meher Assessment Year: 2010-11 6. Resultantly, the appeal stands allowed. Order pronounced on 12th January, 2021.