RANGASWAMY HANUMEGOWDA ,BANGALORE vs. INCOME TAX OFFICER WARD-3(2)(3), BANGALORE

During course of assessment proceedings, assessee furnished statements of Andhra Bank, copy of return filed for assessment year 2014-15 in HUF capacity, along with, computation statement. It was submitted by assessee that he had sufficient cash balance and due to substantial withdrawal from savings account during the year, money was later on deposited by assessee. Assessee also furnished daily cash book for relevant period before Ld.AO.

Assessee also submitted that he had huge drawings during the year and that money of HUF have been utilised for cash deposit in the bank.

In respect of syndicate bank account assessee submitted that cash was withdrawn from the bank and same was redeposited on subsequent dates. Ld. AO rejected it on the premise that these were only oral submissions without any evidence.

Ld.AO did not accept submissions of assessee and made addition in to the extent of Rs.54,86,500/-.

Aggrieved by order of Ld.AO, assessee preferred appeal before Ld.CIT(A). Before Ld.CIT(A) assessee filed cash flow statement for year under consideration and submitted that, sufficient cash was available in hands for making cash deposit in bank accounts. It was submitted that cash was withdrawn by assessee on different dates and the source of the same was cash withdrawal made by him from bank account. Ld.CIT(A) observed that, cash deposits during relevant year was Rs.54,86,500/-, whereas cash withdrawals were Rs.43,86,000/-. Ld.CIT(A), rejected contention of assessee that, only sum of Rs.11,18,225/- should be considered as unaccounted income. Ld.CIT (A) observed that, amount was being withdrawn by assessee for his personal purposes for personal expenditure or investments, which are not disclosed to Ld.AO and that, amount was never available with him for purpose of being deposited back in bank account.

He thus observed as under: “5.7 Although the appellant has relied upon various decisions to support his contentions, however the same are found to be rendered on different facts. Since in the case under consideration facts are different, these decisions cannot be applied. The appellant has relied upon the decision of Allahabad High Court in the case of Bi7aiyaIai Shyam Behari v. Commissioner of Income-taxI2005J 276 ITR 38 (All.), however it is noted that in the said case the appeal of the assessee against the order of ]TAT was dismissed by the 1-IC and the issue was thus decided in favour of Revenue. The HC held that for adjudicating upon the plea of peak credit, the factual foundation has to be laid by the assessee. In the case under consideration the appellant has failed to explain as to how each and every cash withdrawal made it from the bank account was never utilized by it and how the same was available to him for being deposited back. So the above decision goes against the appellant. The onus was on the appellant to explain the source of cash deposits in his bank account, however he has failed to discharge such onus.”

Aggrieved by order of Ld.CIT(A), assessee preferred appeal before this Tribunal.

Only ground raised

He placed reliance upon order dated 24/08/2018 passed by Coordinate bench of this Tribunal in case of Vinitha Madhusudan Redd Vs.ACIT in for assessment year 2014-15. Ld.AR submitted that, identical issue arose before this Tribunal wherein, it has been held that, when sufficient cash was available in the bank with assessee, subsequent withdrawal and deposit cannot be disbelieved by revenue authorities. He also submitted that this (Tribunal) while taking this view relied upon decision of Hon’ble Karnataka High Court in case of S.R Venkatraman vs CIT & Ors. reported in 127 ITR 807.

We have perused submissions advanced by both sides in light of records placed before us. 14. Details of cash deposit and cash withdrawn by assessee from its bank account has been provided as under:

It is seen from the above that cash deposits in bank account are preceded by withdrawals from very same account. The above table is reproduced in impugned order shows that, cash withdrawn on various dates were subsequently deposited and this has not been disbelieved by revenue. The only issue alleged by revenue is, availability of cash for deposit, as on the respective dates. Further it is not disputed by revenue that cash withdrawn is subsequently deposited back into the same account.

We have perused decisions relied by Ld.AR passed by Hon’ble Karnataka High Court in case of S.R Venkatraman vs CIT & Ors(supra), wherein, Hon’ble Court held that, it was not open to revenue to examine as to what assessee did with the money and cannot choose to disbelieve the plea of assessee merely on surmises that, it would not be probable for assessee to keep the money unutilised. This view has been followed by Coordinate bench of this Tribunal in case of Vinitha Madhusudan Redd Vs.ACIT (supra) on identical facts. Respectfully following the same we are of opinion that, sum of Rs.43,86,000/- cannot be considered as unexplained. 16. In the present facts of the case sum of Rs.11,18,255/- being difference between cash withdrawal and cash deposited stands unexplained by assessee before us. We therefore, restrict disallowance only to the extent of Rs.11,18,255/-.