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Income Tax Appellate Tribunal, ‘’ SMC” BENCH, AHMEDABAD
Before: SHRI WASEEM AHMED
आदेश/O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi dated 28/10/2021 arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2017-18.
The only issue raised by the assessee is that the learned CIT(A) erred in confirming the addition of Rs. 14,33,000/- made by the AO on account of cash deposits made in the bank, treating the same as unexplained cash under section 69A of the Act.
The facts in brief are that the assessee is an individual and showing income from salary and agricultural activity. The assessee filed his return of income for the year under consideration declaring an income of Rs. 1,50,500/- only. However, the AO found that the assessee has made cash deposits of Rs. 14,33,000/- in his bank account maintained with Axis Bank.
On question about the source of cash deposit by the AO, the assessee submitted that there was opening cash balance of Rs. 26,38,033/- only and besides there were cash sales of agricultural produce. As per the assessee, the cash deposit was made out of opening cash balance and sale proceeds of agricultural produce. The contention of the assessee was rejected by the AO by observing that the opening cash balance shown by the assessee was not supported based on the documentary evidence. Further, the assessee has regularly withdrawn cash during the month of April to October 2016 aggregating to Rs. 2,15,000/- only. If the assessee was actually having such huge opening cash balance, then there was no need to withdraw any cash from the bank. Likewise, there was cash deposits on two occasions during the demonetization period aggregating to Rs. 11,66,500/- only. If there was opening balance available with the assessee, then he should have deposited all the cash at the same time during demonetization. The AO also found that all the proceeds from the sales of agricultural produced were received through banking channel except for 3 occasion where an amount of Rs, 1,25,000/- each claimed to be received in cash from M/s Maruti Cotton Industries. However, no bill/voucher furnished for the same. Thus, the AO in view of the above held that the assessee failed to explain the source of cash deposits and treated the same as income of the assessee under section 69A of the Act.
The aggrieved assessee carried the matter before the learned CIT(A).
The assessee before the learned CIT(A) submitted that during the assessment proceeding necessary details such as cash book, bank book, sale bill or agricultural produce and copy of 7/12 extract showing holding of agricultural land were furnished. But the AO without properly considering the same held the source of cash deposit was not explained. The assessee further submitted that he and his father were jointly holding agricultural land. For the agricultural purposes, the joint agricultural cash credit account was opened with Axis Bank and the impugned transactions of cash deposit were made out of such agricultural cash credit account. The assessee also submitted that he is working with M/s EON Jewelry Pvt. Ltd under employment. Therefore, his father is looking after the agricultural activity alone and also operating the bank impugned bank account. The transaction of cash deposit made by his father represent cash generated from agricultural activity of the entire family. The allegation of the AO that the cash book where huge opening cash balance was shown is afterthought is not true. As such the cash book was prepared along with the filing of return of income. Therefore the deposit of cash has been duly explained and thus no addition is required to be made.
The learned CIT(A) after considering the facts in totality confirmed the Action of the AO by observing as under:
4.2 The facts and grounds of the case, assessment order and the arguments submitted by the appellant have been gone through. In the Appellate Proceedings it has been submitted that appellant has a joint bank account with his father. Appellant also has joint land holding with his father. On the basis of this joint bank account and joint land holding, appellant has attempted to justify the cash deposit in the bank account. The Assessing Officer has given finding in his order that, appellant was regularly withdrawing cash from accounts. The AO has also given a finding that the main source of cash deposit was opening cash balance, which has not been justified. As per the assessment order of the AO cashbooks were fabricated as appellant did not submit any cogent evidence during the assessment proceedings.
I have carefully considered the appellant's submissions as well as the assessment order. In the submissions furnished during the appeal proceedings, the appellant has not substantiated the cash deposits in the bank accounts. The contention of the appellant that the cash deposit is linked with the agricultural activities of his father is not in line with the finding of AO in the assessment order. Appellant had been using different justification for cash deposits but without convincing arguments. Taking into account the submission of the appellant as well as findings of the AO, the ground of appeal is dismissed.
Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before me.
The learned AR before me filed a paper book running from pages 1 to 42 and also filed additional evidences vide letter dated 19 September 2022. It was contended by the learned AR that the assessee along with his father has taken agricultural loan from Axis Bank in the immediate preceding financial year 2015-16 amounting to ₹16,35,000 which was credited in the joint bank account of the assessee along with his father but subsequently, the impugned amount of loan was transferred to the saving bank account of the assessee in the same financial year i.e. 2015-16. Thereafter, the assessee has withdrawn the cash from his saving bank account in the financial year 2015-16 to the tune of ₹15 lakhs which was available as opening cash balance for the year under consideration. As such, the opening cash balance shown by the assessee at ₹ 26,38,033/- was comprising of cash withdrawal from the bank and the past saving of the family members of the assessee. Accordingly, the learned AR contended that the cash deposit was made in the year under consideration out of the cash available with the assessee. The learned AR in support of his contention has filed additional documentary evidences which are available on record.
Per contra, the learned DR vehemently supported the order of the authorities below.
I have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, the cash amounting to Rs. 14.33 lakh was deposited in the bank of the assessee which was treated as unexplained by the AO and subsequently confirmed by the learned CIT-A. At the outset, I note that the learned AR for the assessee before me has taken new set of argument. Although the learned AR persisted with the argument that the cash was deposited out of opening cash available with the assessee but came with new angle to prove the availability of the opening cash. It was contended that he (the assessee) and his father have jointly availed agricultural loan of Rs. 16,35,000/- in the F.Y. 2015-16 and thereafter the same was transferred to the saving bank of the assessee. From the saving bank account of the assessee, there was withdrawal aggregating to Rs. 15 lakh which was made on different dates during the month of August 2015 to February 2016 and this cash was available with the assessee and form the part of opening cash for the year under consideration and deposits were made from opening cash balance. At this juncture, a question arise that the loan was jointly availed for the purpose of agricultural activity then how the same transferred to the saving bank account of the assessee. From where, the cash withdrawal was made which was kept as it is without utilizing the same for agricultural activity. The assessee has not provided the details with regard to fact that if loan amount is not utilized for agricultural activity then what was the source of expense incurred for cultivation of crop.
11.1 Be that as may be, the submission of the assessee cannot be brushed aside merely on basis of lack of certain detail on record or merely on the basis of certain doubt or suspicion. Further, the learned AR has taken fresh set of argument in order to establish the availability of cash for making deposit on which, the mind of the AO has not been applied. Moreover, I also note that the assessee has filed additional evidences 1st time before us to justify availability of cash in hand as opening balance which are available on record. To my understanding, the consideration of the additional evidences filed by the assessee is very essential to render the justice to the assessee and therefore I exercise the power granted under rule 29 of ITAT rules and admit the additional evidences filed by the assessee. Therefore, for the sake of justice and fair play, I hereby set aside the issue to the file of the AO for de novo adjudication with the direction that the assessee shall cooperate before the AO in the proceedings. Hence, the ground of appeal of the assessee is allowed for the statistical purposes.
In the result, the appeal filed by the assessee is allowed for the statistical purposes.
Order pronounced in the Court on 09/11/2022 at Ahmedabad.