SHRI SACHIN PATEL,AHMEDABAD vs. ITO, WARD-3(1)(4), AHMEDABAD

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ITA 1979/AHD/2018Status: DisposedITAT Ahmedabad13 July 2022AY 2015-164 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the cash deposit was adequately explained by earlier cash withdrawals from the same bank account, as evidenced by the bank statement. The Revenue did not establish any other source of income or that the withdrawals were utilized elsewhere.

What were the facts?

The assessee deposited Rs. 20 lakhs in cash into their bank account. The assessee claimed this deposit was explained by previous cash withdrawals from the same bank account. The Assessing Officer and CIT(A) made an addition under Section 68 for unexplained cash credit.

What were the issues?

Whether the cash deposit in the bank account was adequately explained by prior cash withdrawals from the same account, thus not constituting an unexplained cash credit under Section 68.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SMT.ANNAPURNA GUPTA & T.R. SENTHIL KUMAR

Hearing: 19/04/2022Pronounced: 13/07/2022

(Applicant) (Responent) : Shri Nirmit Mehta, AR Assessee by Revenue by : Shri R.R. Makwana, Sr.DR सुनवाई क� तार�ख/Date of Hearing : 19/04/2022 घोषणा क� तार�ख /Date of Pronouncement: 13/07/2022 आदेश/O R D E R

PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER

1.

The present appeal has been filed by the Assessee against the order passed by the Commissioner of Income Tax (Appeals)- 9, Ahmedabad (in short referred to as CIT(A)),u/s 250(6) of the Income Tax Act,1961,(hereinafter referred to as ‘Act”) dated 10.7.2018 pertaining to Assessment Year 2015-16.

2.

The solitary issue in the present appeal relates to addition made under section 68 of the Act on account of cash found deposited in the bank account of the assessee remained unexplained of Rs.20.00 lakhs and the ground raised by the assessee in this regard is as under:

“Assessee had cash on hand of Rs.2000000 in books of account And same has been deposited to the bank assessee had also provided all the proof and documents related to cash on hand to the Assessing Officer moreover we have provided all the documents to the appellant commissioner but ld.Officer Passed Appeal Order without giving opportunity.”

3.

The sole pleading of the ld.counsel for the assessee was that the Revenue authorities had failed to appreciate the fact that the cash deposit was duly explained by cash withdrawn from the said bank in the very same year. In this regard, he drew our attention to the statement of account of the assessee in the Bank of Baroda where Rs.20 lakhs was found deposited in cash on 13.2.2015 as under:

3 4. Referring to the above, he pointed out that the cash withdrawal from 28.7.2014 to 28.8.2014 ranging from Rs.4.5 lakhs to Rs.9.5 lakhs almost every month far exceeded the cash deposit of Rs.20 lakhs on 13.2.2015, and therefore, adequately explained the source of cash deposits. The ld.counsel pointed out that none of the authorities below took note of the same and in the absence of any other source of income of the assessee ,besides that disclosed in the return of income filed Rs.20 lakhs deposits in the bank account in cash stood adequately explained from cash withdrawn earlier.

5.

The ld.DR however contended that before the AO apparently no explanation had been offered by the assessee, and even before the ld.CIT(A) the assessee had only contended that the source of cash was withdrawal from his partnership firm, viz. M/s.Suraj Cotton and therefore this explanation of the assessee being completely different from that given before the ld.CIT(A) need not to be accepted.

6.

We have considered contentions of both the parties. We see no reason to disagree with the ld.counsel for the assessee that the source of cash deposits of Rs.20.00 lakhs stood adequately explained from the cash withdrawn earlier as duly reflected in the bank account of the assessee. Both the figures of cash withdrawals made by the assessee during the year and that deposited subsequently were evident from the very same bank statement, and it is not the case of the Revenue that withdrawals were found to be utilized elsewhere,nor has the revenue found any source of income not declared by the assessee. In these facts and circumstances, we completely agree with the ld.counsel for the assessee that cash deposits of Rs.20.00 lakhs are duly explained as from the cash withdrawal made earlier, and the addition therefore of the cash

4 deposits of Rs.20 lakhs made under section 68 of the Act is not sustainable in law, and directed to be deleted.

7.

In the result, appeal of the assessee is allowed.

Order pronounced in the Court on 13th July, 2022 at Ahmedabad.

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