NITINKUMAR PRAVINCHANDRA KACHARIA,MUMBAI vs. DCIT-CENTRAL CIRCLE 5(2), MUMBAI, MUMBAI

Nitinkumar Pravinchandra Kacharia Nitinkumar Pravinchandra Kacharia & 8598/MUM/2025 accumulated saving made by the assessee and his family members accumulated saving made by the assessee and his family members accumulated saving made by the assessee and his family members including his son along with certain gifts received on various including his son along with certain gifts received on various including his son along with certain gifts received on various occasions such as birthday, anniversary etc. Th occasions such as birthday, anniversary etc. The assessee also e assessee also explained that he was showing income of more than Rs.50,00,000/- explained that he was showing income of more than Rs.50,00,000/ explained that he was showing income of more than Rs.50,00,000/ in last five years. The assessee submitted that in assessment year in last five years. The assessee submitted that in assessment year in last five years. The assessee submitted that in assessment year 2018-19 income of Rs.2,54,40,525/ 19 income of Rs.2,54,40,525/-, in assessment year 2019 , in assessment year 2019- 2020 income of Rs.94,56,130/ 2020 income of Rs.94,56,130/-, in assessment yea , in assessment year 2020-21 income of Rs.96,58,514/ Rs.96,58,514/-, and in assessment year 2021 in assessment year 2021-22 income of Rs. 1,67,58,530/- was reported under the income tax return but was reported under the income tax return but said contentions of the assessee of the assessee was rejected by the AO by the AO.

4.1 Further, it was it was submitted by the assessee that in last that in last two years i.e. financial year 2019 i.e. financial year 2019-2020 and financial year 2020 financial year 2020-21, the assessee and his son Shri Anuj Kacharia had made cash assessee and his son Shri Anuj Kacharia had made cash assessee and his son Shri Anuj Kacharia had made cash withdrawal withdrawal aggregating aggregating to to Rs.26,80,600/ Rs.26,80,600/- due due to to ongoing ongoing uncertainty of Covid- -19 prevailing at the time to meet any medical to meet any medical emergency in the family. The assessee provided year ncy in the family. The assessee provided year-wise details of ncy in the family. The assessee provided year the cash withdrawal by the assessee and his son. Accordingly, it the cash withdrawal by the assessee and his son. Accordingly, it the cash withdrawal by the assessee and his son. Accordingly, it was submitted that at the beginning of the assessment year under was submitted that at the beginning of the assessment year under was submitted that at the beginning of the assessment year under consideration it had sufficient excess balance available with him to had sufficient excess balance available with him to had sufficient excess balance available with him to deposit same in the bank account. It was submitted in the year deposit same in the bank account. It was submitted in the year deposit same in the bank account. It was submitted in the year under consideration that under consideration that the assessee and his son has made cash the assessee and his son has made cash withdrawal of Rs.10,94,000/ withdrawal of Rs.10,94,000/- from the same bank account. It was from the same bank account. It was submitted that considering opening cash balance of Rs.34,96,600/ t considering opening cash balance of Rs.34,96,600/- t considering opening cash balance of Rs.34,96,600/ comprising of Rs.10,00,000/ comprising of Rs.10,00,000/- past savings and Rs.2 past savings and Rs.24,49,600/-

Nitinkumar Pravinchandra Kacharia Nitinkumar Pravinchandra Kacharia & 8598/MUM/2025 bank withdrawal made in the last two years, c wal made in the last two years, cash available with the ash available with the assessee as on first day of the year along with current year’s assessee as on first day of the year along with current year’s assessee as on first day of the year along with current year’s withdrawal, the assessee had sufficient cash balance with him to the assessee had sufficient cash balance with him to the assessee had sufficient cash balance with him to deposit the same into the bank account. The assessee filed a deposit the same into the bank account. The assessee filed a deposit the same into the bank account. The assessee filed a detailed chart of the deposit detailed chart of the deposits and withdrawals for the year under for the year under consideration for assessee as well as his son consideration for assessee as well as his son. Regarding the cash egarding the cash deposit of Rs.15,59,931/ f Rs.15,59,931/- in assessment year 2023 in assessment year 2023-24, again the assessee explained assessee explained that cash withdrawal made during the year cash withdrawal made during the year under consideration along with cash withdrawal under consideration along with cash withdrawal and saving of the and saving of the earlier year, source ource ource of of of the the the cash cash cash deposit deposit deposit amounting amounting amounting to to to Rs.15,59,391/- stands stands explained.

4.2 But the Ld. CIT(A) after considering the submission of the But the Ld. CIT(A) after considering the submission of the But the Ld. CIT(A) after considering the submission of the assessee allowed relief to the extent of Rs.7,34,000/- in AY 2022-23 assessee allowed relief to the extent of Rs.7,34,000/ assessee allowed relief to the extent of Rs.7,34,000/ as cash deposit out of cash deposit out of withdrawals made in the year under made in the year under consideration consideration consideration and and and sustained sustained sustained addition addition addition to to to the the the extent extent extent of of of Rs.23,99,900/-. Similarly, in assessment year 2023 . Similarly, in assessment year 2023-24 also the Ld. . Similarly, in assessment year 2023 CIT(A) allowed relief of Rs.90,000/ CIT(A) allowed relief of Rs.90,000/- and sustained the balance and sustained the balance addition of Rs.14,69,939/ addition of Rs.14,69,939/- observing as under:

“14.4 It is submitted by the assessee that during the year under 14.4 It is submitted by the assessee that during the year under 14.4 It is submitted by the assessee that during the year under consideration, the assessee has made cash withdrawals of consideration, the assessee has made cash withdrawals of consideration, the assessee has made cash withdrawals of Rs.7,20,000/ Rs.7,20,000/- and were claimed to be available as cash on hand and were claimed to be available as cash on hand which the assessee re which the assessee re-deposited as cash bank deposits during the deposited as cash bank deposits during the year relevant to A.Y. 2023 levant to A.Y. 2023-24. However, on verification of the 24. However, on verification of the statement of Bank of Baroda and Bank of India of the assessee statement of Bank of Baroda and Bank of India of the assessee statement of Bank of Baroda and Bank of India of the assessee produced during the appellate proceedings, it is found that only produced during the appellate proceedings, it is found that only produced during the appellate proceedings, it is found that only Rs.90,000/- of actual cash withdrawals are verifiable from both of actual cash withdrawals are verifiable from both of actual cash withdrawals are verifiable from both banks of the assessee as detailed below: the assessee as detailed below: Date Bank Name Amount Remarks Remarks

Nitinkumar Pravinchandra Kacharia Nitinkumar Pravinchandra Kacharia & 8598/MUM/2025

11.4.2022 Bank of India Bank of India 30,000 Self-withdrawal withdrawal 02.05.2022 Bank of India Bank of India 30,000 Self-withdrawal withdrawal 02.06.2022 Bank of India Bank of India 30,000 Self-withdrawal withdrawal 14.5 It is, however, noted that the assessee 14.5 It is, however, noted that the assessee had claimed total cash had claimed total cash withdrawals of Rs.7,20,000/ withdrawals of Rs.7,20,000/- from both banks. On verification, it is from both banks. On verification, it is observed that the alleged additional withdrawals of Rs.6,30,000/ observed that the alleged additional withdrawals of Rs.6,30,000/ observed that the alleged additional withdrawals of Rs.6,30,000/- on various occasions from Bank of India till the date of cash deposit on various occasions from Bank of India till the date of cash deposit on various occasions from Bank of India till the date of cash deposit are not reflected in the ba are not reflected in the bank statements of the assessee. nk statements of the assessee. Accordingly, the claim of total cash withdrawals of Rs.7,20,000/ Accordingly, the claim of total cash withdrawals of Rs.7,20,000/ Accordingly, the claim of total cash withdrawals of Rs.7,20,000/- is not fully verifiable, and only Rs.90,000/ not fully verifiable, and only Rs.90,000/- is accepted as genuine is accepted as genuine cash withdrawals available for redeposit. Hence, the contention of cash withdrawals available for redeposit. Hence, the contention of cash withdrawals available for redeposit. Hence, the contention of the assessee that the e the assessee that the entire Rs.7,20,000/- was available as cash was available as cash for redeposit is not sustainable. It is also clarified that cash for redeposit is not sustainable. It is also clarified that cash for redeposit is not sustainable. It is also clarified that cash withdrawals made by the assessee's son cannot be linked to the withdrawals made by the assessee's son cannot be linked to the withdrawals made by the assessee's son cannot be linked to the assessee's deposits. Accordingly, only cash deposits to the extent of assessee's deposits. Accordingly, only cash deposits to the extent of assessee's deposits. Accordingly, only cash deposits to the extent of Rs.90,000/- are treated as explained, and the remaining cash treated as explained, and the remaining cash deposits of Rs. 14,69,391/ deposits of Rs. 14,69,391/- (Rs.15,59,391 Rs.90,000) sustained as (Rs.15,59,391 Rs.90,000) sustained as unexplained money u/s 69A of the Income unexplained money u/s 69A of the Income-tax Act, 1961. Thus, tax Act, 1961. Thus, addition of Rs. 14,69,391/ addition of Rs. 14,69,391/- u/s 69 A of the IT Act is confirmed and u/s 69 A of the IT Act is confirmed and the assessee get the assessee gets partial relief of Rs.90,000/- Accordingly, grounds of the appeal Partly allowed. Accordingly, grounds of the appeal Partly allowed.” 4.3 The Ld. counsel for the assessee filed a Paper Book containing The Ld. counsel for the assessee filed a Paper Book containing The Ld. counsel for the assessee filed a Paper Book containing pages 1 to 52.

5.1 The Ld. CIT(A) has accepted The Ld. CIT(A) has accepted the source of the cash cash deposit out of withdrawal made in the current years, b awal made in the current years, but he has not considered has not considered withdrawal made by the assessee in financial year 2019-2020 and withdrawal made by the assessee in financial year 2019 withdrawal made by the assessee in financial year 2019 financial year 2020- -21 i.e. immediately prior to the year under immediately prior to the year under consideration. The assessee has explained sa consideration. The assessee has explained salary income income earned of more than salary income of Rs.2,54, more than salary income of Rs.2,54,40, 525/- in assessment year in assessment year 2018-19; 19; Rs.94,56,130/- Rs.94,56,130/ in in assessment assessment year year 2019-2020; 2019 Rs.96,58,514/- in assessment year 2020 in assessment year 2020-21 ; Rs.95,45,619/ 21 ; Rs.95,45,619/- in assessment year 2021 assessment year 2021-22 and Rs.1,67,585/- in assessmen in assessment year 2022-23, which is more than the enough which is more than the enough to explain to explain the withdrawal of Rs.2,68,06,600/- shown by the assessee in financial year 2019 shown by the assessee in financial year 2019 shown by the assessee in financial year 2019- 2020 and financial year 2020 2020 and financial year 2020-21 and family saving of approximately saving of approximately Rs.10,00,000/- in prior year in prior years.

5.2 Upon a careful s Upon a careful scrutiny of the facts, we find that firstly, t we find that firstly, the Assessee has demonstrated a robust financial profile, reporting Assessee has demonstrated a robust financial profile, reporting Assessee has demonstrated a robust financial profile, reporting substantial returns in preceding years substantial returns in preceding years .The quantum of deposits is The quantum of deposits is not disproportionate to the Assessee’s documented standard of not disproportionate to the Assessee’s documented standard of not disproportionate to the Assessee’s documented standard of living and earnings. Secondly, the Assessee contended that cash he Assessee contended that cash was withdrawn in F.Y. 2019 was withdrawn in F.Y. 2019-20 and 2020-21 (totaling 21 (totaling ₹26,80,600/-) to provide a liquidity cushion for medical emergencies during the to provide a liquidity cushion for medical emergencies during the to provide a liquidity cushion for medical emergencies during the COVID-19 pandemic. In the Indian socio 19 pandemic. In the Indian socio-economic context, economic context, particularly for a taxpayer supporting elderly parents during a taxpayer supporting elderly parents during a taxpayer supporting elderly parents during a Nitinkumar Pravinchandra Kacharia Nitinkumar Pravinchandra Kacharia & 8598/MUM/2025 global health crisis, such an explanation is not merely "plausible"— global health crisis, such an explanation is not merely "plausible" global health crisis, such an explanation is not merely "plausible" it is inherently probable. it is inherently probable. Thirdly, the Revenue’s primary objection is he Revenue’s primary objection is that the Assessee failed to prove a that the Assessee failed to prove a one to one trail of the cash in trail of the cash in hand. However, it is a settled principle of law that once a d. However, it is a settled principle of law that once a d. However, it is a settled principle of law that once a withdrawal from a known source (bank account) is established, the withdrawal from a known source (bank account) is established, the withdrawal from a known source (bank account) is established, the burden shifts to the Revenue to prove that such funds were utilized burden shifts to the Revenue to prove that such funds were utilized burden shifts to the Revenue to prove that such funds were utilized elsewhere. The Revenue cannot proceed on a purely suspicious elsewhere. The Revenue cannot proceed on a purely suspicious elsewhere. The Revenue cannot proceed on a purely suspicious footing or the presumption that cash withdrawn must be spent ing or the presumption that cash withdrawn must be spent ing or the presumption that cash withdrawn must be spent immediately.

5.3 The Revenue authorities The Revenue authorities have not been able to point out that not been able to point out that said money withdrawn was used for any other purposes withdrawn was used for any other purposes withdrawn was used for any other purposes. Unless, the Revenue is able to establish that those withd evenue is able to establish that those withdrawals rawals were used anywhere else, the contention of the assessee cannot be rejected he contention of the assessee cannot be rejected he contention of the assessee cannot be rejected merely on the basis of presumption by the Revenue Authorities. The merely on the basis of presumption by the Revenue Authorities. merely on the basis of presumption by the Revenue Authorities. Ld. CIT(A) erred in adopting a restrictive approach by ignoring the Ld. CIT(A) erred in adopting a restrictive approach by ignoring the Ld. CIT(A) erred in adopting a restrictive approach by ignoring the availability of cash from prior years and the availability of cash from prior years and the cumulative family pool. cumulative family pool. In the absence of any evidence that the withdrawn cash was spent In the absence of any evidence that the withdrawn cash was spent In the absence of any evidence that the withdrawn cash was spent or invested elsewhere, the Assessee's explanation regarding the re- or invested elsewhere, the Assessee's explanation regarding the re or invested elsewhere, the Assessee's explanation regarding the re deposit of the same cannot be brushed aside as an afterthought. deposit of the same cannot be brushed aside as an afterthought. deposit of the same cannot be brushed aside as an afterthought.

5.4 The assessee relied on the The assessee relied on the decision of Bangalore Bench of the Bangalore Bench of the Tribunal in the case of Suthakar Selvaraj vs. ITO in in the case of Suthakar Selvaraj vs. ITO in in the case of Suthakar Selvaraj vs. ITO in wherein also similar explanation of the cash 1656/Bang/2025, wherein also similar explanation of the cash 1656/Bang/2025, wherein also similar explanation of the cash deposit made out of withdrawn was accepted by the Tribunal deposit made out of withdrawn was accepted by the Tribunal deposit made out of withdrawn was accepted by the Tribunal observing that there was no reason to disbeli observing that there was no reason to disbelieve the explanation of eve the explanation of Nitinkumar Pravinchandra Kacharia Nitinkumar Pravinchandra Kacharia & 8598/MUM/2025 the assessee on the assumption that person drawing salary does the assessee on the assumption that person drawing salary does the assessee on the assumption that person drawing salary does not indulge in the habit of first unnecessary withdrawing money not indulge in the habit of first unnecessary withdrawing money not indulge in the habit of first unnecessary withdrawing money from the bank and then deposit the same after few days. The from the bank and then deposit the same after few days. The from the bank and then deposit the same after few days. The Tribunal observed that when there was no evidence that the Tribunal observed that when there was no evide Tribunal observed that when there was no evide amount of the cash withdrawn by the assessee was used for some amount of the cash withdrawn by the assessee was used for some amount of the cash withdrawn by the assessee was used for some other purposes and the amount of deposit made by the assessee other purposes and the amount of deposit made by the assessee other purposes and the amount of deposit made by the assessee was out of unaccounted income of the assessee ccounted income of the assessee, the , the cash deposit made was acceptable. The Tribunal further observed that there was made was acceptable. The Tribunal further observed tha made was acceptable. The Tribunal further observed tha not any adverse evidence adverse evidence and merely on basis of assumption and assumption and presumption, the addition of cash deposit could not have been the addition of cash deposit could not have been the addition of cash deposit could not have been sustained.

5.6 In our opinion, facts and circumstances in the case of the In our opinion, facts and circumstances in the case of the In our opinion, facts and circumstances in the case of the assessee for assessment year 2022 assessee for assessment year 2022-23 and 23-24 are identical to 24 are identical to the decision in the case of the decision in the case of Suthakar Selvaraj (supra), therefore, Suthakar Selvaraj (supra), therefore, respectfully following the finding of the Co respectfully following the finding of the Co-ordinate Bench of the ordinate Bench of the decision, we do not find any justification in the finding of the Ld. decision, we do not find any justification in the finding of the Ld. decision, we do not find any justification in the finding of the Ld. CIT(A) for sustaining the addition of Rs.23,99,900/ CIT(A) for sustaining the addition of Rs.23,99,900/- - in assessment year 2022-23 and Rs.14,61,391/ 23 and Rs.14,61,391/- in assessment year 2023 in assessment year 2023-24. Accordingly, we find no legal or factual justification for sustaining Accordingly, we find no legal or factual justification for s Accordingly, we find no legal or factual justification for s additions of ₹23,99,900/ 23,99,900/- (A.Y. 2022-23) and ₹14,69,391/ 14,69,391/- (A.Y. 2023-24). The orders of the Ld. CIT(A) on these counts are set aside, 24). The orders of the Ld. CIT(A) on these counts are set aside, 24). The orders of the Ld. CIT(A) on these counts are set aside, and the additions are hereby deleted. and the additions are hereby deleted.

5.7 As the grounds challenging the validity of the assessment were As the grounds challenging the validity of the assessment were As the grounds challenging the validity of the assessment were not pressed, they are dismissed as infructuous. ssed, they are dismissed as infructuous.

Nitinkumar Pravinchandra Kacharia Nitinkumar Pravinchandra Kacharia & 8598/MUM/2025

Order pronounced in the open Court on ounced in the open Court on 25/02/2026. /02/2026.