SHRI DANK KAILASH CHANDRAPRAKASH,,AHMEDNAGAR vs. INCOME-TAX OFFICER, WARD - 4,, AHMEDNAGAR

The assessee has filed revised grounds of appeal, which read as under:- The following grounds of appeal are taken independently and without prejudice to one another.

The assessee has not raised any ground of appeal No.1. The grounds of appeal No.2 and 4 raised have not been pressed and hence, the same are dismissed as not pressed.

The only issue raised remaining is vide ground of appeal No.3 against addition of ₹ 4,24,102/-.

Briefly, in the facts of the case, the assessee had furnished return of income declaring total income of ₹ 1,00,140/-. The case of assessee was picked up for scrutiny. The assessee failed to appear before the Assessing Officer and hence, certain information was collected by Assessing Officer through bank statement from Urban Co-op. Bank Ltd. and noted that there were cash deposits in the said bank account i.e. totaling ₹ 33,53,467/-. The assessee had declared sales at ₹ 28,69,480/-, credit for which was allowed and balance was treated as unexplained cash credit under section 68 of the Act at ₹ 4,83,987/-. Before making addition, the assessee was given show cause notice. However, none appeared on behalf of assessee. Further, the Assessing Officer noted that the assessee had shown liability on account of gold loans in the Balance Sheet of ₹ 4 lakhs and ₹ 4,66,800/-. The Assessing

The assessee filed an appeal against the order of Assessing Officer and also furnished detailed explanation against so-called liability of ₹ 4,25,136/-. However, the CIT(A) did not accept the plea of assessee and also issued enhancement notice to the assessee. After analyzing cash deposits in various bank accounts and explanation of sources of cash deposits, the CIT(A) vide para 9.2 observed that sum of ₹ 6,00,013/- remained to be explained by the assessee, out of which, sum of ₹ 4,24,102/- represented repayment of loan by his brother in cash under a family settlement. Since there was no written agreement in this regard, contention of assessee was not accepted and addition of ₹ 4,24,102/- was added in the hands of assessee, against which the assessee has raised ground of appeal No.3.

The learned Authorized Representative for the assessee pointed out that the assessee has furnished complete explanation in this regard, which is incorporated on the back side of page 6 of appellate order. The assessee explained that gold loan was paid by his brother Shri Ajay Chandraprakash

The learned Departmental Representative for the Revenue on the other hand, placed reliance on the orders of authorities below.

On perusal of record and after hearing both the learned Authorized Representatives, the limited issue which arises vide ground of appeal No.3 is against addition of ₹ 4,24,102/-. The assessee had deposited cash in his bank account and information was sought from the assessee to explain the source of said cash deposits. The assessee furnished information but to the extent of ₹ 4,24,102/-, the explanation filed by assessee was not accepted. The assessee pointed out that the said gold loan was cleared by his brother as part of family settlement. The assessee also filed evidence of said bother having taken gold loan of ₹ 4,22,000/-, which was transferred to his savings account on 18.02.2008 and then the said amount was withdrawn and adjusted against gold loan liability of assessee. The said exercise was carried out because of family settlement and also furnished affidavit of his brother in this regard. There is merit in the plea of assessee and source of cash deposits in the bank account of assessee to the extent of ₹ 4,22,000/- stands explained. Accordingly, the plea of assessee to the extent of ₹ 4,22,000/- is accepted. However, source of balance sum of ₹ 2,102/- has not been properly explained

In the result, appeal of assessee is partly allowed.