DILIP N KOTWANI,PUNE vs. INCOME TAX OFFICER, PUNE

आदेश / ORDER

PER SUSHMA CHOWLA, JM

The appeal filed by the assessee is against the order of Commissioner of Income Tax (Appeals)-9, Pune dated 19.12.2016 relating to assessment year 2008- 09 against order passed under section 143(3) of the Income Tax Act, 1961 ( in short ‘the Act’).

2 ITA No.636/PUN/2017 A.Y.2008-09

“1. On the facts and circumstances prevailing in the case and as per provisions & scheme of the Act, it be held that, as per provisions & scheme of the Act, it be held, the additions made of Rs.12,00,920/- on account of cash deposits in Seva Vikas Bank & Rs.39,260/- in Axis Bank are not in accordance with the provisions of the Act & without properly considering the explanations offered by the assessee. The additions so made be deleted. Just in proper relief may be granted to the appellant. 2. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.”

hands of the assessee for not explaining cash deposits in Seva Vikas Bank and Axis

Bank. The total additions are of Rs.12,00,920/- and Rs.39,260/- respectively.

from LIC commission and commission from Oriental Insurance Co. Ltd. The

assessee furnished return of income declaring total income at Rs.1,56,960/-. The

case of the assessee was picked up for scrutiny. During assessment proceedings,

the Assessing Officer noted that the assessee has an account in Seva Vikas Co-Op.

Bank, Pimpri Branch in which there was substantial cash deposits of

Rs.12,00,920/-. The assessee was confronted with the said evidence during

assessment proceedings, since the assessee failed to show the bank account in the

return of income. The assessee gave some explanation with regard to cash deposit

in the said bank account. However, evidence produced by the assessee was found

not up to the mark. Further, he explained that he was insurance agent and certain

persons gave cash for payment of insurance policy which was deposited in the said

bank account. But the assessee could not furnish any confirmation from the parties

in this regard. The Assessing Officer further noted that assessee had another bank

account in the Axis Bank in which cash deposit was made. The assessee could not

prove the sources of the said cash deposit. Hence, the Assessing Officer made

3 ITA No.636/PUN/2017 A.Y.2008-09

addition of Rs.12,00,920/- on account of cash deposits in Seva Vikas Bank Limited

and Rs.2,28,300/- on account of cash deposits in Axis Bank.

submissions, additional evidences in respect of cash deposit of Rs.1,89,040/- in the

UTI Bank Ltd./ Axis Bank. The assessee also furnished explanation in respect of

cash deposits in Seva Vikas Co.-Op. Bank. The CIT(A) accepted the claim of

assessee’s cash deposits of Rs.1,89,040/- in UTI Bank Ltd./Axis Bank and addition

to that extent was deleted. With regard to the balance cash deposits in Seva Vikas

Co.-Op. Bank Limited, Pimpri Branch, Pune, explanation given by assessee was not

accepted by the CIT(A) and addition made by the Assessing Officer was confirmed.

explanation/evidences could not be furnished in respect of the cash deposits in Seva

Vikas Co-Op. Bank Limited. He pointed that assessee made cash withdrawals from

the UTI Bank Ltd./ Axis Bank and also from Seva Vikas Co-Op. Bank Limited and

details of the said withdrawals are placed at page 49 of the paper book. The Ld. AR

for the assessee pointed out that as against cash deposits of Rs.2,28,300/- in the

UTI Bank Limited, the outflow was of Rs.3,53,500/-. In respect of the Seva Vikas

Co.OP. Bank Limited, as against cash deposits of Rs.12,00,920/-, there was cash

withdrawal of Rs.5,96,100/-. The Ld. AR for the assessee stressed that the cash

available with the assessee should be set off against the cash deposits and

necessary relief may be allowed to the assessee.

of the Authorities below.

4 ITA No.636/PUN/2017 A.Y.2008-09

representatives, the issue raised in the present case is against additions made in the

hands of the assessee on account of cash deposits in two bank accounts of the

assessee. The first account was in UTI Bank Ltd./ Axis Bank and the said bank

account was disclosed by assessee. The total cash deposits in the said bank

account was Rs.2,28,300/-. Before the CIT(A), the assessee explained the deposits

to the extent of Rs.1,89,040/- for which additional evidence was filed before the

CIT(A). The assessee did not raise the issue of the availability of cash in hand, in

both the bank accounts before the Authorities below. First of all, the explanation of

the assessee to the extent of Rs.1,89,040/- has been accepted by the CIT(A) and

the assessee is in appeal only against the balance amount i.e. cash deposits in UTI

Bank Limited out of cash withdrawals during the year Rs.3,53,500/-. The assessee’s

submission to the extent that the cash withdrawals made by assessee and deposited

the same in the same account, has no merit to allow the claim of the assessee out of

cash withdrawals from UTI Bank Ltd/ Axis Bank. Accordingly, I reject the plea of the

assessee for the availability of cash deposits in UTI Bank Ltd. Hence, the addition of

Rs.2,28,300/- - Rs.1,89,040/- = Rs.39,260/- is upheld in the hands of assessee

being cash deposited in UTI Bank Limited.

Limited; this account was undisclosed bank account which had not been shown in

the return of income of the assessee. A perusal of the cash deposit reveals the

opening balance, inflow and out flow from the month of April, 2007 to March, 2008

against which, the cash withdrawals were very miniscule. Even if benefit of

withdrawals is allowed to the assessee, peak of the amount is to be added. The

assessee had furnished aforesaid details at page 49 of the paper book. The

assessee had initially deposited cash in the bank account against which there were

no cash withdrawals. Consequent thereof, there were cash withdrawals of

Rs.1,02,900/- in the month of December, 2007, Rs.3,87,000/- in the month of

5 ITA No.636/PUN/2017 A.Y.2008-09

January, 2008 against which there was cash deposit of Rs.10,200/- in month of December, 2007 and Rs.4,06,350/- in the month of January, 2008. The peak in this regard needs to be worked out on day to day basis. The assessee has filed details in this regard and peak negative cash balance is Rs.705,220/-. Accordingly, allowing benefit of cash withdrawals, I direct the Assessing Officer to verify the peak negative cash deposits in the hands of the assessee. For balance cash deposits, no explanation had been given by the assessee except for saying cash is available out of cash withdrawals made from both accounts, which is not accepted and hence, same are to be added as undisclosed income of the assessee. The Assessing Officer shall verify the details of the peak cash balance and compute addition in the hands of assessee.

Order pronounced on 22nd day of October, 2018.

Sd/- (SUSHMA CHOWLA) �या�यक सद�य/JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 22nd October, 2018. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-9, Pune. 4. The Pr. CIT-5, Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 6.

// True Copy // आदेशानुसार / BY ORDER,

�नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.