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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, 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
The assessee has raised following grounds of appeal:-
“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.”
The only issue raised in the present appeal is against addition made in the
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.
Briefly in the facts of the case, the assessee was individual having income
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.
During First Appellate proceedings, the assessee furnished written
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.
Aggrieved by the order of CIT(A), assessee is in appeal before the Tribunal.
The Ld. AR for the assessee fairly agreed that complete
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.
On the other hand, Ld. DR for the Revenue has placed reliance on the orders
of the Authorities below.
4 ITA No.636/PUN/2017 A.Y.2008-09
On perusal of the record and after hearing both the Authorized
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.
Now coming to the second bank account i.e. Seva Vikas Co.-Op. Bank
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.
In the result, appeal of the assessee is partly allowed.
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.