VICKY SHERWANI,RAIPUR,RAIPUR vs. INCOME TAX OFFICER 3(1), RAIPUR, RAIPUR

The captioned appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 10.06.2025 for the assessment year 2016-17 as per the following grounds of appeal:

At the time of assessment, it was observed by the AO that huge cash was deposited in the bank account of the assessee with Allahabad Bank, Raipur and the assessee was asked to explain the source and nature of such cash deposits. Thereafter, the AO had observed and held as follows:

Ld. CIT(A)/NFAC confirmed the addition made by the AO on the basis of following observations:

At the time of hearing, Ld. Counsel for the assessee submitted that the assessee is a money lender and explaining the source of such cash deposits he had furnished a table wherein he has explained the following items: (i) IDS Declaration of Rs.10,00,000/-: That cross checking the said IDS declaration annexed at page 13 of the paper book volume 4, which is made part of this order as follows:

It is evident from the aforestated that the said IDS declaration pertains to assessment year 2015-16 whereas the case of the assessee is of assessment year 2016-17, hence, the said explanation is misplaced and incorrect. For FY 2015-16 relevant to AY 2016-17 there is no fund emanating in the IDS declaration hence cannot be a source explaining the cash deposits for AY 2016-17.

The next item that has been taken up by the assessee is that he had earned cash income of Rs.8,66,171/- for the financial year 2015-16, however, the assessee has not demonstrated this either in front of the department or before this Bench with any sustainable evidence. Mere explanations and oral submissions cannot come to the rescue of the assessee and it is just a method to cover up and a mere after thought, therefore, this amount of Rs.8,66,171/- is also not established and the claim of the assessee, therefore, stands incorrect, devoid of any evidence.

The assessee in item No. 3 has claimed cash income for financial year 2014-15 of Rs.5,70,517/-, however, this is with regard to assessment year 2015-16 and not for assessment year 2016-17, which is relevant assessment year before this Bench. Further, there has been no evidence furnished in this regard by the assessee, hence, the said amount of Rs.5,70,517/- also remains unsubstantiated as claimed by the assessee to justify the available cash for the said cash deposits.

The last item, the assessee has claimed is the surplus withdrawal from bank account in the FY 2014-15 i.e. relevant to AY 2015-16 of Rs.5,79,500/-. The same has been explained by the assessee through tabulation form at page 13 of paper book III. However, as submitted by Ld. Sr. DR that there is no authenticity of such tabulation because the same has not been furnished before the department. Even, the Ld. AR was unable to show any receipt of the department through any seal, stamp or even an online screenshot of the portal through which it can be said that such claim of the assessee is genuine. It is clear that the assessee has never furnished or shared the said document with the Department. Furthermore, it refers to FY 2014-15 relevant to AY 2015-16, the case before me is for AY 2016-17 and in absence of any credible evidence with regard to this aspect, the same cannot be relied upon and therefore, is misplaced and an incorrect statement made by the assessee. That further, the assessee has also not placed on record any confirmation from the bank with regard to said transaction. When the issue is about explaining the source of cash deposit, the assessee should have made efforts to obtain a statement from the bank regarding surplus withdrawal and corresponding deposits in the bank account. That, further the assessee has also not been able to explain why he had withdrawn such money during FY 2014-15 relevant to AY 2015-16 and had deposited in the FY 2015-16 relevant to AY 2016-17. There is no explanation by the assessee why a money lender would keep such huge amount of cash with him idle and deposit it at a later date. Therefore, the assessee had failed to demonstrate the availability of cash of Rs.30,16,188/- hence the cash deposits remain unexplained. The Department has rightly observed that the opening balance as disclosed by the assessee at Rs.26,04,762/- was disclosed for the first time in the statement of affairs submitted during the assessment and are not supported by any previous cash flow statement, books or audited records.

It was submitted by the assessee that the said cash has been withdrawn from his bank account during the FY 2014-15 and there is no explanation before the subordinate authorities that why such cash withdrawal claimed to have been made was not deposited back in the bank account during financial year 2014-15 itself and why the same were deposited in a segregated manner during FY 2015-16.

The CIT(A)/NFAC also holds that as per declaration for IDS for undisclosed income for several years, it was apparent that the assessee had persistently not declared his income truthfully which goes on to show the concealment or incorrect declaration of income made by the assessee before the Department. These aspects have not been explained and clarified by the Ld. Counsel for the assessee.

That on examination of the facts and circumstances of the case as per the foregoing paras, I do not find any infirmity with the findings of the Ld. CIT(A)/NFAC, which is hereby upheld.

In the result, the appeal of the assessee is dismissed.