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Income Tax Appellate Tribunal, DELHI BENCH
Before: SHRI BHAVNSH SAINI
ORDER
Per Bhavnesh Saini, Judicial Member :
This appeal by the assessee has been directed against the order of Ld. CIT(A)- 17, New Delhi dated 16th Feb., 2016 for assessment year 2005-06, challenging the addition of Rs. 14 lakhs on account of unexplained cash deposit in the bank account. Earlier appeal of assessee was dismissed which is restored by allowing M.A.
I have heard Ld. Representatives of both the parties and perused the material available on record.
Briefly facts of the case are that in this case an assessment was completed u/s 143(3) /147 on 15th December, 2008, wherein an addition of Rs. 14,00,000/- was made to the returned income of the assessee treating the deposit of cash in Allahabad Bank, Paharganj on various dates, during the year as unexplained. The addition of Rs. 14,00,000/- were deleted by the Ld. CIT(A) vide order dated 10th December, 2009. The department filed appeal before ITAT and the Tribunal vide order dated 30th April, 2010 in set aside the order of the CIT(A) and restored the matter back to the file of AO with the direction to examine the contentions of the assessee about the availability of the cash with reference to the income admitted and the expenditure that would have been made by him for meeting his family expenses. AO will also examine the genuineness of the cash available with him as shown in statement of affairs. 4. The AO accordingly took up the matter again. The AO noted that assessee HUF applied for allotment of PAN in March, 2004 and was allotted a PAN only on 26th March, 2004. The bank account was open on 29th March, 2004 by depositing a cash of Rs. 2,000/- in order to derive some benefit, the return in the status of HUF was filed for preceding assessment years 2002-03 and 2003-04. The return for assessment year 2004-05 was filed on 2nd June, 2004 declaring income of Rs.
88,250/-. The return of these years were not picked up for scrutiny. The return for assessment year under appeal 2005-06 was filed on 1st August, 2005 declaring income of Rs. 1,06,700/-. This was also not picked up for scrutiny. However, there was AIR information to the effect that assessee HUF deposited sum of Rs. 14,00,000/- in his bank account during the financial year 2004-05, therefore, in order to investigate the source of this deposit, proceedings u/s 148 were initiated. The assessee reiterated that a sum of Rs. 11,49, 000/- was available as cash in hand as on 31st March, 2004 and cash of Rs. 14,00,000/- were deposited out of the said sum. The assessee also filed copies of the wealth tax return for assessment year 2003-04 and 2004-05. The AO, however, did not accept contention of assessee and noted that the story put forth by the assessee appears only cook and buy story. Nothing has prevented the assessee from depositing the cash in the bank account instead of making deposit on different date from 5th May, 2004 to 23rd March, 2005 in a sum of Rs. 14,00,000/- when the bank facilities are available. The source of income is not proved, the assessee has no withdrawal for household purpose. The explanation of assessee was rejected and addition of Rs. 14,00,000/- was made to the returned income.
The assessee challenged the addition before the Ld. CIT(A) and reiterated the same submissions, however, Ld. CIT(A) noted that nature and source of cash of Rs.
14,00,000/- remained unexplained. Therefore, appeal of assessee has been dismissed.
Ld. Counsel for the assessee reiterated the submissions made before authorities below and referred to PB 24 which is reply filed at the original assessment proceedings in which assessee similarly explained that returns under Income Tax Act and Wealth Tax were filed for earlier years in which cash in hand have been shown. In the returns for assessment year 2004-05, the availability of cash in hand of Rs. 11,49,879/- have been shown in balance sheet filed with return copies which are filed at pages 17 to 19 of the paper book . P B 16 is processing of the return u/s 143(1) for assessment year 2004-05. He has also filed copy of the bank statement to show that on 5th March, 2005, assessee has withdrawn Rs. 2,00,000/- from its account it was not spent anywhere. It was available to assessee to make re- deposit of Rs. 1,00,000/- each on 21st March, 2005 and 23rd March, 2005. Ld. Counsel for the assessee submitted that AO has not made any inquiry on the documentary evidences filed by assessee. Therefore, addition is wholly unjustified.
On the other hand Ld. DR relied upon orders of the authorities below.
I have considered rival submission and material on record. The assessee in the original assessment proceedings submitted statement of receipt and payment of assessee for year, under the title “receipt and payment account”, along with statement of affairs as on 31st March, 2004 showing opening cash in hand along with Income Tax and Wealth Tax Return to show that in proceeding assessment year 2004-05, assessee has cash in hand as on 31st March, 2004 in a sum of Rs. 11,49,879/-. This return was accepted by the department while processing the return u/s 143(1) of the Act. The assessee has been taking this stand consistently before the authorities below. Further the Ld. CIT(A) in earlier appellate proceedings accepted the similar claim of assessee. However, the Tribunal restored the matter back to the file of AO with direction to examine the genuineness of the cash available with the assessee as shown in statement of affairs and also to see the household expenses.
Since in earlier year revenue department has accepted availability of the cash with the assessee as cash in hand as on 31st March, 2004, therefore, the same could not be disputed in subsequent assessment year under appeal. Whatever explanation was given by the assessee earlier in the statement of affairs and the return f income once accepted, unless some substantive material is brought on record against assessee, the revenue cannot change the stand subsequently. The AO did not make any inquiry on the same. Thus, assessee was having cash in hand of Rs. 11,49,879/- on the first day of the financial year as on 01.04.2004, therefore, such amount is available to assessee for making deposit in the bank account. The AO rejected the explanation of assessee because nothing prevented the assessee from making deposit in one go in the bank account of the assessee. However, it may not be a plausible reason to reject the explanation of assessee because the assessee made cash deposits in subsequent year under appeal out of the cash amount available with it, in his bank account, therefore, nothing adverse should be taken against the assessee. Further assessee is a HUF and according to explanation of Ld. Counsel for the assessee, household expenses were made by making withdrawals in the case of individual, therefore, such a reason is not valid to reject the contention of the assessee. Therefore, the cash in hand of the earlier year is available to assessee for making cash deposit in bank account in year under appeal. Similarly, the assessee has withdrawn Rs. 2,00,000/- on 5th March, 2005 from his bank account which is available to assessee to make re-deposit on 21st March, 2005 and 23rd March, 2005 in a sum of Rs. 1,00,000/- each. AO has not brought any evidence on record to prove that the amount withdrawn by the assessee from the bank account was utilized somewhere else for other purposes. Therefore, explanation of assessee should not have been rejected for availability of cash of Rs. 2,00,000/- for making re-deposit in the bank account. Thus, the assessee was having sufficient evidence to explain, it was having availability of the cash of Rs. 13,49,879/- which would explain the deposit of Rs. 14,00,000/- in the bank account of the assessee on different dates. In view of the above discussion, I set aside the orders of authorities below and delete the addition of Rs. 13,49,879/- out of Rs. 14,00,000/-. Appeal of assessee is partly allowed.
In the result appeal of assessee is partly allowed.
(Order Pronounced in the Open Court.)