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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आदेश / ORDER
PER D. KARUNAKARA RAO, AM :
This is the appeal filed by Assessee against the order of CIT(Appeals)-2, Pune dated 18.12.2015 for the assessment year 2011-12.
Briefly stated relevant facts include, Assessee is an individual deriving ‘income from other sources’. Assessee filed return of income declaring total income of Rs.3,65,459/-. The Assessing Officer during assessment
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proceedings u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as
‘the Act’) assessed the total income of assessee at Rs.33,09,460/-. In the
assessment proceedings, the Assessing Officer made addition of
Rs.29,44,000/- u/s. 69A of the Act. Contents of Para 4 of assessment order
are relevant in this regard.
2.1 The backgrounds facts leading to the said addition of Rs.29,44,000/-
includes that Assessee deposited cash to the tune of Rs.53,50,000/- in the
savings bank account in Vishweshwar Sahakari Bank Ltd. Assessing Officer
asked the assessee to furnish requisite documents explaining the source of
said cash deposits in bank account. Assessee submitted that he is a member
and Karta of HUF, which owns a piece of land. The said land, located at
Urulikanchan, was sold for sum of Rs.71 Lakhs. The HUF reflected the said
transaction in its IT return and paid the taxes due on the said transaction.
2.2 Regarding the source of Rs.53,50,000/-, the assessee submitted that
the purchaser of the land gave the consideration in both the names of the
assessee as well as his mother. Assessee and his mother withdrew the cash
from the bank individually and kept the same as cash in hand. The assessee
further submitted that the cash was deposited out of withdrawals for various
bank accounts during the year 2008-09, 2009-10 and 2010-11. Assessee did
not file return of income for the assessment year 2009-10 and 2010-11 as the
income was below taxable limit. After considering contents in the Balance
Sheets prepared by assessee for both assessment years 2009-10 and 2010-11,
Assessing Officer noticed closing balance as on 31.03.2010 is of
Rs.34,33,500/-. Questioning correctness of the said cash balance, the
Assessing Officer rejected the claim of the assessee and proceeded to make
addition in the following manners:
3 ITA No.450/PUN/2016 A.Y.2011-12
“4. I have considered the submission made by the assessee. However, the same is not found to be acceptable due to the following reasons:
i. The assessee has claimed that the cash deposited in the Bank Account is out of sale of Land of HUF at Urulikanchan. The amounts have been withdrawn by himself and his mother. This plea is not acceptable, since HUF has filed separate I.T. Return disclosing the Capital Gain on sale of land.
ii) It is claimed that the cash deposited pertains is withdrawals made from various banks during the year 2008-09, 2009-10 and 2010-11. It is noticed that the assessee did not file return of income for the A.Y.2009-10 and 2010-11. Since the income was below taxable limit. The assessee has now prepared Balance Sheets for both A.Y.2009-10 and 2010-11 and shown closing cash balance as on 31.03.2010 of Rs.34,33,500/- The assessee has made all the paper work to explain that the cash deposited in the bank account is out of opening cash balance of Rs.34,33,500/-. It is rather doubtful that when the assessee had bank accounts in various bank and was earning income from other sources and not income from Business, why such Bank Balance was shown of Rs.34,33,500/- as on 31.03.2010. This is so done so as to explain the source of cash deposited in Vishweshwar Sahakari Bank Ltd. of Rs.53,50,000/- during the previous year relevant to the A.Y.
iii) The opening cash balance of Rs.34,33,500/- is not found to be correct and excluding cash balance of Rs.15,95,000/- pertaining to A.Y.2009-10 and earlier period is considered as available as opening cash balance which comes to Rs.18,38,500/- (3433500-1595000). It is seen from the details and extracts of Bank accounts of the assessee that assessee has withdrawn cash of Rs.32,25,500/- from various bank accounts during the previous year relevant to the A.Y. The assessee has re-deposited cash of Rs.9,45,000/- in the previous year and has shown cash in hand of Rs.17,13,000/- as on 31.03.2011. Considering the above cash available for depositing into the Vishweshwar Sahakari Bank are of withdrawals made during F.Y.2010-11 comes to Rs.5,67,500/-.
iv) After considering the above the unexplained cash deposited in the Vishweshwar Sahakari Bank is considered as under:
Cash deposited in Vishweshwar Sahakari Bank Ltd. Rs.53,50,000/-
Less: Opening cash balance considered as Discussed above Rs.18,38,500/-
Add: Out of withdrawals made during F.Y.2010-11 from various Bank as discussed Above Rs.5,67,500/- ________________________
Rs.24,06,500/-
Unexplained cash deposited in Bank Account Rs.29,44,000/-”
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2.3 From the above, it is evident that the Assessing Officer rejected the cash
balance working provided by the assessee and after considering the
withdrawal of cash from other banks account in the year under consideration
allowed the computed cash available out of transactions totaling
Rs.24,06,500/-and taxed the balance cash deposit amount of Rs.29,44,000/-
(Rs.53,50,000/-- Rs.24,06,500/-), and made addition of the same amount i.e.
Rs.29,44,000/- u/s. 69A of the Act.
2.4 Aggrieved with the order of Assessing Officer, assessee filed appeal
before the CIT(A).
During First Appellate proceedings before CIT(A), Assessee made various
submissions for the entire relief including that of Rs.29,44,000/-. However,
CIT(A) took objection to the manner of granting relief by the Assessing Officer
to the extent of Rs.29,44,000/-. Thus, the CIT(A) enhanced the addition by
disallowing the entire cash deposit of Rs.53,50,000/-. The reasons given by
the CIT(A) in this regard are discussed in Para 6 and its sub-paras.
3.1 In summary, it is the view of CIT(A) that the withdrawal of cash from
various other banks represent withdrawals for personal purposes as the said
withdrawals are small in nature cannot be construed to move for depositing
back in the savings bank account of assessee with Vishweshwara Sahakari
Bank Ltd. The CIT(A) also rejected the arguments by way of peak Theory
principle advanced by the assessee during proceedings before him vide
discussion given in Para 6.3.1. Relevant discussion is given in para 6.2.2 of
the impugned order and same is extracted as under:
“6.2.2…………….. On a perusal of the bank accounts with UCO Bank, Central Bank of India and Bank of Maharashtra, it is seen that there are
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small periodical withdrawals ranging from Rs.10,000/-, Rs.4,000/- and Rs.5000/- etc. No prudent person will draw from his own account in small denomination over a period of time and deposit the same in another bank account to the tune of Rs.53,50,000/- In fact, the withdrawals in small denominations basically represent withdrawals for personal purposes which have been wrongly claimed as one of the source of huge cash deposits in the bank account maintained with Vishweswara Sahakari Bank. It is also emphasized that the appellant has not filed any return of income in the preceding A.Ys. i.e. 2009-10 and 2010-11 and therefore the Department did not have any opportunity to examine the source of deposits and withdrawals in the bank accounts in the earlier years. No linkage can be established between the small withdrawals and huge cash deposits in the bank account with Vishweshwara Sahakari Bank. Therefore, this line of argument is not acceptable.”
Aggrieved with the order of CIT(A), assessee filed appeal before the
Tribunal raising following grounds :
“1. The learned CIT(A) erred in law and on facts in enhancing the income of the appellant by Rs.24,06,000/- in respect of cash deposit into Vishweshwar Sahakari Bank Ltd. and thereby brining the entire cash deposit of Rs.53,50,000/- to tax u/s.69A without appreciating the source explained and supported by cash flow statement.
The learned CIT(A) erred in law and on facts in confirming the addition of Rs.29,44,000/- made by learned AO in respect of cash deposit in Vishweshwar Sahakari Bank Ltd. 3. The learned CIT(A) erred in law and on facts in not appreciating that the appellant received money from sale of property of HUF which were deposited in Bank accounts. The appellant has been consistently withdrawing cash from various bank accounts, which is not proved to have been spent elsewhere. The learned CIT(A) erred in rejecting the withdrawals from other banks as sufficient source for the cash deposit.
The appellant craves to add, alter, modify or substitute any ground of appeal at the time of hearing.”
Before us, on the relief given by the Assessing Officer in assessment
proceedings, Ld. Counsel for the assessee submitted that it is fact, assessee
withdrew the cash from various bank account amounting to Rs.24,06,500/-. It
is not the case of Assessing Officer that the said amount is utilized for any
other purposes and Assessing Officer does not appreciate the same. In the
absence of any evidence and satisfactory explanation regarding source of
Rs.53,50,000/- i.e. entire cash deposits into Vishweshwar Sahakari Bank
Ltd., Assessing Officer as well as CIT(A) granted relief to the assessee to the
6 ITA No.450/PUN/2016 A.Y.2011-12
tune of Rs.24,06,000/-. Therefore, the assessee is in appeal before the
Tribunal against enhancing the income of assessee by Rs.24,06,500/- in
respect of cash deposits into Vishweshwar Sahakari Bank Ltd brining entire
cash deposit of Rs.53,50,000/- to tax u/s.69A of the Act without appreciating
the source explained and supported by cash flow statement.
5.1 With regard to addition to Rs.53,50,000/- as against Rs.29,44,000/-,
made by Assessing Officer and confirmed by CIT(A), Ld. Counsel for the
assessee submitted that source of cash deposit to advance is sale proceeds of
land at Uralikanchan. The said advance was deposited in bank accounts from
which withdrawals were made. She further submitted that assessee received
money from ancestral land by cheque which was deposited in bank and
assessee has sufficient cash for explaining the cash deposits as per cash flow
statement.
Per contra, Ld. DR for the Revenue submitted that the manner of
withdrawals of cash from other banks accounts of the assessee and the
amount involved are the same amount which has been deposited in the
Vishweshwar Sahakari Bank Ltd. Eventually, Ld. DR has placed reliance on
the order of Assessing Officer and CIT(A).
We have heard both the parties and have perused the material available
on record. Total addition on cash deposits is Rs.53,50,000/-. It has two
segments i.e. (i) Rs.29,44,000/- and (ii) Rs.24,06,500/-. While the Assessing
Officer considered fair to restrict the addition to Rs.29,44,000/-, the CIT(A)
enhanced the balance sum of Rs.24,06,500/- for the reasons discussed above.
We find that it is an undisputed fact that the assessee demonstrated the cash
withdrawals from other banks to the tune of Rs.24,06,500/-. It is not the case
of CIT(A) that the said amount although smaller amounts of withdrawal was
utilized for other miscellaneous expenditure of assessee. In the absence of the
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same, in our view, discussion given by Assessing Officer in Para 4 already extracted above is considered a reasonable view. Therefore, we are of the opinion that enhancement made by the CIT(A) stands reversed upholding the order of Assessing Officer.
7.1 However, regarding the addition of Rs.29,44,000/-made by Assessing Officer and confirmed by CIT(A), we find that the reasoning given by the Assessing Officer as well as the CIT(A) are fair and reasonable. In our view, this findings does not call for any interference. Accordingly, grounds raised by the assessee are partly allowed.
In the result, appeal of the assessee is partly allowed.
Order pronounced on 05th day of October, 2018.
Sd/- Sd/- (�वकास अव�थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER
पुणे / Pune; �दनांक / Dated : 05th 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)-2, Pune. 4. The Pr. CIT-2, Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” ब�च, 5. पुणे / DR, ITAT, “B” 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.