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Facts
The assessee, Ravinder Grover, an individual and Director, faced an addition of ₹1,00,48,645/- by the AO for unexplained cash deposits in bank accounts for AY 2017-18, which included demonetization period deposits. The assessee contended that these deposits originated from prior cash withdrawals and available cash balance, providing comprehensive bank statements and cashbooks, but the CIT(A) upheld the addition.
Held
The Tribunal found that the assessee maintained a consistent practice of cash withdrawals and deposits, supported by bank statements and cashbooks demonstrating no negative cash balance. It ruled that the entire addition was based on suspicion without factual or legal basis, concluding that the assessee sufficiently explained the source of the cash deposits.
Key Issues
Whether the CIT(A) was justified in confirming the addition of ₹1,00,48,645/- on account of cash deposits in the bank account, despite the assessee's explanation of sourcing from prior withdrawals and available cash balance.
Sections Cited
143(3), 68, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI M. BALAGANESH & SHRI VIMAL KUMAR
O R D E R PER M. BALAGANESH, A. M.: The appeal in AY 2017-18, arises out of 1. the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. ITBA/NFAC/S/250/2023-24/1060326262(1) dated 31.01.2024 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 08.12.2019 by the Assessing Officer, ACIT, Circle-20(1), Delhi (hereinafter referred to as ‘ld. AO’).
The only issue to be decided in the appeal is as to whether the ld CIT(A) was justified in confirming the addition of ₹1,00,48,645/- on account of cash deposits in the bank account.
Ravinder Grover 3. We have heard the rival submissions and perused the material available on record. The assessee is an individual and one of the Directors of M/s Rohit Surgical Pvt Ltd. During the year, the assessee had shown income from salary, income from house property, income from other sources. The original return of income for assessment year 2017- 18 was filed by the assessee on 01.08.2017 declaring total income of ₹28,55,670/-. The assessee maintained the following bank accounts:-
Kotak Bank A/c No. -1811790465 2. Syndicate Bank A/c No.-90061010008014 3. HDFC Bank A/c No. 1592280000044 4. HDFC Bank A/c No. - 1441930000043 5. State Bank of India A/c No. 31916808361 6. HDFC Bank A/c - 1001000086536 4. The ld AO obtained bank statement of the aforesaid bank accounts from where he found that assessee had made total cash deposit of Rs. 1,00,48,645/- which included a sum of ₹35,75,500/- made during the demonetization period. The assessee was asked to explain the source of the same. The assessee furnished month-wise cash deposits, cash, withdrawals in tabular form, which are reproduced in pages 5 and 6 of the assessment order. From the same, it could be seen that the entire cash deposits were sourced from available cash balance and cash withdrawals made during the year. The assessee had also furnished the detailed narration of all the bank deposits and withdrawals during the year which fact is also mentioned in page 6 of the assessment order. The ld AO observed that the assessee furnished the cash book for FY 2014- 15, 2015-16 together with detailed narrations thereon. The ld AO merely doubted the huge cash withdrawals made by the assessee from the bank account and observed that this is beyond human probability to hold such huge cash balance and accordingly proceeded to add the entire cash deposits to have arose out of undisclosed sources and proceeded to
At the outset, we find that assessee had furnished the entire bank statement for the period of 01.04.2016 to 31.03.2017 which are enclosed at pages 13 to 31 of the Paper Book. The assessee also gave the details of cash balance available with him as under:-
31.03.2015 Rs. 5,92,219/- 31.03.2016 Rs. 12,32,219/- 31.03.2017 Rs. 21,58,574/- 31.03.2018 Rs. 15,70,574/-
The assessee also furnished the complete cashbook for the whole period of 01.04.2016 to 31.03.2017, which are enclosed at pages 34 to 45 of the paperwork which contains all the cash withdrawals and cash deposits made thereon. There is no negative cash balance on any single day as could be evident from the perusal of the said cash book. The assessee also gave the complete details of cash deposits made during different dates as required by the ld AO in the prescribed format as under:-
SNO Period Amount 1 Total cash deposit in Bank in F.Y. 2015-16 16,730,000.00 2 Total cash deposit in Bank from 01.04.2015 to 08.11.2015 11,815,000.00 3 Total cash deposit in Bank from 09.11.2015 to 31.12.2015 415,000.00 4 Total cash deposit in Bank from 01.01.2016 to 31.03.2016 4,500,000.00 5 Total cash deposit in Bank in F.Y. 2016-17 10,048,645.00 6 Total cash deposit in Bank from 01.04.2016 to 08.11.2016 5,023,145.00 i 7 Total cash deposit in Bank from 09.11.2016 to 31.12.2016 3,575,500.00 8 Total cash deposit in Bank from 01.01.2017 to 31.03.2017 1,450,000.00 Ravinder Grover 7. From the above, it could be seen that cash deposits made in the sum of ₹1,00,48,645/- during the year is less than that made in the immediately preceding year and aforesaid table depicts the conduct and practice followed by the assessee to make regular cash withdrawals and cash deposits. The assessee also furnished month-wise details of opening cash balance, cash withdrawal from banks, cash deposits in bank and closing cash balance in financial years 2014–15 & 15–16 . There is absolutely no case for the revenue to doubt the fact of cash withdrawal made from the banks by the assessee during the year. The entire addition has been made by a mere suspicion, surmise and conjecture without any basis either on facts or on law. Hence, we have no hesitation to hold that assessee is having sufficient cash balance on every day of cash deposits made in the bank account and accordingly, the entire cash deposits of Rs. 1,00,48,645/- stands properly explained. Accordingly, the grounds raised by the assessee are allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 29/08/2024.