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PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee under section 253 of the Income-tax Act (the Act)
is directed against the order of ld. Commissioner of Income-Tax (Appeals)-33 [ld. CIT(A)], Mumbai dated 05.11.2015, which arises from the assessment order passed under section 143(3) dated 18.02.2014 for Assessment Year 2011-12.
Brief facts of the case are that the assessee filed its return of income for Assessment Year 2011-12 on 29.11.2011 declaring total income of Rs. 1,45,79,150/-. The assessment was completed on 18.02.2014 under section 143(3). The Assessing Officer while passing the assessment order made addition of Rs. 34,63,200/-, and of Rs. 30,90,000/- under section 68 of the Shri Meet Milan Zaveri Act on account of cash deposit in the saving bank accounts in Development Credit Bank SB A/c No. 00510100060021 and other SB A/c No. 00510100072116, by treating it as unexplained credit. On appeal before the ld. CIT(A), the addition of Rs. 34,63,200/- in respect of deposit in SB A/c No. 00510100060021 was deleted, however, the addition of Rs. 30,90,000/- was confirmed. Therefore, further aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before us. The assessee has raised the following grounds of appeal:
“Being aggrieved by the order dated 05.11.2015 passed by the learned Commissioner of Income Tax (Appeals)-33, Mumbai. ["Ld. CIT(A)"] u/s 250 of the Income-tax Act,1961 (“Act”) your appellant prefers this appeal, among others, on the following grounds of appeal, each of which is without prejudice to, and independent of, the other: 1.1 On the facts and in the circumstances of the case, and also in law, the Ld. CIT(A) erred in confirming the addition of Rs.30,90,000/- made by the Ld. Assessing Officer as alleged unexplained cash deposits in the appellant's Savings Bank Account (A/c No.00510100072116) with Development Credit Bank Ltd. 1.2 The Ld. CIT(A) erred in rejecting the appellant's explanation that there was sufficient cash balance with the appellant for making these cash deposits. The Ld. CIT(A)'s inference that the appellant had no physical cash balance is based on mere surmises and conjectures, without there being any material on record. In view of above, the appellant prays that the aforesaid addition of Rs.30,90,000/- be deleted.
3. We have heard the ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the Revenue and perused the material available on record. The ld. AR of the assessee submits that the SB A/c No. 00510100060021 in Development Credit Bank, the assessee is joint account holder with his father and all deposits belongs to his father. - Shri Meet Milan Zaveri The assessee furnished sufficient explanation before the ld. CIT (A), therefore, the addition of Rs. 34,63,200/- was deleted. The assessee also explained that the assessee has sufficient cash balance in his cash book which establish the adequate cash in hand. The assessee has withdrawn the cash from bank on various dates. The ld. CIT(A) deleted the addition of Rs. 34,63,200/- and confirmed the remaining/other deposit of Rs. 30,90,000/-. The assessee furnished Wealth Tax Return for AY 2007-08 to 2009-10, before the ld. CIT(A), showing the sufficient cash balance with him. The copy of Wealth Tax Return was treated as additional evidence by ld. CIT(A). The ld. CIT(A) asked the Assessing Officer to submit his remand report. The Assessing Officer furnished his remand report dated 25.06.2015. The Assessing Officer in his report admitted that as per Wealth Tax Return the assessee as on 20.12.2010 the cash in hand as on 31.03.2010 was Rs. 30,58,123/-. The Assessing Officer also furnished his remand report on the other addition of Rs. 34,63,200/-. The ld. CIT(A) after considering the contention of assessee and the remand report observed that amount of Rs. 34,63,200/- was deposited on 22 occasions.
However, the cash deposit of Rs. 30,90,000/- there was 17 transactions of deposit, still the additions were confirmed. The ld. AR for the assessee submits that he has already placed on record the copy of Wealth Tax Return for Assessment Year 2008-09, 2009-10, 2010-11 & 2011-12 along with statement of net Wealth on 31.03.2008, 31.03.2009 and on 3 Shri Meet Milan Zaveri 31.03.2010. The assessee also filed Wealth Tax Return of father of assessee for Assessment Year 2008-09 to 2011-12. The assessee has further o filed statements showing date-wise details of cash transaction in Financial Year 2007-08, 2008-09 & 2009-10 along with Bank Passbook and statement of Development Credit Bank for the same period, details of cash transaction and bank statement in Savings Bank account with Development Credit Bank of assessee’s father, copy of Income-tax Return for assessee’s father for AY 2011-12, copy of cash transaction and bank statement of assessee with Development Credit Bank for Financial Year 2010-11 along with copy of Cashbook for Financial Year 2008-09 to 2009-10 showing the cash balance in the hand of assessee. All the documentary evidences clearly show that the assessee has sufficient cash in his hand. The revenue has not disputed the wealth tax return of the assessee.
In support of his submission, the ld. AR of the assessee relied upon the decision of Hon’ble Gujarat High Court in case of CIT v/s Manoj Indravadan Chokshi [2014] 50 taxmann.com 419 (Guj HC), Karnatak High Court in PCIT v/s Basetteppa B. Badami [2018] 93 taxmann.com 66 (Karnataka HC), decision of Tribunal in Jaspal Singh Sehgal v/s ITO [2017] 83 taxmann.com 246 (Mumbai-Trib.), ACIT v/s Joginder Paul [2015] 58 taxmann.com 289 (Chandigarh-Trib.). The ld. AR submits that the decision of Hon’ble Supreme Court in Sumati Dayal v/s CIT [1995] 80 4 ITA No.494/M/16- Shri Meet Milan Zaveri TAXMAN 89 (SC), CIT v/s Durga Prasad More [1971] 82 ITR 540 (SC), relied by ld CIT (A) are not applicable on the facts of the present case.
On the contrary, the ld. DR for the Revenue supported the order of authorities below. The ld. DR for the revenue submits that the assessee failed to substantiate his contention before the lower authorities. The ld. DR further submits that there was no sufficient evidence to prove the sufficient cash in hand with the assessee. As the assessee failed to prove the source of cash deposit in his SB Account during the relevant Financial Year; therefore, the lower authority confirmed the addition.
We have considered the rival submission of the parties and have gone through the orders of authorities below. The Assessing Officer made the addition on account of cash deposit of Rs. 30,90,000/- holding that the assessee failed to give any satisfactory explanation for the source and nature of cash deposit. We have noted that before the First Appellate Authority, the assessee furnished copy of Wealth Tax Return for AY 2007-08, 2008-09 & 2009-10, showing the sufficient cash in his hand. The copy of Wealth Tax Return furnished by assessee was treated as additional evidence by ld CIT(A). The ld. CIT(A) directed the Assessing Officer to furnished his remand report on such additional evidence. The Assessing Officer vide his report dated 25.06.2015 furnished the remand report. In the remand report the assessing officer stated “As per Wealth Tax Return filed by assessee on 20.12.2010, the cash in hand as on 31.03.2010 is Rs. 5 Shri Meet Milan Zaveri 30,58,123/- which tallies with the opening balance of cash as per books of assessee”. The assessee further vide his submission dated 21.01.2015 submitted that the cash in hand was accumulated from Financial Year (FY) 2007-8 onwards and that cash balance entries in cashbook for FY 2007-08 to 2010-11 are corroborated by bank statement to prove the source of cash with summary of opening cash balance and cash inflow and outflow. The closing balance for the period of 01.04.2007 to 31.03.2010 was also furnished. The ld. CIT(A) discarded the documentary evidence furnished by assessee holding that there are number of loopholes in the submission of assessee. The ld. CIT(A) observed that on a number of occasion cash was withdrawn from the bank and was deposited again, which prove that physically cash was not available with the assessee on the date of withdrawal, otherwise, there was no need for withdrawing the cash from the bank. In FY 2009-10, the assessee claimed cash balance of Rs. 16,44,168/- and withdrawal till 20th April 2009 is Rs. 1,10,000/-. On 8th, 10th and on 18th July 2009 the withdrawal is Rs. 1,00,000/-, 50,000/- and 1,50,000/- respectively. Similarly in FY 2009-10 the withdrawal is of Rs. 2,00,000/- on 19th July 2015 (may be wrongly mentioned instead of July 2010) and cash in hand was claimed at Rs. 10,00,000/-. We have noted that the ld. CIT(A) has not given any finding on the Wealth Tax Returns for AY 2007-08 to 2009-10, which were accepted by Assessing Officer. No comments were made on cash flow statement and on 6 ITA No.494/M/16- Shri Meet Milan Zaveri statement of Bank Account. The Assessing Officer has not brought any material to show that amount deposited were from undisclosed sources. The assessing officer made the addition of entire deposit during the financial year.
The Co-ordinate Bench of Mumbai Tribunal in Jaspal Singh Sehgal v/s ITO (supra) held that where assessee furnished details cash summary showing inflow and outflow of cash for relevant year, in absence of any material to show that cash withdrawal was utilized elsewhere by the assessee, benefit of cash withdrawal by the assessee from bank account against amount of cash deposit into bank should be given. In ACIT v/s Joginder Paul (supra) it was held that where cash had been duly reflected in the Wealth Tax Return, no addition was called for.
Further, the Hon’ble Karnataka High Court in case of PCIT v/s Basetteppa B. Badami (supra) held that where closing balance of cash in hand for preceding year was sufficient to explain cash deposit in Bank in subsequent year, no addition can be made as unexplained money. The Hon’ble Gujarat High Court in case of CIT v/s Manoj Indravadan Chokshi (supra) held that one source of cash deposit is explained subsequent withdrawal is not required to be explained.
The case law relied by ld. CIT (A) in case of Sumati Dayal v/s CIT and in Durga Prasad More (supra) are not applicable on the facts of the present case. In case of Sumati Dayal (supra) it was held that the department 7 Shri Meet Milan Zaveri cannot act unreasonably. And in Durga Prasad More (supra) it was held that apparent must be considered real until it is shown that there are reasons to believe that the apparent is not real. However, in the present case the assessee has explained the cash in his hand by showing the documentary evidences in the form of wealth tax returns, which was accepted by assessing officer in his remand report. No adverse material was brought on record by assessing officer to discard the contention of the assessee.
In view of the above factual and legal discussion, in our view, the assessee has sufficiently explained the source of money by furnishing Income-tax Return from AY 2007-08 to 2009-10 by showing the sufficient cash balance in his books. In absence of any material, the addition of entire cash deposit is not sustainable, when the assessee has given sufficient explanation. Therefore, the grounds of appeal
raised by assessee are allowed.
11. In the result, appeal filed by assessee is allowed.