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Facts
The Revenue challenged the CIT(A)'s decision to treat certain cash receipts as explained. Concurrently, the assessee filed a cross-objection against additions confirmed by the CIT(A) related to an advance for property, capital introduction from Smt. Vandana, household expenses, and unsecured loans, arguing a lack of basis and natural justice violation. The primary dispute centers on the nature of significant cash deposits made by the assessee and various additions confirmed by the CIT(A).
Held
The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s finding that cash withdrawals subsequently redeposited within a week were not unexplained. For the issues raised in the assessee's cross-objection concerning capital received from Smt. Vandana and advance for property, the Tribunal remanded the matter back to the Assessing Officer for further verification and examination.
Key Issues
Whether cash withdrawals redeposited into bank accounts constitute unexplained income; Whether additions related to capital introduction, advance for property, household expenses, and unsecured loans were justified.
Sections Cited
68
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Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: Sh. Kul BharatDr. B. R. R. Kumar
ORDER Per Bench: The present appeal and Cross Objection has been filed by the Revenue and the assessee against the order of ld. CIT(A)-1, Gurgaon dated 30.03.2017. 2. The Revenue has raised only one ground which are as under:
“1. The ld. CIT(A) has erred on fact and in law in treating the cash receipts as explained receipts and not taxable receipts in absence of any documentary evidence.”
2 CO No. 159/Del/2022 Hemant Kumar 3. The assessee has raised ground of Cross Objection which are as under:
“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making aggregate addition of Rs. 1,35,50,000/- (Rs.85,00,000/- Rs.50,50,000/-) u/s 68 on the following grounds and that too without any basis/material and evidence available on record and without following the principles of natural justice. Rs.85,00,000/- on account of advance received against property. Rs.50,50,000/- on account of capital introduction.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in exercising his jurisdiction in making an estimated addition of Rs.6,00,000/- on account of house hold expenses and that too without assuming jurisdiction as per law and without giving show cause notice to the appellant and in violation of principles of natural justice.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making aggregate addition of Rs.27,50,000/- on account of unsecured loan by treating it as alleged income of assessee u/s 68 of the Income Tax Act, 1961.” Cash Deposits:
As per the AIR, the assessee has deposited cash in the savings bank accounts maintained in different banks which are as under:
Sl. No. Name of the Bank Cash Deposited (Rs.) 1. IOB 4,05,09,500/- 2. Axis Bank 33,16,000/- 3. Axis Bank 1,25,06,000/- Total 5,63,31,500/-
3 CO No. 159/Del/2022 Hemant Kumar 5. The assessee submitted the cash flow statement before the Assessing Officer which is as under:
Opening cash balance 36,107 Add: Cash withdrawn from bank 5,46,98,798 Less: Cash deposited in bank 5,92,11,500 Less: Cash expensed off 23,83,109 Add: Advance received from properties 85,00,000 Add: Capital through Vandana 50,50,000 Closing balance 63,46,963
The AO after received of the reply concluded the assessment making addition of Rs.5,63,31,500/- on this issue.
Aggrieved, the assessee filed appeal before the ld. CIT(A) who deleted the addition except to the tune of Rs.85,00,000/- which is on account of advance for purchase of property and Rs.50,50,000/- received as capital from Smt. Vandana and Rs.6,00,000/- on account of household withdrawals.
Aggrieved, the assessee as well as Revenue filed appeal before the Tribunal.
Before us, the ld. DR submitted that in absence of any correlation between the withdrawals and the deposits, the decision of the ld. CIT(A) giving set off to the amounts deposited from the withdrawals cannot be accepted. It was argued that the assessee had to prove that it is the same cash which has been withdrawn has been re-deposited into the account and the record do not show any such relation.
4 CO No. 159/Del/2022 Hemant Kumar 10. On the other hand, the ld. AR contended that he had withdrawn cash amounting to Rs. 5,46,98,798/- which were used for the purpose of making cash deposits in the bank account. It was argued that the AO has rejected the assessee's contention on the ground that no supporting evidence was furnished to establish that the said cash receipts were actually explained receipts and not taxable receipts and the ld. CIT(A) has duly accepted.
Heard the arguments of both the parties and perused the material available on record.
It is undisputed fact on record that the assessee had withdrawn cash amounting to Rs. 5,46,98,798/-. This fact has been recorded in the assessment order too. The assessee had filed cash book showing that the amount withdrawn from bank had been deposited again within a week in his bank before the lower authorities which we have duly examined. The AO has not pointed out any other expenditure or investment made from the cash withdrawn.
In these circumstances, we hold that the ld. CIT(A) has rightly held that the cash withdrawn cannot be held to be unaccounted. Reliance is being placed in this regard on the decision of the Co-ordinate Bench of ITAT, Chandigarh in in the case of Sh. Bhupinder Singh Gill, and order dated 31.1.2014, in the case of Anil Gupta Vs. ITO in ITA No. 5643/Del/2013.
In the result, the appeal of the Revenue is dismissed.
5 CO No. 159/Del/2022 Hemant Kumar 15. With regard to CO No. 159/Del/2022 pertaining to the capital received from Smt. Vandana and the advance received in connection with proposed sale of property, both the parties fairly submitted that the matter needs verification and examination of the alleged transaction and documents thereof. Hence, in the interest of justice, the matter is remanded to the file of the Assessing Officer for appropriate enquiries as deemed fit. The AO shall afford an opportunity to the assessee to file the replies and evidences relied upon.
In the result, the appeal of the Revenue is dismissed and the Cross Objection of the assessee is allowed for statistical purpose. Order Pronounced in the Open Court on 08/03/2024.