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Income Tax Appellate Tribunal, ‘A ‘ BENCH, KOLKATA
Before: Shri P.M. Jagtap, & Shri S.S.Viswanethra Ravi
This appeal filed by the Assessee is against the order of the learned Commissioner of Income-tax (Appeals), 4, Kolkata dated 06- 06-2016 for the assessment year 2012-13.
The only effective issue is to be decided as to whether the CIT-A is justified in confirming the impugned addition made on account of unexplained cash credit in the facts and circumstances of the case.
Brief facts of the case are that the assesse is an individual and director of a company derives his income from salary and from other sources. The assesse filed his return of income declaring total income of Rs.32,35,337/-. The AO determined the total income of assesse at Rs.63,91,340/- by making additions on account of cash deposits and fixed deposit vide his order dt. 31-03-2015.
According to AO, the assesse deposited cash of Rs.24,35,000/- in his bank of account of Standard & Chartered Bank and Rs.3,60,000/- in other bank account. The AO asked the assesse to explain the sources of said cash deposits. In response to which, the assesse submitted that the cash in hand as on 31-03-2012 was of Rs.28,71,603/- and in support of his contention filed income-tax returns of earlier years and balance sheet as on 31-03-2011. The AO examined the submissions together with evidences as produced by assessee and opined that the assessee during the year under consideration derived income from salary, redemption/sale/Mutual Fund/shares, dividend, interest on fixed deposits etc and there was no withdrawals from the bank account nor cash receipts. The submissions of assesse having opening cash in hand as on 1-4-2011 has been rejected for not furnishing any evidence. Further, cash deposit of Rs.3,60,000/- as found in other bank totaling to Rs.28,00,000 ( Rs. 24,40,000 + Rs. 3,60,000 ) and added to the total income of assessee.
Aggrieved, the assesse preferred an appeal before the CIT-A. and it was contended that the assessee has sufficient cash-in-hand and the same carried forward and deposited in the bank, besides minor daughters’ deposits also, supporting which balance sheet and IT Return acknowledgement were filed. Further, it was also contended that the addition u/s. 68 of the Act is not maintainable and placed reliance on various decisions of the Hon’ble Supreme Court/High Courts in the cases of Lakhmani Mewal Das reported in 103 ITR 437, 448(SC), SR Venkata Ratnam reported in 127 ITR 207 (Kar), Dhakeswar Cotton Mills reported in 26 ITR 779(SC), Dhirajlal Girdharilal reported in 26 ITR 736(SC) and Uma Charan Shaw & Bros reported in 371 ITR 271 (SC). The CIT-A confirmed the order of AO. Relevant portion of CIT-A’s order is reproduced herein below:- “4.2 I have considered the submissions of the AR of the appellant along with case laws relied upon by him. I have also gone through the assessment order. I find that appellant is a salaried persons and income consists of salary and income from other sources. I find that based on the AIR information available with AO, the appellant was asked to explain the cash deposit of Rs.28,00,000/- in his bank accounts. In response to this the appellant has explained that he has deposited cash of Rs.24.35 lacs in his bank account with Standard Chartered Bank and he has also deposited cash of Rs. 36.60 lacs in other bank accounts out of his past savings and accumulation. The appellant explained that he had made cash deposit out of cash balance in hand of Rs.28,71,603/- as on 01.04.2011 and he has also filed copies of the balance sheet as on 31.03.2011. I find that the AO has observed that there was no credit entry in the books except cash deposited in Bank out of the alleged brought forward cash balance from earlier years for which Balance Sheet as on 31.03.2011 was submitted before AO. Thus the appellant has contended that he has discharged the onus placed upon him in explaining the cash deposits in his bank accounts. I find that the appellant is a salaried employee and in the balance sheet filed by the appellant himself. I find that there is an outstanding personal loan of Rs.21,75,811/-, housing loan of Rs.5,24,265/-, unsecured loan from two parties amounting to Rs.12,00,000/- and current liabilities in the nature of Advance against Flat amounting to Rs.15,59,945/-. Thus the appellant has a total outstanding loan of Rs.29,35,756/- as on 31.03.2011. I find that no prudent person will carry cash in hand of Rs.28,71,603/- and also carry huge interest bearing liabilities in th nature of loan instead of repaying the debts due from him. I fail to find any reason for not depositing the alleged cash of Rs.28,71,603/- into any of the five bank accounts maintained by the appellant. Thus the appellant’s version is held to be untenable and the action of AO in treating this cash deposit as unexplained money of the appellant is held to be justified. This ground of appeal is dismissed.”
6. Before us the ld.AR reiterated his same submissions made before the CIT-A as well as before the AO. He submits that the assesse has two minor daughters, namely Sonakshi Ganguly & Sudeksha Ganguly, whose income have been included in computing the income of assesse and the money belonging to minor daughters have been shown as unsecured loan bearing no interest in the balance sheet of assessee. Further, he referred the income declared by assessee for the last 3 years as under:-
A.Y Income declared (Rs.) 2009-10 20,15,040 2010-11 20,86,554 2011-12 25,94,958 2012-13 32,35,537
He argued that the assesse had sufficient cash in hand and deposited the same in the two bank accounts, which were the accumulation of carried forward of earlier years. He submits that the assessee proved his case before the authorities below and urged to allow the appeal of assessee.
On the other hand, the ld. DR submits that having accumulation of cash in hand, not proved by assessee before the both the authorities below. The ld. DR referred to the order of AO and argued the AO found no cash withdrawals/receipts. Further, it is an afterthought to submit that the cash deposits consists minor daughters’ deposits and referred to para 4.2 of the CIT-A order and supported the view taken by the CIT-A.
Heard rival submissions and perused the record including the case laws as relied on by the ld.AR of assessee. It is noted from the record that the assessee filed cash flow statement for A.Y 2011-12, wherein it shows brought forward balance of Rs.19,44,603/-, Rs.12,00,000/- on behalf of minor daughters and other deposits to an extent of Rs. 4,00,000/-. It is noticed from summary of cash flow statement for the A.Y under consideration, the assessee has shown cash in hand of Rs.28,71,603/ and deposited cash to an extent of Rs.24,40,000/- in Standard & Chartered Bank & other bank account of Rs.3,60,000/-. On perusal of balance sheet as on 31-03-2011, at page-16 of the paper book, shows that cash in hand is of Rs.28,71,603/- and also brought forward under the head ‘capital account of Rs.2,02,89,602/-. As on 31-03-2012 the balance sheet at page-17 shows cash in hand of Rs.31,254/-. It is also noted from balance sheet as on 31- 03-2012 unsecured loans of Ms. Sonakshi Ganguly and Ms. Sudeksha Ganguly to an extent of Rs. 14,00,000/-. But, no evidence or whatsoever has been produced either before the authorities below or before us to show the basis of showing the unsecured loan in respect of said two minor daughters and accumulated opening cash in hand available as on 1-4-2011 relevant to A.Y under consideration. It is observed from the orders of both the authorities below that the assessee could not produce any evidence in respect of source of cash deposits in the above said two bank accounts except making bald statements that those were the cash accumulated and brought forward from earlier years. In this regard, we agree with the finding of CIT-A that no prudent person will carry cash in hand and also carry huge interest bearing liabilities in the nature of loan instead of repaying debts due from him. Therefore, in our opinion that the assessee failed to prove the source of cash deposits and the submissions made in this regard by the ld. AR as discussed in the aforementioned paragraphs are rejected. Thus, ground nos. 1 to 3 involving the impugned addition as confirmed by the CIT- A is dismissed.