Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH - ‘SMC’ NEW DELHI
Before: SHRI BHAVNESH SAINI
This appeal by assessee has been directed against the order of Ld. CIT(A) (1) Gurgaon dated 3rd January, 2016 for asstt. Year 2011-12, challenging the addition of Rs. 22,16,500/- on account of cash deposit in the bank account.
Briefly the facts of the case are that AO has noted in the assessment order that the assessee for year under consideration had cash deposits of Rs. 25,66,500/- in his bank account maintained with Corporation Bank, Maneser. The assessee was asked to produce the source of this cash deposit along with the evidence to support his claim.
The assessee stated that the amount was taken from his mother but could not produce any evidence in this regard and stated that same will be submitted shortly. Further the assessee filed a ikrarnama and certificate from village Sarpanch that his mother is legal heir of his maternal grandmother (mother’s mother), however, the assessee could not furnish any evidence to prove the source of cash deposits. Hence the same was treated as undisclosed income by the AO within the meaning of section 69A of the I.T. Act and made addition of Rs. 25,66,500/- to the income of the assessee. The assessee at the appellant proceedings moved application for additional evidence in the form of above mentioned ikrarnama and a copy of the bank statement of his grandmother. The assessee requested for admission of the same as additional evidence. The AO has filed his comments on the same which is reproduced on the impugned order in which the AO reiterated the facts stated in the assessment order and also submitted that assessee replied that the cash was arranged from his mother through gift and her mother got this cash from her own mother. It was also stated that cash was withdrawn from the bank account of maternal grandmother of the assessee (late Smt. Saraswati Devi). The assessee furnished copy of ikrarnama only and not source of the cash deposit was furnished. The AO objected to the admission of the additional evidence. The AO also reproduced the bank account of late Smt. Saraswati Devi and stated that from her account there is a withdrawal of Rs. 25 lac on 18th August,
Ajit Singh vs. ITO 2009 and Rs. 42 lacs on 9th October, 2009. It is stated that she has received compensation but no evidence has been furnished. Therefore receipt of compensation remained unverified. No gift deed if any is executed by Smt. Saraswati Devi maternal grandmother in favour of Smt. Vidya Devi mother of the assessee. Only copy of the ikrarnama is filed which also speaks compensation equivalent to one acre is to be given to Smt. Vidya Devi mother of the assessee. No other details have been mentioned. The assessee at the remand proceedings explained cash in hand of Rs. 30, 70,000/- on 1.4.2010 and out of it cash has been deposited in his bank account after a gap ranging 3-10 months of withdrawal from the bank account of his grandmother Smt. Saraswati Devi. No explanation of when the amount was received and purpose of keeping cash have explained. The AO therefore reported that creditworthiness and genuineness of the transaction remained unapproved and requested the Ld. CIT(A) to dismiss the appeal of assessee.
The assesee in the rejoinder reiterated the same facts that Late Smt. Saraswati Devi maternal grandmother was residing with the family and has given amount to his mother Smt. Vidya Devi who in turn have given the amount to the assessee.
Ld. CIT(A) admitted the additional evidence i.e. copy of the bank account of Smt. Saraswati Devi under Rule 46A of the I.T. Rules. Ld. CIT(A) gave benefit of withdrawal and re deposit in his findings, however confirmed the addition to the extent of Rs. 22,16,500/-. His findings in paras 3.6 to 3.9 are reproduced as under :-
“3.6 On merits of the contention, I have given careful consideration to the arguments of the appellant. The Assessing Officer has noticed that the appellant has deposited cash amounting to Rs. 25,66,500/- in his bank account with Corporation Bank, Manesar. The following is the relevant cash deposits in the account :-
Date of deposit Amount deposited
16.04.2010 61,500 16.04.2010 5,000 03.06.2010 50,000 07.10.2010 8,00,000 08.10.2010 5,00,000 10.11.2010 8,00,000 16.11.2010 50,000 21.02.2011 2,50,000 10.03.2011 50,000 Total 25,66,500
The above mentioned deposits of cash amounts have started from April 2010 till March 2010 but the main deposit is in October 2010 (Rs. 13 lakhs) and November 2010 (Rs. 8.5 lakhs). The explanation of the appellant is that his grandmother (motehr’s mother )originaly belong to Rajasthan but was staying with the appellant as she had no legal heir. After the death of grandfather, she inherited some landed property which was due to receive certain compensation from Rajasthan Government. The grandmother had executed an ikararnama 09.11.2009 In the favour of the mother of appellant (Vidya Devi) consenting to either give amount of compensation equivalent to one acre or transfer one acre land to her. The grandmother subsequently in her lifetime got compensation from Rajasthan Government in lieu of acquisition of her land. This compensation was deposited in the aforesaid bank with the Rajasthan Bank Ltd. It is contended that in the month of August and November, 2009, the maternal grandmother withdrew large cash from her account from the bank of Rajasthan Ltd. and the cash reached the appellant as both the mother of appellant and grandmother were living with him. The Page 4 of 9 appellant further contended that out of the aforesaid cash amounts periodically some cash was given to him by her maternal grandmother as he was taking care of her. It was this cash which has been deposited in the bank account.
3.7. It is a matter of record that cash withdrawals have been made from the account of grandmother but the Assessing Officer has challenged the contention stating that receipt of compensation of maternal grandmother has remained unverified. There is no gift deed executed by maternal grandmother and lastly there is a gap of 3 to 10 months between the withdrawal made from the Bank of Rajasthan and the deposits made in the Corporation Bank account of the appellant. In the consideration of the factual situation mentioned above the appellant has merely made a statement that the cash belongs to his maternal grandmother but no evidence has been produced and no independent witness has been examined to substantiate the version that the cash was actually given by the maternal grandmother to the appellant.. The gap of deposit of cash and particularly such large cash has also not been explained by the appellant even during the appeal proceedings. It is seen that the maternal grandmother withdrew cash on 18.08.2009 (Rs. 25,00,000/- and 09.10.2009 (Rs. 42,00,000/-) which makes a total of Rs. 67,00,000/-. The first large outflow to appellant if believed has happened only in October 2010 which is almost after one year and as admitted the Grandmother was an old lady and it is unexpected that she can keep such large cash with her and if that has happened no independent statement of any person has not been recorded who could testify that such large cash was kept in personal custody for a large period of time. Further, if maternal grandmother was living with the appellant, it is much more convenient to keep such large cash in the bank account. The contention of the appellant is unreliable hence rejected.
3.8 However, the other part of the contention that there has been cash withdrawal and redeposit in the corporation bank of the appellant and the benefit of the same need to be given to the appellant needs consideration. For this purpose, the activity of cash deposit and withdrawal in the corporation bank account of the appellant is posted in a table as under :-
Date Amount Deposited Date Self withdrawal 16.04.2010 61,500 16.04.2010 5,000 07.06.2010 26,500 03.06.2010 50,000 16.11.2010 5,00,000 07.10.2010 8,00,000 20.11.2010 1,00,000 08.10.2010 5,00,000 25.11.2010 20,000 Page 5 of 9 10.11.2010 8,00,000 18.01.2011 20,000 16.11.2010 50,000 21.02.2011 2,50,000 10.03.2011 50,000 Total 25,66,500 It can be seen above, that there has been withdrawal of Rs. 5,00,000/- on 16.11.2010 and which is sufficient to cover deposit of the following cash on the following dates :
16.11.2010 50,000 21.02.2011 2,50,000 10.03.2011 50,000 The appellant is entitled to benefit of Rs. 3,50,000/- which has been re-deposited from the amount withdrawn.
3.9 In consideration of the matter above, after giving the benefit of Rs. 3,50,000/- out of the total cash deposit of Rs. 25,66,500/-, the balance amount of Rs. 22,16,500/- remains as unexplained cash deposit in the bank account. The ground of appeal to that extent is dismissed and addition to the extent of Rs. 22,16,500/- is sustained.”
It may be noted earlier the appeal of assessee was dismissed for default. However the miscellaneous application of assessee was allowed and appeal was refixed for hearing.
Ld. Counsel for assessee reiterated the submissions made before authorities below and submitted that Smt. Saraswati Devi received compensation and amount was deposited in bank account which in turn was given to Smt. Vidya Devi mother of the assessee and that same was given to the assessee which was deposited in bank account of the assessee. On the other hand Ld. DR relied upon orders of the authorities below and submitted that assessee has failed to prove source of the Page 6 of 9 cash deposit in his bank account. Therefore appeal of the assessee may be dismissed.
I have considered rival submissions and do not find any justification to interfere with the orders of the authorities below. It is not in dispute that there are cash deposits amounting to Rs. 25,66,000/- in the bank account of the assessee on various dates i.e throughout the year. The assessee explained that he has taken this amount from his mother for deposit but no evidence of source of cash with his mother Smt. Vidya Devi was filed. The assessee further explained that Smt.
Saraswati Devi maternal grandmother of the assesee gave the cash to his mother Smt. Vidya Devi who has received compensation from Rajasthan Govt. the grandmother has executed ikrarnama in favour of Smt. Vidya Devi. The assessee also explained that Smt. Saraswati Devi has withdrawn the amount from her bank account which was available to his mother for giving cash to the assessee. However the AO has challenged this contention because the receipt of compensation by Smt.
Saraswati Devi remained unverified. Further there is no gift deed executed by Smt. Saraswati Devi in favour of Smt. Vidya Devi. There is a huge gap between the withdrawals from the bank account of Smt.
Saraswati Devi and deposit in the bank account of the assessee.
Whatever contention was raised by assessee that cash belong to Smt.
Saraswati Devi who in turn gave Smt. Vidya Devi and then given to the assessee have not been proved through any evidence or material on record. No independent witness has been produced to substantiate the fact that cash was actually given by Smt. Saraswati Devi. How a huge cash is kept by Smt. Saraswati Devi is not explained. Ld. CIT(A) and the AO have noted that Smt. Saraswati Devi withdrew cash on 18th August, 2009 in a sum of Rs. 25 lacs and on 9.10.2009 there is a withdrawal of Rs. 42 lacs in cash. However the assessee has been making cash deposits in his bank account after gap of long period on different dates.
If any cash amount is available to mother of the assessee which is alleged to have been given to the assessee, it is not explained why assessee was making deposits in his bank account on different dates of different amount and why full amount was not deposited in his bank account at the earliest. This itself create a serious doubt in the explanation of the assessee of availability of the cash through his grandmother. Filing a copy of ikrarnama and certificate from village Sarpanch will not prove the source of cash deposited in the bank account of the assessee. It therefore stands proved on record that assessee did not produce any evidence of source of cash deposits in his bank account. In the absence of any cogent and reliable evidence on record, I am of the view no interference is called for in the matter. It may be noted that Ld. CIT(A) has already extended reasonable benefit of cash withdrawal and redeposit in the bank account of the assessee.
Therefore, Ld. CIT(A) was justified in confirming the addition of Rs. 22,16,500/-. The appeal of the assessee has no merit. The same is accordingly dismissed.
In the result appeal of the assesee is dismissed.