PARAS SUNDERJI DEDHIA,MUMBAI vs. ITO 13(2)(4), MUMBAI

ORDER PER N.K. PRADHAN, A.M. This is an appeal filed by the assessee. The relevant assessment year is 2009-10. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-24, Mumbai and arises out of the assessment completed u/s 143(3) of the Income Tax Act 1961, (the ‘Act’).

Paras Sunderji Dedhia

filed by the assessee reads as under: The addition of Rs.9,56,686/- made by the Ld. Assessing Officer (AO) and the Ld. Commissioner of Appeals 24 may be deleted.

3. Briefly stated, the facts of the case are that Assessing Officer (AO) found from the AIR information that the assessee had deposited during the year under consideration total cash of Rs.13,20,700/- and Rs.10,54,200/- in his bank account with the Cosmos Bank Ltd., Pune and ICICI Bank Ltd., Bandra Kurla Complex, Mumbai. The AO added the above cash deposit of Rs.23,74,900/- u/s 68 as unexplained cash credit to the income of the assessee. 3.1 The dispute in the present appeal is the direction given by the Ld. CIT(A) to the AO to tax only Rs.9,56,686/-. The Ld. CIT(A) held as under: “Nevertheless, as per my finding given in preparas the amounts claimed to have been received from 38 loan creditors have not been accepted and consequently the repayment of amounts to loan creditors has also been ignored from the cash flow statement. Accordingly, the peak negative balance is worked out. If the deposits and withdrawals said to be pertaining to the 38 loan creditors are ignored, the peak negative balance would be Rs.7,56,686/- as on 14/10/2008 for the year under consideration, as per the cash flow statement. In other words, the assessee deposited his own money in the bank accounts to the extent of Rs.7,56,686/- which did not have any sources. Thus, the amount has to be taken as unexplained cash. Further, it is to be mentioned here, that there were some withdrawals made at ATM's which cannot be taken as amounts available for cash deposits for the reason that they are generally drawn in dire necessities. However, giving benefit of doubt to the assessee, in the absence of any conclusive evidence, that these withdrawals of ATM's were used for personal purposes, thereby, not Paras Sunderji Dedhia available for deposits. Only a sum of Rs.2,00,000/- is considered, not available as source (treating as drawings/personal expenses), out of total withdrawals of Rs.3,28,400/- through ATM's. Thus, Rs.7,56,686 + 2,00,000/- is considered as unexplained income of the assessee. Therefore the Assessing Officer is directed to retain only Rs.9,56,686/- and the balance amount has to be deleted.”

4. Before us, the Ld. counsel of the assessee files a copy of the cash book for the period 01.04.2008 to 31.03.2009 and copy of the remand report by the AO dated 06.06.2013. It is also submitted by him that the assessee has been operating two savings bank account i.e. one in ICICI Bank and the other in Cosmos Bank. In most of the cases, the assessee has withdrawn cash from ICICI Bank and deposited cash in Cosmos Bank and the same was explained to the AO as well as the Ld. CIT(A). However, they were not fully satisfied and the appeal was partly allowed confirming an amount of Rs.9,56,686/-. The Ld. counsel further submits that the assessee has taken cash loan from 38 parties for which he has submitted copy of acknowledgements filed by them. However, the Ld. CIT(A) has mentioned in his order that he could not verify the signature of loan confirmations which have been submitted by the assessee in support of the claim of cash loans.

5. On the other hand, the Ld. DR supports the order passed by the Ld. CIT(A).