DAGINA COLLECTION P. LTD,MUMBAI vs. DCIT 5(1), MUMBAI

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ITA 5865/MUM/2015Status: DisposedITAT Mumbai11 October 2017AY 2004-053 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the assessee had made substantial cash withdrawals from the same bank prior to the deposits in question. Therefore, the deposits were considered to be explained by these earlier withdrawals.

What were the facts?

The assessee deposited cash of Rs. 5,04,480/- into their ABN Amro Bank account. The Assessing Officer treated this as an unexplained cash credit. The assessee contended that the deposits were made from earlier withdrawals from the same bank.

What were the issues?

Whether cash deposited in a bank account can be treated as unexplained cash credit when the assessee demonstrates prior withdrawals from the same account that could explain the deposits.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, D Bench, Mumbai

Before: Shri P K Bansal & Shri R.L. Negi

For Appellant: Shri Nikesh Jain
For Respondent: Shri Purushottam Kumar
Hearing: 11.10.2017Pronounced: 11.10.2017

Per P.K. Bansal, Vice President

1.

This appeal has been filed by the assessee against the order of the CIT(A)-10, Mumbai dated 10.09.2015 for A.Y. 2004-05 by taking the following grounds of appeal: - “1. The Commissioner of Income Tax (Appeal) – 10, Mumbai erred in confirming the addition of Rs.5,04,480/- being cash deposited in ABN Amro Bank as unexplained cash credit u/s 68 of the I.T. Act. The Appellant submits that it has deposited the cash in ABN Amro Bank out of the earlier withdrawal from the Banks by the Appellant. Therefore, the Appellant prayed that the addition confirmed by the CIT(A) shall be deleted.”

2. The only issue involved in the appeal filed by the assessee is that the AO, while making addition in respect of cash deposited in ABN Amor Bank as unexplained cash credit did not consider the earlier withdrawal made by the assessee from the bans as the source of the said amount.

3. We heard the rival submissions and gone through the orders of the tax authorities below. We noted that the AO consequence of the assessment completed under section 143(3) r.w.s. 254 added a sum of M/s. Dagina Collection P. Ltd. `5,04,480/- under section 68 of the Income Tax Act in respect of the cash deposited in the bank amounting to `3,00,000/- on 29.01.2004 and `2,00,000/- on 13.02.2004. We noted from the copy of the bank account as appearing under para 4.2.1 of the order of the CIT(A) that the assessee has made withdrawals from the same bank account prior to the aforesaid deposits. The details of cash withdrawals and deposits are given as under:-

Cash Withdrawal Cash deposited Date Amount Bank Date Amount Bank 31.10.2003 4,480 ABN Amro - - - Bank 15.11.2003 2,00,000 ABN Amro - - - Bank 25.11.2003 2,50,000 ABN Amro - - - Bank 29.01.2004 3,00,000 ABN Amro - - - Bank 15.12.2003 1,50,000 ABN Amro - - - Bank 13.12.2003 62,000 Global Trust Bank - - - Ltd. 13.02.2004 2,00,000 ABN Amro - - - Bank Total 6,62,000 - Total 5,04,480 - On the basis of the said details it is apparent that the assessee made withdrawals of `4,50,000/- prior to the deposit of `3,00,000/- and similarly the assessee made withdrawal of `2,12,000/- prior to the deposit of `2,00,000/-. In view of this fact in our view the addition made by the AO cannot be sustained as in our opinion the deposits in the bank are covered within the withdrawal made by the assessee prior to that from the said bank account. We, therefore, delete the said addition.

4.

In the result, the appeal filed by the assessee stands allowed.

Order pronounced in the open court on 11th October, 2017.

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