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Income Tax Appellate Tribunal, DELHI BENCH “SMC-3” NEW DELHI
Before: SHRI S.V. MEHROTRA :
This is assessee’s appeal against the CIT(A)-20, New Delhi’s order dated 8- 10-2015 relating to A.Y. 2011-12.
Brief facts of the case are that the assessee, a civil contractor, in the relevant assessment year, filed his return of income declaring income of Rs. 7,99,190/-.
The case was selected for scrutiny under CASS for examination of the source of cash deposits of Rs. 53,62,204/- in the savings bank account of the assessee. In response to show cause notice, the assessee filed copies of his bank statements and cash book for the relevant period and explained that the cash deposits were made out of cash in hand available as per the cash book and the source thereof was withdrawals out of his OD account in Corporation Bank and savings bank account in the same bank. It was claimed that all the deposits made, were duly reflected in the books of account. The assessee also filed a cash flow statement in respect of withdrawals made from deposits made in his various bank accounts. AO observed that a perusal of the details and documents furnished by the assessee revealed that the explanation of the assessee was not completely borne out from available records. He further pointed out that the assessee was found to have claimed several cash payments from his bank account as contributing to cash in hand as per cash book. However, a closer look at the bank statements concerned revealed that many of such cash payments reflected in the bank statements were actually payments made to different persons whose names were mentioned against such cash payments. As such these payments could not add to the cash in hand available with the assessee and the amount of such cash in hand as claimed in the cash book. He, accordingly, pointed out that in respect of following cheques, since the names of persons were given, therefore, they could not be considered as cash in hand in the hands of assessee for being entered in the cash book.
Date Cheque no. Payee Amount (Rs) 27.3.11 0522334 Salil Aggarwal 250000 22.3.11 0019044 Vikas Chanana 70000 16.3.11 0522326 Salil Aggarwal 100000 11.2.11 0831795 Salil Aggarwal 100000 11.11.10 0019092 Deepak 75000 11.11.10 0019085 Kishan Lal 30000 13.10.10 0019071 Mahender Kumar 7255 15.9.10 0019048 Deepakji 100000 12.9.10 0019047 Rajender 20000 23.7.10 0019029 Sanjay Kumar 20500 23.7.10 Tanmeet 28900 14.7.10 0019024 Afjal 75000 8.7.10 0019017 Rajivji 350000 8.7.10 0019021 Rakesh 20000 3.7.10 0019013 Sehgal 45000 2.7.10 0019009 Deepak 140000 16.5.10 0968300 Sahil Agggarwal 50000 6.4.10 0968272 Mohd Afjal 145000 3.4.10 0968273 Omji 105000 8.4.10 0968279 Rajiv Gupta 650000 10.4.10 0968280 Kewal Kishoreji 80000 11.4.10 0968282 Salil Aggarwal 200000 23.4.10 0968289 Yash Arora 35000 21.4.10 0968286 Tomil 10000 Savings bank Account-Corporation Bank 23.5.10 0852641 Salil Aggarwal 50000 17.7.10 0852669 Kishan Lal 25000 16.9.10 0852621 Gurmol Singh 15000 11.11.10 0852687 Gopalji 30000 6.3.11 0857581 Salil Aggarwal 350000 8.3.11 0867641 Kewal Krishan 175000 16.3.11 0857642 Rajesh Mittal 56700 Total 34,08,355 2.1. AO took into consideration only such cash withdrawals which were shown against self cheques. He, accordingly, made addition of Rs. 34,08,355/-. Ld. CIT(A) dismissed the assessee’s appeal. Aggrieved, the assessee is in appeal before the Tribunal and has raised following grounds of appeal:
“1. The action of the learned CIT(A) in upholding the addition of Rs. 34,08,355/- levied by A.O as unexplained additions to cash in hand is unjust, illegal, arbitrary, illusory and the disallowance may kindly be quashed.
2. That the action of the CIT(A) in giving a finding that the assessee has not filed any explanation or established the identity of the person and the purpose of withdrawal of cash and thus retaining an addition of Rs. 34,08,355/- is unjust, illegal, arbitrary, illusory.
Appellant craves leave to add, alter, delete or modify and grounds of appeal upto the date of hearing of the appeal. 3. Ld. counsel for the assessee submitted that assessee had five projects in hand of CPWD and its gross receipts were Rs. 1.38 crores. Accounts were duly audited as per section 44AB. He referred to page 68 of PB wherein written submissions filed before ld. CIT(A) are contained, in which it is, inter alia, pointed out that excluding two persons, viz. Salil Aggarwal (son of assessee) and Rajiv Ji (assessee himself), there were only 18 other persons. Out of these only 8 persons had withdrawn cash over Rs. 50,000/- on behalf of assessee. The others had withdrawn small amounts and that also only once or at the most twice during the entire year. The assessee further submitted that all the 8 persons who had withdrawn cash on behalf of the assessee were working on sites of the assessee. In the written submissions, the assessee had given details of these persons along with the sites where they were working. Ld. counsel further referred to page 88 of the PB, wherein bank statement of saving bank account is contained and pointed out that the deposits can be linked to the cash available from cash book. He submitted that AO had not commented on expenditure.
Ld. DR relied on the orders of tax authorities below.
I have considered the submissions of both the parties and have perused the material available on record. The main plank of assessee’s explanation was that it had withdrawn money primarily from its OD account and also from savings bank account and deposited the cash in its cash book.
This cash in hand as per cash book was utilized to deposit cash in saving bank a/c. If the AO’s contention is to be accepted then it implies that all the cheques, on which name or bearer was written, were to be allowed as expenditure, since the same were towards expenses. Under such circumstances, the assessee would have claimed these expenses and not deposited the cash in its saving bank account. Once the assessee has taken the withdrawals in its cash book and the amount is shown as being deposited out of this cash in hand in the saving bank account, then, unless there is any evidence to negate the assessee’s explanation, no fault can be found with the same. I, therefore, restore the matter to the file of AO to verify whether all deposits in saving bank account are from cash book or not. He should also examine if assessee has claimed the impugned cheques as expenditure or not. If expenditure has been claimed against any of the impugned cheque then addition to that extent is to be sustained. However, if no discrepancy is found in this exercise then no addition is called for.
In the result, appeal is allowed for statistical purposes. Order pronounced in open court on 23-08-2016.