G. RAJASEKHAR,BANGALORE vs. ITO, BANGALORE

This is an appeal filed by the assessee against the order of the CIT (A)-5, Bengaluru, dt.10.09.2015, for the assessment year 2010-11.

Assessee, a salaried employee, filed his return declaring total income of Rs.1,47,240/- consisting of salary income of Rs.1,60,000/- before claiming deduction under Chapter VIA of the Act for this asst. Year. Based on AIR information , the AO found that the assessee made cash deposits of Rs.60,58,900/- in ICICI Bank. The assessee could not furnish details with ITA.93/Bang/2016 Page - 2 regard to sources of such cash deposits before the AO and hence the AO assessed Rs.60,58,900/- as unexplained investment u/s.69 of the Act.

On appeal, the CIT (A)-V, Bengaluru, held as under :

Aggrieved, the assessee filed this appeal before this Tribunal.

The Ld. AR submitted that the assessee has produced a confirmation letter before the lower authorities , which states that these monies were deposited by Shri. N. H. Bhaskar Reddy (PAN – ACPPN7912A) employer of the appellant and the amounts are withdrawn and used by the employer for his business purposes. The letter further states that these deposits are duly accounted in the books of the employer and the return of income is also filed by the employer. Thus , the identity of the party and credit worthiness of the party are satisfactorily explained in as much as this facts are undisputed. There is no further burden on the assessee to be discharged in this regard. As judicially settled when the identity and credit worthiness are proved no additions can be made.

Further, the Ld. AR pleaded that the alternate plea taken before the CIT (A) that the AO has failed to consider that at best only a peak credit of Rs.38,11,518/- can be considered u/s.69 of the Act and that the AO failed ITA.93/Bang/2016 Page - 5 to appreciate that Rs.60,58,900/- or even the peak credit of Rs.28,11,518/- made in financial year 2009-10 cannot be assessed in the assessment year 2010-11 as per the provisions of section 69 of the Act, and hence the addition may be deleted. Per contra, the DR relied on the order of the CIT(A).

We have considered the rival submissions, gone through the relevant orders and material . It is clear from the above that the cash credits are in the assessee’s bank account, he has not produced the required documents to prove that his employer has disclosed the impugned bank account in his return etc. As held by the CIT(A), the assessee, who has exclusive knowledge on these transactions , has not disclosed relevant facts and hence his claim stands unsubstantiated . Further, his alternate plea seeking peak of credits also makes a ground for sustaining the addition. In the facts and circumstances, the addition made is justified. It is also clear from the extracts of the deposits and withdrawals, supra, that the impugned cash deposits were made during the period relevant to this asst year and hence the addition made in this assessment year is proper. However, the closeness of the deposits and its immediate withdrawals in the above extract make a plausible ground for telescoping of the credits as pleaded by the assessee. Since the AO has not found any other unexplained credits or assets, we are of the view that the appellant’s alternate plea merits . Since the peak of credits claimed by the assessee at Rs.38,11,518/ is not apparently verified by the revenue , the AO is directed to work out the ITA.93/Bang/2016 Page - 6 correct peak of credits from the bank statements etc, afford an opportunity to the assessee and then assess it accordingly.

In the result, the appeal is allowed partly.