RAJ RISHI SHARMA,ROHTAK vs. ITO, ROHTAK

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC-1’, NEW DELHI Before Sh. N. K. Saini, Accountant Member Asstt. Year : 2010-11 Sh. Raj Rishi Sharma, Vs Income Tax Officer, H. No. 1011, Sector-3, Ward-1, Rohtak (Haryana) Rohtak (Haryana) (APPELLANT) (RESPONDENT) PAN No. ACOPS1474Q Assessee by : Sh. Naveen Gupta, Adv. Revenue by : Sh. V. R. Sonbhadra, Sr. DR Date of Hearing : 25.05.2016 Date of Pronouncement : 29.06.2016 ORDER

This is an appeal by the assessee against the order dated 12.11.2015 of ld. CIT(A)-2, Gurgaon.

SI. No. Date of deposit Amount of deposit 1. 13.04.2009 40,000 2. 14.07.2009 20,000 3. 01.08.2009 60,000 4. 29.08.2009 50,000 5. 17.09.2009 55,000 6. 29.09.2009 40,000 7. 13.10.2009 30,000 8. 08.10.2009 13,000 9. 09.10.2009 50,000 10. 24.10.2009 35,000 11. 15.01.2010 10,00,000 12. 19.01.2010 62,000 13. 22.01.2010 1,09,000 14. 11.02.2010 45,000 Total 16,09,000/- 3 Raj Rishi Sharma 4. As regards to the balance amount of Rs.6,09,000/-, the assessee explained that the cash was deposited out of the withdrawals from the bank. He furnished a cash flow statement of Smt. Sunita Sharma. The AO was not satisfied from the explanation of the assessee and made the addition of Rs.6,09,000/- to the income of the assessee. The reliance was placed on the following case laws:

� Shankar Industries VS CIT 114 ITR 689 (Calcutta) � C. Kant and Co. Vs CIT 126 ITR 63 (Calcutta) � CIT VS Korlay Trading Company Ltd. 232 ITR 820 (Calcutta) � CIT Vs Precision Fiannce Pvt. Ltd. 208 ITR 465 (Calcutta) � ITO Vs Diza Holdings (P) Ltd. 120 Taxman 539 (Kerla) 5. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted as under: “4.3 AR of the appellant filed written submission dated 14.09.2014. Relevant part of submissions is reproduced here under:- "The 2nd & 3rd ground of appeal is against addition of Rs. 6 lacs on A/c of alleged deposits in bank A/c. The bank account of the appellant is a joint A/c with his wife Smt. Sunita Sharma who is separately assessed to tax under PAN:- AUYPS4407R. Copy of computation of taxable income of the wife, obtained from the record of the Ld. AO is placed at page 1 of the paper book. The 4 Raj Rishi Sharma affidavit of wife Smt. Sunita Sharma was also filed with the Ld. AO, during the assessment proceedings, to the fact that bank account belongs to her and an affidavit of appellant was also filed. Copy of affidavit of wife Smt. Sunita Sharma is placed at page 2 of the paper book and that of the appellant is placed at page 3 of the paper book. Smt. Sunita Sharma besides her affidavit had also filed the copy of cash book from 01.04.09 to 31.03.2010 wherein the entire bank transactions are duly shown. The photocopy of the same, as obtained from the Ld. AO is placed at page 4-15 of the paper book. The affidavit is valid piece of evidence as has been held by various courts including the Hon'ble Supreme Court of India reported at 30 ITR page 181 (S.C). Sir the Ld. AO has not given any cogent reason for disbelieving the affidavits of the wife of the appellant and that of the appellant. The appellant is not doing any business and as such no books of accounts were maintained by him. In the absence of books of accounts the exact date and source of bank deposit cannot be remembered. "The Hon'ble Jurisdictional High Court in in the case of CIT Vs Munish Bhandari has held "That the assessee cannot be expected to explain each and every transaction appearing in the bank statement. Without prejudice to above, the Ld. AO has not given the benefit of withdrawals from the same bank as is clear from the bank statement placed at page 16-19 of the paper book. The Hon'ble ITAT Delhi Bench in the 5 Raj Rishi Sharma case of ACIT vs Baldev Raj Charla and Others reported at 121 TTJ 366 has held as "No addition u/s 69 could be made only because there was some time gap between withdrawal and cash deposits.” In view of above submission your good self is prayed to please allow this grounds of appeal and delete the addition of Rs. 6 lacs made by the Ld. AO."

6. The ld. CIT(A) after considering the submissions of the assessee restricted the addition to Rs.3,94,900/- by observing in paras 4.4 and 4.5 of the impugned order as under: 4.4 I have carefully considered the appellant's submissions. It is evident from the facts on record that there have been number of cash withdrawals and cash deposits from the same bank account i.e. Axis Bank. Keeping in view the facts and circumstance of the case, it is evident that the appellant has not filed any cogent evidence in order to establish that the transactions in the bank account relate to the appellant's wife Smt. Sunita Sharma. The appellant's explanation with regard to the opening balance of Rs.1,54,900/- in the hands of Smt. Sunita Sharma from which the cash deposits were claimed to have been made is also without any justification and evidence. In these circumstances the appellant's explanation with regard to the opening balance of Rs.1,54,900/- is rejected. Further, as mentioned by the A.O in the order, no explanation has been furnished with regard to cash deposit of Rs. 40,000/- on 03.04.2009. As regards remaining cash deposits the A.O has rejected the submission of the appellant on the ground that there was no justification to withdraw cash if appellant already had cash in hand.

6 Raj Rishi Sharma I do not agree with these views of the A.O. It is a fact on record that the appellant had withdrawn cash from the same bank account in which the cash was deposited. There is no evidence on record that the said cash had been used by the appellant for any investment. Assuming that past of the cash withdrawals were used for the expenditure incurred on household expenses, the credit for the remaining cash withdrawn from the bank needs to be allowed to the appellant. In the given facts and circumstances of the case, I estimate the household expenses at Rs, 2,00,000/- and accordingly hold that the balance cash was available with the appellant from which he could have made cash deposits. The total addition is accordingly recomputed as under:- i) Rejection of appellant's claim of opening balance -Rs.1,54,900/- ii) Deposit on 13.04.2009 for which no explanation has been furnished -Rs.40,000/- iii) Amount used for household expenses out of cash withdrawals which has been claimed as a source for cash deposits -Rs.2,00,000/- 4.5 The total addition is accordingly is restricted to Rs. 3,94,900/-. These grounds of appeal are partly allowed.”

7. Now the assessee is in appeal. The ld. Counsel for the assessee submitted that the bank account was maintained by the assessee jointly with his wife Smt. Sunita Sharma who is also assessed to tax. However, the said bank account belonged to her and all the deposits in the bank account were either out 7 Raj Rishi Sharma of the withdrawals or deposited by Smt. Sunita Sharma. It was further submitted that copy of the cash book of Smt. Sunita Sharma running from 01.04.2009 to 31.03.2010 was furnished to AO/CIT(A) wherein all the bank transactions were duly shown in the said cash book (copy of which is placed at page nos. 10 to 19 of the assessee’s paper book). It was further submitted that the CIT(A) wrongly added the opening balance of cash in hand amounting to Rs.1,54,900/- which was brought forward from earlier years and not related to the year under consideration. It was accordingly submitted that the addition sustained by the ld. CIT(A) was not justified.

8. In his rival submissions the ld. DR strongly supported the orders of the authorities below and further submitted that in the joint bank account, first name was of the assessee, therefore, it is to be presumed that the joint bank account belonged to the assessee and the addition was rightly made in his hands for unexplained deposits.

9. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that out of the addition of Rs.3,94,900/- sustained by the ld. CIT(A) a sum of Rs.1,54,900/- was the opening cash balance which was brought 8 Raj Rishi Sharma forward by Smt. Sunita Sharma in her cash book, so, the said amount was not pertaining to the year under consideration and cannot be added. The another addition of Rs.40,000/- was sustained for the deposits on 03.04.2009. However, on the perusal of the bank account (copy of which is placed at page nos. 4 to 7 of the assessee’s paper book), it is noticed that there was no such deposits on 03.04.2009. However, there was cash deposit of Rs.40,000/- on 13.04.2009. It, therefore, appears that the date was wrongly mentioned by the ld. CIT(A) in the impugned order because the observations of the AO in the assessment order was that a sum of Rs.40,000/- was deposited on 13.04.2009 for which no source of deposit was shown in cash flow statement and in the copy of the cash book also which is placed at page no. 10 of the assessee’s paper book. In My opinion, if no such entry had been shown, the addition to that extent deserves to be sustained. Accordingly, addition of Rs.40,000/- is sustained. The another addition of Rs.2,00,000/- was sustained by the ld. CIT(A) on account of house hold expenses out of the cash withdrawals. In my opinion, the said addition was not sustainable, particular when nothing was brought on record to substantiate that out of the withdrawals an amount to the extent of Rs.2,00,000/- were 9 Raj Rishi Sharma used by the wife of the assessee for incurring house hold expenses.

10. In view of the above discussion the addition to the extent of Rs.40,000/- is sustained and the remaining addition of Rs.3,54,900/- is deleted.