MAHENDRA N RAJU,MUMBAI vs. DCIT 25(3), MUMBAI

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ITA 5466/MUM/2014Status: DisposedITAT Mumbai28 March 2017AY 2010-113 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessee should be given further credit for cash withdrawals from an OD account (Rs. 1,85,000/-) and the opening cash balance (Rs. 92,653/-) as these were available for deposits. The claim for credit of amounts assessed in the preceding year was rejected.

What were the facts?

The assessee made cash deposits totaling Rs. 46,26,000/- into bank accounts. The Assessing Officer treated this as income under Section 69. The CIT(A) confirmed an addition of Rs. 17,79,826/- after granting some relief.

What were the issues?

Whether cash deposits into bank accounts can be treated as income under Section 69, and whether the assessee is entitled to credit for available cash balances and withdrawals.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” Bench, Mumbai

Before: Shri B.R. Baskaran (AM)& Shri Ravish Sood (JM)

For Appellant: Shri Ajay R. Singh
Hearing: 23.3.2017Pronounced: 23.3.2017

The appeal filed by the assessee is directed against the order dated 12.5.2014 and 28.7.2014 passed by the learned CIT(A)-35, Mumbai and it relates to A.Y. 2010-11. The assessee is aggrieved by the decision of the learned CIT(A) in confirming the addition made by the Assessing Officer u/s. 69 of the Act to the extent of ` 17,79,826/-.

2.

We have heard the parties and perused the record. The assessee is an individual and proprietor of three concerns namely M/s. Global World, M/s. Saibaba Construction and M/s. S.B. Enterprises. The assessee is engaged in the business of undertaking construction works. The Assessing Officer noticed that the assessee has made cash deposits into three bank accounts maintained with ICICI Bank Ltd., Bank of Baroda and Syndicate Bank. The aggregate amount of deposits made into these bank accounts during the year under consideration was ` 46,26,000/-. The assessee explained that the cash

2 Shri Mahendra N. Raju withdrawals made from these bank accounts and also from ICICI OD account have been utilised for making these deposits. He also explained that the opening cash balance of ` 92,653/- was also used for making these deposits. The Assessing Officer did not accept the explanations of the assessee and accordingly assessed ` 46,26,000/- as income of the assessee u/s. 69 of the Act. The learned CIT(A) granted relief in respect of the withdrawals made from ICICI Bank Ltd., Bank of Baroda and Syndicate Bank and accordingly, confirmed the addition to the extent of ` 17,79,826/-. Still aggrieved, the assessee has filed this appeal before us.

3.

Learned counsel appearing for the assessee submitted that the assessee has also withdrawn cash from ICICI OD account to the tune of ` 1,85,000/- and further the assessee was possessing opening cash balance of ` 92,659/-. He submitted that the learned CIT(A) has omitted to give credit for these amounts. Learned AR further submitted that the Assessing Officer made identical addition in the immediately preceding year also, but the learned CIT(A) has restricted the addition to the extent of peak credit balance. Learned AR submitted that the assessee may be given credit for the amount assessed in the immediately preceding year also.

4.

On the contrary, learned Departmental Representative submitted that the learned CIT(A) was fair enough to give credit for the cash withdrawals made from the bank accounts of the assessee, since the assessee has withdrawn smaller amounts and they could not have been re-deposited into the bank accounts. Accordingly, she opposed for giving further relief to the assessee.

5.

Having heard the rival contentions, we are of the view that the assessee may be given further relief to the extent of cash withdrawals of ` 1,85,000/- made from ICICI OD account and also opening cash balance of ` 92,653/-, since both the cash balances were available with the assessee and could have been used by him to make the deposits. Accordingly, we modify the order

3 Shri Mahendra N. Raju passed by the learned CIT(A) and direct the Assessing Officer to grant further credit of ` 1,85,000/- and ` 92,653/- referred above. With regard to the claim of the assessee that the amount assessed in the preceding year should be given credit, we do not find merit with the same as the assessee has shown cash balance of Rs.92,653/- only as at the end of the preceding year, i.e., he has not brought any material to show that the amount assessed in the preceding year was available with the assessee. Accordingly we reject the said claim of the assessee.

6.

In the result, appeal filed by the assessee is treated as partly allowed. Order has been pronounced in the Court on 23.3.2017.

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