VENKATACHALAM BASKARAN,MADURAI vs. DCIT,NON CORPORATE CIRCLE, MADURAI

Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order passed by learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] on 30-10-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 11-12-2019. The sole grievance of the assessee is confirmation of addition of Rs.20 Lacs on account of cash deposit in bank accounts.

The Ld. AR advanced arguments by taking support of cash flow statement whereas Ld. Sr. DR opposed any interference in the impugned order. Having heard rival submissions, the appeal is disposed- off as under.

It transpired that the assessee made cash deposits of Rs.26.06 Lacs in various bank accounts which are tabulated in para-8 of assessment order. On the basis of assessee’s submissions and after considering material on record, Ld. AO drew assessee’s cash flow as under: - Admitted rental receipts and admitted salary income 18,58,614 OB as on 01.04.2016 in the 3 bank accounts as furnished by the 21,974 assessee Total liquid cash resources available (A) 18,80,588 Fund deployment during the period from 01.04.2016 to 31.03.2017 1. Cash remittance in bank accounts 26,06,700 2. Repayment of Canara Bank housing loan 3,94,690 3. Total amount paid as claimed for deduction u/s.80C 3,70,820 4. House tax payments as claimed 67,621 5. Annual household expenses estimated at 40,000 pm 4,80,000 TOTAL CASH OUTLAY (B) 39,19,831 Excess of expenditure over resources available (B-A) 20,39,243 Rounded off to Rs. 20,00,000 Accordingly, the Ld.AO made addition of Rs.20.00 Lacs which would be taxed u/s.115BBE of the Act. 4. During appellate proceedings, the assessee worked out cash flows by taking peak credit and revised cash outlay to Rs.22.79 Lacs as against Rs.39.19 Lacs as computed by Ld. AO and arrived at cash deficit of Rs.3.98 Lacs as tabulated on page nos. 4 & 5 of the order. However, Ld. CIT(A) confirmed impugned addition against which the assessee is in further appeal before us.

The Ld. AR has placed on record cash flow working by taking cash deposits and cash withdrawals for the whole year. The working read as under: - No Particulars Sources Deployment available of cash 1. Opening cash balance 7,80,439 2. Admitted gross rental receipts & 18,58,614 salary 3 Opening balance in bank accounts 21,974 4 Cash withdrawals during FY 2016- 39,54,200 17 5 Cash deposits during FY 2016-17 51,19,400 6 Repayment of Canara Bank 3,94,690 housing loan 7 Life Insurance Policy Payments 1,65,846 8 House tax payments 67,621 9 Annual household expenses 4,80,000 estimated @ Rs.40,000 per month Total 62,27,557 66,15,227 Excess cash available with 3,87,670 appellant The Ld. AR thus submitted that there was no cash deficit. After going through the working, we are of the opinion that it would be correct to draw cash flow for whole of the year instead of taking part of cash withdrawals and deposits. Therefore, we accept the working of Ld. AR except for opening cash balance of Rs.7,80,439/- and accordingly, restrict the impugned addition to that extent. No other ground has been urged in the appeal.

The appeal stand partly allowed in terms of our above order. Order pronounced in open court on 12th March, 2024. (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) उपा34 / VICE PRESIDENT लेखा सद6 / ACCOUNTANT MEMBER चे8ई Chennai; िदनांक Dated : 12-03-2024 DS आदेश की Eितिलिप अ&ेिषत/Copy of the Order forwarded to : 1. अपीलाथ"/Appellant 2. " थ"/Respondent 3. आयकरआयु@/CIT 4. िवभागीय"ितिनिध/DR 5. गाडEफाईल/GF