ROHIT JAISWAL,KOLKATA vs. DCIT, CIR-49(1), KOL, KOLKATA

This appeal at the instance of the assessee is directed against the order of Commissioner of Income-tax (Appeals) [learned CIT (A)] dated 26th April, 2023, which is arising out of the assessment order under Section 143(3) of the Income-tax Act, 1961 (the Act) dated 9th December, 2019.

Assessee has raised following grounds of appeal: -

Aggrieved, assessee preferred an appeal before the ld. CIT (A) and filed detailed submissions but ld. CIT (A) without specifically dealing with the two components of the additions, partly allowed the appeal of the assessee holding that the ld. AO erred in making the addition solely on the ground that there is an increase of 96.79% in the cash deposit and gave part relief to the assessee directing the ld. AO to assume that there was an increase of 22.29% in cash deposits as explained. The finding of the ld. CIT (A) reads as under:-

On the other hand, the ld. DR vehemently argued supporting the order of both the parties.

We have heard the rival contentions and perused the records placed before us. The addition for cash deposits during demonetization period from 9th November, 2016 to 31st December, 2016, are in dispute before us. The ld. AO has made the addition u/s 69A read with section 115BBE of the Act at ₹2,73,06,000/-. The impugned addition has been made by the ld. AO on the basis of two observations firstly, that there has been abnormal increase in cash deposits during the said period as compared to the deposit in similar period during preceding financial year and that, the assessee has utilized the cash deposited in the bank account during this period for purchases of immovable properties. Now, during demonetization period, one property was purchased for consideration of ₹5,35,63,536/- for which housing loan of ₹4 crore was taken and the remaining amount has been paid from the personal bank account of the assessee as well as his wife. Another immovable property was purchased for a consideration of ₹3 crores and for making the said purchase, assessee took loan of ₹2.09 cr. from Punjab National Bank and the remaining amount has been given from the bank account of the assessee. So far as the source of investment for purchase of property is concerned, major portion is from the bank loan and remaining amount is from the personal account of assessee and his wife to this extent the details have been filed. But the A (a) Total cash deposits in bank F.Y. 2015-16 9,49,69,041 (b) Total Cash deposit in bank from 01.04.2015 to 08.11.2015 5,30,71,400 (c) Total Cash deposit in bank from 9.11.2015 to 31.12.2015 1,38,75,500 B (a) Total cash deposit in Bank F.Y. 2016-17 12,51,58,986 (b) Total cash deposit in Bank from 1.04.2016 to 08.11.2016 6,48,99,886 (c) Total cash deposit in bank from 9.11.2016 to 31.12.2016 2,73,06,000 C 1. Percentage increase between B (a) and A (a) 31.79% 2. Percentage increase between B(b) and A(b) 22.79% 3. Percentage increase between B (c) and 4 (C) 96.79% 8. Now, before moving to analyse the cash deposits mentioned in the chart reproduced above, we will first take note of the fact that assessee is regularly maintaining its books of accounts along with quantitative details. Assessee is registered with the Value Added Tax Department (VAT). Quarterly returns and annual return under VAT have been filed. Tax audit report u/s 44AB of the Act also filed. Books of accounts have not been rejected by the ld. AO which means that the figures mentioned in the profit and loss account have been accepted. The assessee has been subjected to scrutiny proceedings for A.Ys. 2014-15 and 2015-16 and except minor additions of ₹61,561 and ₹1,64,742/-, income of the assessee has been assessed at ₹80,05,931/- and ₹75,64,210/-.

We thus, fail to find any justification in observation of the lower authorities and find that the addition made by the ld. AO is merely on surmises and conjunctures because the assessee has duly recorded the

Ground no. 1 is general in nature w2hich needs no adjudication.

In the result, the appeal of the assessee is allowed.