MANHARLAL KESHAVLAL BHIMJIYANI,JETPUR vs. ITO, WARD-1(2)(3), RAJKOT, RAJKOT

Page 2 of 7 Such cash withdrawal was from fixed deposit with State Bank of India. The cash was withdrawn for some religious activity (Saptah) for entire family at Haridwar. But due to family dispute, the same was cancelled and cash of Rs.31,00,000/- was redeposited in State Bank of India, besides, the part cash deposit was out of past savings and receipts from the trading activity of the assessee, as the assessee is small trader engaged in the business of recharge of Mobiles. However, the assessing officer rejected the above contention of the assessee and made addition to the tune of Rs.31,00,000/-, in the hands of the assessee, u/s.69A r.w.s.115BBE of the Act.

Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the CIT(A), who has confirmed the action of the assessing officer. The ld.CIT(A) observed that there is no documentary evidence of any religious activity stated to be performed by the assessee, and assessee has not filed sufficient evidence to prove his claim therefore, assessing officer was justified in making the addition of Rs.31,00,000/-.

Aggrieved by the order of the Ld.CIT(A), the assessee is in further appeal before this Tribunal.

Shri Mehul Ranpura, Learned Counsel for the assessee, vehemently argued that assessee has deposited cash in the bank account out of the earlier cash withdrawal and for that purpose assessee submitted an affidavit which is placed at page No.7 of the paper book and a part amount was deposited out of past savings and out of assessee’s, trading activities. Hence, the addition should not have been made in the hands of the assessee, as the assessee, has explained the sources of the cash deposit in the bank account.

On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity.

I have carefully considered the facts of the case, the submission of the Learned Counsel for the assessee and ld DR for the Revenue and evidences on record. I note that assessee used to remit available cash in fixed deposits and portion there of aggregating Rs. 40,00,000/- in the immediately preceding year from his current account with State Bank of India, as evident from body of assessment order.The very purpose of cash withdrawals in the immediately preceding year was intended to perform "Saptah" in Haridwar, which could not be materialized due to compelling family circumstances as deposed in sworn-in- affidavit. In the circumstances, the assessee re-deposited cash of Rs. 31,00,000/- out of cash withdrawals made in the immediately preceding year in current account with State Bank India and very fact is depicted in body of assessment order. I note that assessing officer did not dispute cash withdrawals of Rs. 40,00,000/- from the current account with State Bank of India and there was no material or circumstantial evidence to suggest utilization of such withdrawals elsewhere. I also find that there was direct and proximate nexus of withdrawals in the immediately preceding year for specific religious purpose and corresponding re-deposit in bank account, as deposed in sworn-in-affidavit. I also note that a part amount was deposited by the assessee in the bank account out of past savings and out of his small trading business. There exist no material or circumstantial evidences to suggest that the assessee was having income from undisclosed sources and cash deposits were flown from such undisclosed source of income. The least that was expected from the quasi-judicial authority was to consider the documents in objective manner. The assessing officer is not authorized to draw inference by Page 4 of 7 misreading vital evidences to accommodate alleged finding on fallacious assumption on surmises.

However, I also find that some of the documents and evidences are self- servicing, documents and evidences on which reliance cannot be placed, such as affidavit, past savings etc, therefore, to protect the interest of the revenue, an ad- hoc, estimated addition should be made in the hands of the assessee. Therefore, I find some merit in the contention of the ld. Counsel for the assessee. Hence, I find that while the case of the assessee merits some relief, at the same time entire relief cannot be permitted to the assessee. In my view, the ends of justice would be met, if a net profit rate of @ 10% of Rs. 31,00,000/-, which comes to Rs.3,10,000/-, is adopted, since the same would take care of the inconsistencies, in the various documents and evidences submitted before the lower authorities. Therefore, in order to plug the leakage of revenue, I direct the assessing officer to make addition of Rs.3,10,000, by applying the normal rate of income tax (not under section 115BBE of the Act). It is also made clear that this adjudication has been done considering the peculiar facts and circumstances of the assessee, therefore, the instant adjudication shall not be treated as a precedent in any preceding or succeeding assessment year.

In the result, appeal filed by the assessee is partly allowed, in above terms.