SMT. PRATIBHA LALWANI,BHOPAL vs. CIT(A)-1, BHOPAL

PDF · subscribers
ITA 813/IND/2019Status: DisposedITAT Indore20 July 2022AY 2014-157 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO and CIT(A) failed to consider all three bank accounts of the assessee and selectively focused on smaller withdrawals. The Tribunal found that the total cash withdrawals were substantially more than the deposits, and the time gap was acceptable, thus explaining the source of the deposits.

What were the facts?

The assessee deposited Rs. 11,20,000/- in cash into her bank accounts. She claimed these deposits were re-deposits of earlier cash withdrawals from her various bank accounts. The Assessing Officer (AO) treated Rs. 10,00,000/- as unexplained and made an addition.

What were the issues?

Whether the cash deposits in bank accounts were adequately explained by prior cash withdrawals from multiple bank accounts, and whether the lower authorities erred in not considering all bank statements.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: MS. MADHUMITA ROY & SHRI B.M. BIYANI

For Appellant: Shri Gagan Tiwari, AR
For Respondent: Shri Aditya Shukla, Sr. DR
Hearing: 04.07.2022Pronounced: 20.07.2022

आदेश / O R D E R

Per B.M. Biyani, A.M.:

1.

This appeal filed by the assessee is directed against the order dated 04.04.2019 of learned Commissioner of Income-Tax (Appeals)-1, Bhopal [“Ld. CIT(A)”] in Appeal No. CIT(A)-1/BPL/IT-906/16-17, which in turn arises out of the order of assessment dated 30.12.2016 passed by the learned ITO, Ward-1(1), Bhopal [“Ld. AO”] u/s 143(3) of the Income-tax Act, 1961 [“the Act”] for the Assessment-Year 2014-15.

Smt. Pratibha Lalwani Assessment year 2014-15 2. The assessee is working as Dean of Sanskar Valley School, Bhopal. She filed return of income declaring a total income of Rs. 8,28,300/- consisting of salary and interest. The case was selected under CASS for scrutiny and statutory notices u/s 143(2) and 142(1) were issued from time to time and complied with by the assessee. During assessment-proceeding, the Ld. AO asked the assessee to explain the sources of cash-deposits of Rs. 11,20,000/- made in her bank accounts. The assessee submitted reply claiming that the cash-withdrawals made on different dates from the very same banks, were re-deposited in those bank accounts on different dates. However, the Ld. AO made an extract of cash-withdrawals and cash-deposits in the assessment- order and accepted contention of the assessee to the extent of Rs. 1,20,000/- only and treated the remaining cash-deposit of Rs. 10,00,000/- (Rs. 11,20,000/- minus Rs. 1,20,000/-) from unexplained sources. Accordingly, the Ld. AO made addition of Rs. 10,00,000/-. Being aggrieved, the assessee filed appeal to Ld. CIT(A).

3.

During appellate proceeding before Ld. CIT(A), the assessee made a detailed submission on the facts and law. The main contentions of assessee, as noted by Ld. CIT(A) on Page No. 3 of his order, are reproduced below:

“8) That during the Assessment Year, the assessee was maintaining Bank Accounts in Branches of ICICI, Citibank and HDFC banks. Copies of statements of all the bank accounts were submitted to the learned A.O. However, the learned A.O. erred in examining only the ICICI Bank statement, without considering the statements of HDFC and Citibank, which has resulted in the erroneous Order thereby causing grave injustice to the assessee. 9) That a consolidated date-wise Statement of the cash deposited and withdrawn from the ICICI, Citibank and HDFC Banks is annexed herewith for your perusal which amply clarifies that at any point of time, the cash withdrawals from the banks were more than the cash deposited in banks, which had been explained to the learned AO. 15) That during the year under consideration the assesssee deposited a sum of Rs. 11,20,000/- in bank accounts on various dates which was earlier withdrawn by the assessee from her bank accounts for personal usage but the assessee could not Page 2 of 7

Smt. Pratibha Lalwani Assessment year 2014-15 utilize the amount and re-deposited it in her bank accounts. Learned AO did not accept the said contention of the assessee but did not give any cogent and sufficient reason for not accepting the contention of assessee. Learned AO has not brought any material on record and does not have any evidence to the effect that a sum of Rs. 10,00,000/- was utilized by the assessee in some other manner other than the depositing the same in her savings bank account. In absence of such exercise the addition made should be deleted. The assessee wishes to reply on the following decided case laws – a) S. Jaswant Singh Cheema Vs. ITO (2012) 143 ttj 41 (Tribunal)” Thus, the crux of submissions of assessee is very pointed, viz. (i) the assessee was having three bank accounts but the Ld. AO has wrongly considered only one bank account, and (ii) cash-withdrawals made from the bank accounts were re-deposited into the bank accounts.

4.

The Ld. CIT(A), however, confirmed that addition of Rs. 10,00,000/- by observing as under:

“4.3 There is a cash deposit of Rs. 11,20,000/- into Bank account. AO has found it unexplained for its source. The AR submitted that since the appellant does not maintain any books of account, addition u/s 68 can’t be made. Also, tried to establish a link between several old withdrawals from Bank account and deposit of the same money after substantial lapse of time. The plea taken by the appellant is apparently argumentative based on facts distorted to their convenience. A mere cursory look at the bank account copy, there are numerous cash withdrawal of Rs. 5,000/-, Rs 10,000/-, Rs. 40,000/-, Rs. 90,000/- etc. between 7th June 2013 to 13th Jan 2014. Then there is cash deposit of Rs. 90,000/- on 24th Jan, Rs. 3,00,000/- (i.e. Rs. 2 lac + 1 lac) in Feb 2014 and Rs. 4,50,000/- (i.e. Rs. 50,000, Rs. 1,00,000 + Rs. 3,00,000) in the month of March. Any proposition like withdrawing earlier from this account or from any other account in smaller fragments and after substantial lapse of time depositing the same within 2 months with large chunks of cash, can only be a wild imagination and not a fact. If there have been cash withdrawal, it is the appellant’s liability to discharge that the same cash were deposited. Onus could never be placed on the A.O. to establish that the cash deposited are, if not out of the cash withdrawn, then you bring the proof wherefrom the cash came.”

Smt. Pratibha Lalwani Assessment year 2014-15 5. Before us, the Ld. AR repeated the same contentions as were urged before the Ld. CIT(A). The Ld. AR argued that the assessee was maintaining three bank accounts with ICICI Bank, Citibank and HDFC Bank and during the assessment-proceeding, although the assessee submitted bank- statements of all three bank-accounts, the Ld. AO took into account only one bank account, viz. ICICI Bank and based on the cash withdrawals and cash deposits from / into the ICICI Bank alone, concluded that the assessee was not having sufficient cash balance. Ld. AR submitted that the Ld. AO was not justified to take on record only one bank-account when the assessee has submitted bank-statement of all three bank-accounts. Ld. AR submitted that despite a categorical submission to Ld. CIT(A) about this unjustified act of Ld. AO, the Ld. CIT(A) too did not consider all three accounts judiciously and adequately. Drawing our attention to the bank-statements placed in the Paper-Book, Ld. AR submitted that the Ld. CIT(A) has conveniently cited the illustrations of smaller amounts of cash-withdrawals, viz. Rs. 5,000/-, Rs 10,000/-, Rs. 40,000/-, Rs. 90,000/- etc. between 7th June 2013 to 13th Jan 2014 to negate the submissions of assessee, whereas the assessee has made cash withdrawals of much higher amounts like Rs. 1,00,000/- on 26.04.2013, Rs. 2,00,000/- on 08.10.2013 and multiple cash-withdrawals of Rs. 90,000/-, Rs. 45,000/- on several dates. According to Ld. AR, if the lower authorities would have applied a judicious approach, they would have been satisfied with the quantum of cash-withdrawals to justify the cash-deposits. With regard to the observation of Ld. CIT(A) that there was a time-gap between cash-withdrawals and cash-deposits, Ld. AR relied upon the decision of Hon’ble Delhi High Court in Jaya Agarwal Vs. ITO, of 2005, (2018) 92 taxmann.com 108 where it was held so:

“8……..Delay of some months in re-deposit of part amount is the sole and only reason to disbelieve the appellant. Persons can behave differently even when placed in similar situations. Due regard and latitude to human conduct and behaviour has to be given and accepted when we consider validity and truthfulness of an explanation. One should not consider and reject an explanation as concocted and contrived by applying prudent man’s behavior test….” Page 4 of 7

Smt. Pratibha Lalwani Assessment year 2014-15 With these submissions, Ld. AR argued that the assessee had sufficient cash withdrawals from banks to make cash-deposit of Rs. 11,20,000/- in the bank accounts and therefore the sources of cash-deposits stood explained. Ld. AR therefore prayed to delete the addition of Rs. 10,00,000/- made by lower authorities.

6.

Per contra, Ld. DR relied upon the orders of lower authorities. Ld. DR strongly submitted that it is true that the assessee has made cash- withdrawals from banks but the fact that cash-withdrawals have been made on multiple dates and there is a time-gap between cash-withdrawals and cash-deposits, the only conclusion, without proving more, is that the cash- withdrawals must have been utilized by the assessee for some other purposes and they were not available for making cash-deposits. With this submission, Ld. DR contested that it would be wrong to accept re-deposit of cash- withdrawals. Hence Ld. DR requested to uphold the addition made by lower authorities.

7.

We have considered rival submissions of both sides and perused the material held on record. Firstly, we observe that the assessee is having three bank accounts and not one bank-account only as considered by Ld. AO. We observe that once the assessee has submitted statements of all three bank- accounts during assessment proceeding, it was the duty of Ld. AO to at least consider all those bank-accounts, whatever may be conclusions. Secondly, we observe that even the Ld. CIT(A) has also not given adequate consideration to all three bank accounts despite the fact that the assessee had made a specific submission in that respect. Thirdly, we observe that the Ld. CIT(A) has noted smaller amounts of cash-withdrawals of Rs. viz. Rs. 5,000/-, Rs 10,000/-, Rs. 40,000/-, Rs. 90,000/- etc. between 7th June 2013 to 13th Jan 2014 and ignored cash-withdrawals of high amounts such as Rs. 1,00,000/- on 26.04.2013, Rs. 2,00,000/- on 08.10.2013 and multiple cash- withdrawals of Rs. 90,000/-, Rs. 45,000/- on several dates. Fourthly, we also observe that the assessee has given a consolidated cash-flow statement of all three bank-accounts, according to which the total cash-withdrawals from all Page 5 of 7

Smt. Pratibha Lalwani Assessment year 2014-15 bank accounts was Rs. 14,91,193/- as against the total cash-deposits of Rs. 11,20,000/-. Even on date-wise analysis of cash-withdrawals and cash- deposits, we do not find any negative cash-balance. Thus, the quantum of cash-withdrawals is substantially more than the cash-deposits. Regarding time-gap in cash-withdrawals and cash-deposits, the assessee’s case is fully covered by the decision of Hon’ble Delhi High Court in Jaya Agarwal (supra). Thus, we are satisfied that the assessee has successfully explained the sources of cash-deposits of Rs. 11,20,000/- and hence the addition made by Ld. AO does not have legs to stand. Accordingly, we delete the addition of Rs. 10,00,000/- made by Ld. AO.

8.

In the result, this appeal of assessee is allowed.

Order pronounced as per Rule 34 of I.T.A.T. Rules 1963 on 20.07. 2022.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →