INCOME TAX OFFICER, YAVATMAL vs. SANJAY BANSILAL JAISWAL, YAVATMAL

The present appeal has been filed by the Revenue challenging the impugned order dated 26/07/2023, passed by the learned Commissioner of Income Tax (Appeals), Delhi, [“learned CIT(A)”], for the assessment year 2018-19.

“(1) Whether on facts and circumstances of the case, the Id. CIT(A) was justified in deleting addition of Rs 8,59,21,510/- by concluding that cash deposits of Rs 8.5921,510/- in the bank account do not pertain to the assessee as the bank account pertains to M/s Ramshazan Trading Coain which assessee is the partner without ascertaining as to whether each of the cash

Sanjay Bansilal Jaiswal ITA no.324/Nag./2023 deposit in the bank account hisobech owned up by M/s Ramsharan Trading Co in its books of accounts? (2) Whether on facts and circumstances of the case, the Id. CIT(A) was justified in deleting addition of Rs 8,59,21,510/- by relying upon the remand report of the AO and submission of the Bank that the PAN of the assessee was wrongly mapped with the bank account, when, the remand report merely relied upon the fact that such bank account was included in audited books of accounts of M/s Ramsharan Trading Co. without conclusively ascertaining the source of such cash as belonging to M/s Ramsharan Trading Co.? (3) Whether on facts and circumstances of the case, the Id. CIT(A) was justified in deleting addition of Rs 8,59,21,510/- by concluding that cash deposits of Rs 8,59,21,510/- in the bank account do not pertain to the assessee as the bank account pertains to M/s Ramsharan Trading Co. in which assessec is the partner without any conclusive evidence in his possession that all the cash deposits in the bank account pertained to M/s Ramsharan Trading Co. and not to the assessee?

Sanjay Bansilal Jaiswal ITA no.324/Nag./2023 cash in his bank accounts, the cash deposits are related to his partnership firm M/s Ramsharan Trading Co having PAN No. AAHFM7660F with Current Account No. 1021001310 in Yavatmal Urban Co.op. Bank Ltd. The AO to verify the contention of the assessee, details i.e. bank statement for F.Y. 2017-18 in excel format or .csv format along with account opening form and KYC documents linked with the account No.1021001310 were called for from the Yavatmal Urban Co.Op. Bank Ltd. by issuing notice u/s 133(6) of the Act on 21/12/2020. however, the bank did not respond to this notice and to the reminder sent thereafter. Therefore, vide notice u/s. 142(1) dt. 6.2.2021 issued by the AO, the assessee was asked to substantiate his claim along with supporting evidence, copy of bank statement with KYC documents and copy of account opening form submitted before the bank. However, the assessee failed to furnish the same. Under the circumstances, cash deposited by the assessee amounting to Rs.8,59,21,510/- in the current account held with Yavatmal Urban Co.op. Bank Ltd. remained unexplained. Therefore, a show- cause notice along with draft assessment order proposing to add Rs.8,59,21,510/- as unexplained cash credits to the total income of the assessee was issued by the AO on 22.2.2021. The assessee was required to furnish his reply on or before 01/03/2021, but he failed to submit the same. One more opportunity by fixing date of response on 08.03.2021 was given to the assessee by the AO vide notice dt. 02.03.2021. However, the assessee again failed to furnish his reply.

The Assessing Officer also noted that the assessee has deposited cash 4. of Rs.8,59,21,510/- in the current A/c. No. 1021001310 held with Yavatmal

Sanjay Bansilal Jaiswal ITA no.324/Nag./2023 Urban Co.Op. Bank Ltd. and failed to furnish the nature and source of the same during the course of assessment proceedings. Moreover, the assessee did not furnish any reply in response to show-cause notice which prove that the assessee did want to say anything in respect of proposed addition of Rs.8,59,21,510/-. In these circumstances, nature and source of cash deposited by assessee of Rs.8,59,21,510/- in his bank account remained unexplained. This cash deposit has also not been recorded by the assessee in his books of accounts. Thus the Assessing Officer added ` 8,59,21,510, to the total income of the assessee under section 69A of the Act.

“10. Now coming back to instant appeal, the submission states that in response to notice we have submitted the details required/ desired. The Branch Manager in the certificate has acknowledged the mistake on the part of the bank that they erroneously mapped the PAN of the partner with the current account instead of Firm's PAN account. The fallout of this was that case of firm was not considered for scrutiny and instead the partner's case got selected in CASS in the instant appeal due to bank's negligence. The appellant has also attached copy of ITR for A.Y. 2018- 19 in respect of the firm showing gross total income at Rs. 19,04,094/- filed on 26.09.2018.

11. In the case of Ajit Bapu Satam vs. DCIT, (ITAT-Mumbai) 147 taxmann.com 222 (2023) - cash deposited in bank account of a firm assessee was one of the partners since firm was a separate assessable entity AO was not justified in treating cash deposit as unexplained money of assessee partner u/s 69A.

Sanjay Bansilal Jaiswal ITA no.324/Nag./2023

Being aggrieved, the Revenue is in appeal before the Tribunal.

Sanjay Bansilal Jaiswal ITA no.324/Nag./2023

5. The bank statement of the relevant account was examined and it was revealed that there was a total cash deposit of ` 8,59,21,510. The Profit & Loss A/c of Ramsharan Trading Co., where the assessee is a partner, reveals a turnover of ` 8,89,75,297. Thus, it is manifest that the entire cash deposit is subsumed within the quantum of turnover as disclosed. In the return of income submitted before us, in the details of Bank account, the impugned bank account was clearly mentioned. Further, the same bank account was also referred to be the same Bank account in which the income tax refund shall be credited. It appears that this is the only bank account of the firm. We have also gainfully examined the order under section 147 of the Act for the assessment year 2017-18 dated 28/03/2022, passed by the National Faceless Appeal Centre holding that the same Bank account does not belong to the assessee. In this year also, under the similar facts and circumstances, it was alleged that there was cash deposit of ` 12,90,55,760, in the said current account. However, no addition was made and the submissions of the assessee were found to be acceptable. The assessee is also covered by the remand report dated 12/05/2023, wherein it is specifically noted the partnership firm is mentioning the impugned current account and the closing balance as on 31/03/2018, was also reflecting in the Balance Sheet. The remand report is reproduced as under:-

"Kindly refer to the above subject. 2. As directed, I am submitting herewith the remand report after taking into account the material available on record of this office and submission of the assessee during the appellate proceedings. The facts of the case are as under:- 3. Regarding addition made of Rs.8.59.21.510/-: The assessee filed return of income declaring total income of Rs. 9.68.210/-, Case of the assessee was Page | 6

Sanjay Bansilal Jaiswal ITA no.324/Nag./2023 selected for limited scrutiny for the reasons, "Large cash deposits in bank account(s) During the assessment proceedings, assessee submitted that the cash deposited pertains to the partnership firm M/s Ramsharan Trading Co. having PAN AAHFM7660F in which assessee is a partner Assessee was asked to produce the documentary proof ie, copy of bank statement with KYC details, and copy of account opening form submitted to the bank. However, assessee did not respond to the notices, reminder and showcause notice issued by the FAO. Under the circumstances, FAO has held the cash deposited of Rs.8.59,21,510/- as unexplained cash credits and added to the total income and passed the assessment order on 10.03.2021 raising demand of Rs.9,16,52,030/-.

“(1) Whether on facts and circumstances of the case, the Id. CIT(A) was justified in deleting addition of Rs 8,59,21,510/- by concluding that cash deposits of Rs 8.5921,510/- in the bank account do not pertain to the assessee as the bank account pertains to M/s Ramshazan Trading Coain which assessee is the partner without ascertaining as to whether each of the cash deposit in the bank account hisobech owned up by M/s Ramsharan Trading Co in its books of accounts? Page | 7

Sanjay Bansilal Jaiswal ITA no.324/Nag./2023

(2) Whether on facts and circumstances of the case, the Id. CIT(A) was justified in deleting addition of Rs 8,59,21,510/- by relying upon the remand report of the AO and submission of the Bank that the PAN of the assessee was wrongly mapped with the bank account, when, the remand report merely relied upon the fact that such bank account was included in audited books of accounts of M/s Ramsharan Trading Co. without conclusively ascertaining the source of such cash as belonging to M/s Ramsharan Trading Co.? (3) Whether on facts and circumstances of the case, the Id. CIT(A) was justified in deleting addition of Rs 8,59,21,510/- by concluding that cash deposits of Rs 8,59,21,510/- in the bank account do not pertain to the assessee as the bank account pertains to M/s Ramsharan Trading Co. in which assessec is the partner without any conclusive evidence in his possession that all the cash deposits in the bank account pertained to M/s Ramsharan Trading Co. and not to the assessee? 10. Upon perusal of the above, it is difficult to discern as to what is the infirmity in the order of the learned CIT(A) which is vehemently being articulated by the learned Counsel for the assessee. He could not effectively rebut any evidence to dismantle the voluminous evidences in favour of the appellant except making a general statement that the matter requires verification in the hands of the partnership firm. He has failed to controvert the clinching evidence by way of the remand report reproduced above. Presently, we are dealing with the case of the partner and we are not compelled to give any direction as regards the taxability of the firm. Accordingly, we find no merit to interfere in the well-reasoned and cogent order passed by the learned CIT(A) and uphold the same by dismissing the grounds of appeal raised by the Revenue.