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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 394/JP/2023
per the table made in the written submission. The ld. AO thus made the following observation in his remand report:
Perusal of bank account statements reveals that the cash has been withdrawn around 1-2 months before re-deposit. Assessee has claimed that these amount was kept with him for business purposes and cash withdrawal was redeposited in his bank account. The assessee has himself claimed that he was engaged in the business of Job work activity of building construction so cash withdrawal amount could have been used for business purposes. The issue may kindly be decided on merits accordingly.
Therefore, the even the cash deposit made by the assessee stands explained and prayed based on the various case laws that the addition made by deleted.
The ld DR is heard who has relied on the findings of the lower authorities on both the grounds on merits raised by the assessee.
We have heard the rival contentions and perused the material placed on record. The bench noted that the so far as the ground no. 2 is concerned the ld. CIT(A) has granted the benefit of cost of Rs. 15,200 and the assessee has disputed only the difference between the actual consideration and the amount considered for payment of stamp duty. The bench also noted that the difference between the actual consideration and the amount adopted for stem duty purpose is for an amount of Rs. 1,38,334/-. We also note that the difference between the actual consideration and the amount considered for stability purpose is 6.21 %. This issue has already been considered by the coordinate bench of Bangalore ITAT in the case of Sri Sandeep Patil Vs. ITO in ITA No. 924/Bang/2019. The operative part of the finding on the issue by the coordinate bench is as under :
We also notice that the Parliament has introduced third proviso in section 50C(1) of the Act, as per which the difference in stamp duty valuation and actual consideration should be ignored, if it is less than 5%/10%. Even though the said provision has come into effect from 1.4.2019/1.4.2021, we notice that the Kolkata Bench of Tribunal has held it to be curative in nature in the case of Chandra Prakash Jhunjhunwala (supra) and accordingly held that the proviso shall apply since the date of insertion of sec.50C of the Act. Accordingly, the above said reasoning given by the Kolkata bench of ITAT also supports the contentions of the assessee.
In view of the foregoing discussions we find merit in the prayer of the assessee. We notice that the addition of Rs.15,92,800/- sustained by Ld CIT(A) works out to less than 10% of the actual consideration of Rs.2,33,00,000/- paid by the assessee. Accordingly, we modify the order passed by Ld. CIT(A) and direct the A.O. to ignore the difference between fair market value determined by CIT(A) and the actual consideration as the same is less than 10% of the actual consideration.
On this issue we note that there is a merit in the arguments of the ld. AR of the assessee and revenue could not bring to service any contra judgment we respectfully following the findings of the coordinate bench judgment considered the arguments and direct the ld. AO to delete the addition of Rs. 1,38,334/-. In terms of this observation ground no. 2 raised by the assessee is allowed.
7.1 As regards the ground no. 3 raised by the assessee for an amount of Rs. 30,70,000/- being the amount of cash deposited into the bank account of the assessee, the bench noted that the ld. CIT(A) based on the submission made by the assessee forwarded the evidences and submission of the assessee for the comments of the ld. AO. The ld. AO based on the evidence so produced observed as under :
“The assessee was asked to furnish the source of these huge cash deposits in his bank account but he did not file any documentary evidence in this regard during assessment proceedings. As per ITR assessee has shown total turnover of Rs. 51,20,635/- and declared presumptive income u/s 44AD of Rs. 4,80,000/-. Therefore, expenditure of Rs. 46,40,635/- was made by the assessee. Whereas he was made cash deposit in bank of Rs. 30,70,000/- and converted in time deposits in urban cooperative bank. The assessee was asked vide above show cause that why the income of Rs. 30,70,000/- should not added in you total income as undisclosed income but he did not file any reply/evidence in this regard. Therefore, the deposits of Rs. 30,70,000/- added to the total income of the assessee as income from other source. During the course of appellant proceedings it is noticed that the assessee has filed the additional evidence i.e. copy of various bank accounts details and cash book statement and also stated that the assessee was withdrawn the cash and after some days deposit the same. The dates of cash withdrawal supporting for cash deposit as under:-
Perusal of bank account statements reveals that cash has been withdrawn around 1-2 month before re-deposit. Assessee has claimed that this amount was kept with him for business purposes and cash withdrawn was re- deposited in his bank account. The assessee has himself claimed that he was engaged in the business of job work activity of building construction so cash withdrawal amount could have been used for business purpose. The issue may kindly be decided on merits, accordingly.”
Based on the above remand report and submission of the assessee the ld. CIT(A) has dismissed this ground of the assessee merely relying on the judgment held that availability of earlier withdrawal of cash for the subsequent deposit must be established by the appellant to the satisfaction of the AO and in the absence of such evidence, the benefit of earlier withdrawal cannot be given.
The CIT(A) further noted that there is no substantial reason to withdraw cash for expenses when the previous cash withdrawals remained unrelinquished. On this issue we note that both the lower authority did not doubt the cash withdrawal by the assessee. We also note that the lower authority also did not raise a question that if the cash reposited is considered the assessee is left with no cash for meeting the expenditure as alleged in the assessment order for claiming the presumptive income. The ld. AO or in that case the ld. CIT(A) did not dispute the availability of cash for redeposit to the assessee and there is an acceptance of the ld. AO as reproduced here in below :
Perusal of bank account statements reveals that the cash has been withdrawn around 1-2 months before re-deposit. Assessee has claimed that these amount was kept with him for business purposes and cash withdrawal was redeposited in his bank account. The assessee has himself claimed that he was engaged in the business of Job work activity of building construction so cash withdrawal amount could have been used for business purposes. The issue may kindly be decided on merits accordingly. the assessee and when the lower authority categorically admitting the sufficient amount of cash withdrawal and the ld. AO through the ld. DR did not bring anything on record that the assessee has considered this cash for their other business use. Thus in the absence of this evidence we are of the considered view that once the assessee has established the source of cash deposited into the bank account, the lower authority erred in making / confirming the addition of Rs. 30,70,000/- merely based on the premise that the assessee might have used it for other purpose but that averments are not based on any evidence against the chart of withdrawal and deposit submitted by the assessee. Based on these observations the ground no. 3 raised by the assessee is allowed.
7.2 Ground no. 4 being general in nature does not require any adjudication by us.
7.3 The ground no. 1 raised by the assessee for challenging the re-opening proceeding since we have considered the appeal of the therefore, the same is not adjudicated.
In the result, appeal of the assessee is allowed.