KISHAN SINGH,JAIPUR vs. ACIT CENTRAL CIRCLE-4, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 83/JP/2023 fu/kZkj.k o"kZ@Assessment Years : 2013-14 cuke Sh. Kishan Singh ACIT 13, Jai Kisan Colony, Tonk Vs. Central Circle-02, Jaipur Phatak, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGWPS 6004 N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Ashish Khandelwal jktLo dh vksj ls@ Revenue by : Shri Ajay Malik (CIT) a lquokbZ dh rkjh[k@ Date of Hearing : 12/07/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 28/07/2023 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by the assessee aggrieved from the order of the Commissioner of Income Tax (Appeals)-4, Jaipur [ Here in after referred as Ld. CIT(A) ] for the assessment year 2013-14 dated 05.01.2023, which in turn arises from the order passed by the ACIT, Central Circle-04, Jaipur passed under Section 143(3) r.w.s 153A of the Income tax Act, 1961 (in short 'the Act') dated 31.12.2019.

2 ITA No. 83/JP/2023 Kishan Singh vs ACIT

grounds:-

“1. That both the lower authorities have erred in law as well in facts of the case in making/ confirming addition of Rs.451000/- by considering genuine & explained cash deposit to be unexplained.

seizure action u/s 132 of the Income Tax Act, 1961 (“the Act”)

and/or survey action u/s 133A of the Act was carried out by the

Income Tax Department on the members of Chandra Mohan Bhati

and Kishan Singh Group, Jaipur on 23.08.2017 of which the

assessee is one of the members. During the above referred

action(s), cash, jewellery, valuables, stock-in-trade, documents,

books of account and/or loose papers were found and/or seized

from the premises of the members of the Chandra Mohan Bhati

and Kishan Singh Group, Jaipur of which one such member

happens to be the assessee. The Jurisdiction over the case was

assigned to Central Circle-04, Jaipur vide order u/s 127 of the

3 ITA No. 83/JP/2023 Kishan Singh vs ACIT

Income-tax Act, 1961 by the PCIT(C)/DCIT(Hq)/C-243/Misc./2019-

20/1183 dated 06.08.2019. The assessee is employed in Jaipur

Municipal Corporation and has shown income from salary along

with income from house property and other sources. In this case,

original return of income was filed on 29/07/2013 for the A.Y 2013-

14 declaring total income at Rs.3,92,270/-. In the assessment

proceeding the ld. AO noted that the assessee has deposited Rs.

3,08,000 in his SBI A/C No. 64055151633, SBI SMS Highway and

Rs. 1,43,000/- in his BOB A/C No. 31470100000300, therefore, it is

seen that the assessee has deposited total amount of Rs.

4,51,000/- in his bank accounts. It is proposed to make an addition

of the said deposits, as these deposits remain unexplained.

Therefore, an addition of Rs. 4,51,000/- is being made to the

income of the assessee as undisclosed income.

preferred an appeal before the ld. CIT(A)/NFAC. A propose to the

grounds so raised the relevant finding of the ld. CIT(A)/NFAC is

reiterated here in below:

“5.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the

4 ITA No. 83/JP/2023 Kishan Singh vs ACIT

assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- (i) The submissions of the appellant are very vague and do not explain with evidence as to how the inferences drawn by the AO is incorrect. Merely submitting the cash book does not explain the source of cash deposits into the Bank Account. As regards the appellants contention that the seized document is itself evidence that Rs.35 lakh was realized in tranches from Shri Chandra Mohan Bhatti during the FY 2012-13, the order of the AO does not record any such finding. The appellant has failed to substantiate his submissions with supporting evidences In view thereof, I do not find any reason to differ with the addition made by the AO and addition made by the AO amounting to Rs. 4,51.000/ on account of unexplained cash deposit in the two Bank Accounts is upheld. 6. The last Ground of Appeal is that the appellant craves right to add, alter or 6.1 The appellant has not added or altered any of the above mentioned grounds of appeal. Accordingly such mention by the appellant in its ground is treated as general in nature, not needing any specific adjudication and is accordingly treated as disposed off. 7. In the result, the appeal of the appellant is partly allowed.”

their written submission to support the grounds so raised and the

same is extracted here in below;

“The appellant is salaried employee and regularly filing his returns of Income. During the relevant year, original return of Income was filed on 29.07.2013 declaring total Income of Rs. 392270/-. Subsequently, search & seizure action u/s 132 of the Income Tax Act was carried out by the Income tax Department on 23.07.2017 on the appellant and his friend Shri Chandra Mohan Bhati (herein after referred to as Mr. Bhati for sake of brevity). During the course of search, various documents were found and/or seized by the Income Tax Department from the residential house of the appellant.

5 ITA No. 83/JP/2023 Kishan Singh vs ACIT

Further , the notice u/s 153A of the Income Tax Act was issued by the department requiring the appellant to furnish return of Income and in compliance of Same , the return of Income was furnished by the assessee declaring Income to the tune of Rs.452550/- 04.11.2019 .(Kindly refer Pg 8-12) During the course of assessment proceedings , the appellant elaborately explained each & every entry contained in documents seized by the department . However ,the AO was not satisfied with regards to the source of Rs. 43 Lakhs paid to Mr. Bhati and therefore on this count , the ld AO made addition of Rs. 24.49 /- lakhs by considering same to be unexplained Investment . Besides that ,AO added cash deposit made into bank account totaling Rs. 451000/- to be unexplained Income .Thus , in total addition of Rs. 29,00,000/- was made, aggrieved by the same ,the appellant filed appeal before Appellate Commissioner . Subsequently , the ld CIT(A)-4 , Jaipur vide appellate order dated 05.01.2023, deleted addition of Rs. 24.49 Lakhs but sustained the addition on account of cash deposit made into bank account . Aggrieved by the same ,the appellant filed appeal before your honour. With this background, the individual grounds of appeal & brief submission of appellant is as under:-

Grounds of Appeal 1. That both the lower authorities have erred in law as well in facts of the case in making/ confirming addition of Rs.451000/- by considering genuine & explained cash deposit to be unexplained.

6 ITA No. 83/JP/2023 Kishan Singh vs ACIT

The appellant made cash deposit of Rs. 4,51,000/- (tranches) in various bank accounts and source of same was also explained in length to the AO vide letter dated 12.12.2019 & 18.12.2019 . The appellant contended that source of cash deposit emanated partly out of opening cash as on 31.03.2012, redeposit of cash through preceding cash withdrawals & also from Mr. Bhati which was evident from the seized material. Further to fortify the contention, the appellant filed copy of Cash Book, Personal Statement of Affairs & also filed submission linking the cash deposit to the seized material. However, the ld AO without assigning any speaking reason, rejected the contention of the appellant and made addition of Rs. 451000/- by considering the cash deposit into bank account to be unexplained without assigning any reason (what to say of cogent & speaking ) , for his non acceptance. Even on Ist appeal, the worthy CIT (A) also turned blind eye to the evidence furnished by the appellant & confirmed the addition made by the AO. As per AO (Pg No.4 of Impugned Order) During the year, the assessee has deposited Rs. 3,08,000 in his SBI A/C No. 64055151633, SBI SMS Highway and Rs. 1,43,000/- in his BOB A/C No. 31470100000300, therefore, it is seen that the assessee has deposited total amount of Rs. 4,51,000/- in his bank accounts. It is proposed to make an addition of the said deposits, as these deposits remain unexplained. Therefore, an addition of Rs. 4,51,000/- is being made to the income of the assessee as undisclosed income. As per CIT (A) (Pg No. 12 of Impugned Order) The submissions of the appellant are very vague and do not explain with evidence as to how the inferences drawn by the AO is incorrect. Merely submitting the cash book does not explain the source of cash deposits into the Bank Account. As regards the appellants contention that the seized document is itself evidence that Rs.35 lakh was realized in tranches from Shri Chandra Mohan Bhatti during the FY 2012-13, the order of the AO does not record any such finding. The appellant has failed to substantiate his submissions with supporting evidences. In view thereof, I do not find any reason to differ with the addition made by the AO and addition made by the AO amounting to Rs. 4,51,000/- on account of unexplained cash deposit in the two Bank Accounts is upheld. SUBMISSION:-

7 ITA No. 83/JP/2023 Kishan Singh vs ACIT

The action of the lower authorities in making /confirming addition of cash Deposit into bank account to the tune of Rs. 451000/- , by considering the same to be unexplained & originated from undisclosed sources , is bereft of any merit & inconsiderate to the detailed submission & information filed by the appellant & even contrary to information /recitals contained in seized material and for want of other , detailed point wise as under :- 1. That the addition of Rs. 451000/- made by the AO is purely based upon surmises & conjectures and inconsiderate of the detailed information & explanation filed by the appellant during course of assessment proceedings . Your honour will appreciate on mere perusal of assessment as well as appellate order that no reason have been assigned for considering cash deposit to be unexplained . There is no whisper in the order of both the lower authorities about opening cash in hand , which was accepted in assessment for preceding year , was consumed elsewhere or not available with the appellant .

8 ITA No. 83/JP/2023 Kishan Singh vs ACIT

order that opening cash was consumed & not available with the appellant . [Emphasis supplied] 4. That ld AO failed to even appreciate that the total cash withdrawal made from the bank accounts stood at Rs. 3,10,000/- during relevant year , which formed part of cash deposit into bank account. Therefore, there was no justification on the part of AO to disregard the factum of preceding cash withdrawal forming source of redeposit of cash into bank account. Moreover, there was no incriminating material with the department that cash withdrawal on prior occasions was not available for making redeposit. [emphasis supplied]

9 ITA No. 83/JP/2023 Kishan Singh vs ACIT

From the bare perusal of seized document (Kindly refer Pg 16 ), it is self evident that the appellant realized Rs. 35 Lakhs in tranches from Mr. Bhati during FY 2012-13 and therefore , in absence of any incriminating material to the effect that same was consumed elsewhere , the availability of same in hands of appellant for making deposit into bank account cannot be ruled out in any stretch of imagination.

10 ITA No. 83/JP/2023 Kishan Singh vs ACIT

submissions filed vehemently argued that the lower authorities has

erred in confirming the addition of Rs. 4,51,000/- without

appreciating facts placed on record. The assessee has explained

the source of these cash deposit vide letter dated 12.12.2019 &

11 ITA No. 83/JP/2023 Kishan Singh vs ACIT

18.12.2019. The source this cash is supported from the cash book

filed and the same is also sourced from the amount already

withdrawn from the bank account and also from Mr. Bhati which is

evident from the seized material. The ld. AR of the assessee also

submitted personal statement of affairs & also filed submission

linking the cash deposit to the seized material. The lower authority

without dealing with the same in speaking order simply passed an

order confirming the addition. The ld. AR of the assessee also

stated even the ld. CIT(A) who ought have considered the

submission but has not passed the order after considering the

merits of the case.

lower authorities to the extent as it is favourable to the revenue. As

regards the relief granted by the ld. CIT(A) to the assessee

revenue has not challenged that order as the tax effect was low. To

that effect the ld. DR submitted the report of the AO wherein AO

has contended as under:-

“Sub:- Appeal before Hon’ble ITAT in ITA No. 83/JP/2023 (A.Y 2013-14) in the case of Kishan Singh, Jaipur (PAN: AGWPS6004N)- regarding- Reference: Your letter No. 207 dated 12/07/2023.

12 ITA No. 83/JP/2023 Kishan Singh vs ACIT

Sir, Kindly refer to the above mentioned subject and reference thereto. In this connection, it is submitted that considering the tax effect as below the prescribed limit for filing further appeal as per CBDT’s circular No. 17/2019 dated 08.08.2019, no further appeal has been made on the issue of addition of Rs. 24,49,000/- made on account of unexplained deposits of funds.”

record. We note that the lower authorities have confirmed these

additions but has not appreciated the set of facts placed on record

by the assessee vide his letter dated 12.12.2019 and 18.12.2019.

The ld. CIT(A) has based on the submissions placed on record has

allowed, the claim of the assessee for receipt of Rs. 24,49,000/-

and the assessee has deposited the money source from that

money has been confirmed even though the assessee has

submitted cash book, personal statement of affairs and submission

linking the cash deposit to the seized material and thus we see not

reasoned finding of the lower authorities for these much

submission filed for the addition of Rs. 4,51,000/-. The ld. CIT(A)

has not allowed the claim of the assessee stating that merely

submitting the cash book does not explain the source of cash

deposits into the Bank Account. As regards the appellants

13 ITA No. 83/JP/2023 Kishan Singh vs ACIT

contention that the seized document is itself is evidence that Rs. 35

lakh was realized in tranches from Shri Chandra Mohan Bhatti

during the FY 2012-13, the order of the AO does not record any

such finding but simply stated ;

“the appellant has failed to substantiate his submission with supporting evidences. In view thereof, I do not find any reason to differ with the addition made by the AO and addition made by the AO amounting to Rs. 4,51,000/- on account of unexplained cash deposit in the two Bank Accounts is upheld.”

submission of the assessee, the action of the lower authority in

confirming the addition of Rs. 4,51,000/- by not considering the

same as explained for which the ld. AR of the assessee drawn our

attention to the submission made during the assessment

proceeding and same is reiterated herein below.

“15) Details & source of cash deposit into bank account The assessee has made cash deposit of Rs. 8,50,000/- into bank accounts during the relevant year on piecemeal basis. In this regard, it is submitted that same were deposited out of realization of Rs. 35,00,000/- from Mr. Bhati (as per exhibit AS-1, Pg 6), cash withdrawal of Rs. 2,10,000/- from Bank account and opening cash balance. Thus, no adverse inference should be drawn on account of piecemeal cash deposition as each & every cash deposit is backed by explained source & even evident from seized material. The copy of cash book is enclosed to substantiate the contention. Moreover, your good self will appreciate on perusal of page 6 of exhibit I that assessee realized whopping sum of Rs. 35,00,000/- in cash from Mr. Chandra Mohan Bahti.”

14 ITA No. 83/JP/2023 Kishan Singh vs ACIT 10. Thus, we find from the submission so made by the assessee

and the finding of the recorded in the order of the assessment.

There is no whisper in the assessment order as to why the

submission made by the assessee is not considered. So far as

deposit of cash into bank account for an amount of Rs. 4,51,000/-

is concerned. We have also gone through the finding of ld. CIT(A)

wherein ld. CIT(A) has not granted the benefit of the submission

contending that there is no evidence as to the fact that the

assessee released Rs. 35,00,000/- in trenching Sh. Chandra

Mohan Bhatti and therefore, the explanation of the assessee has

not considered. We find from the submission and facts in the form

of evidence such as bank statement cash book and statement of

other details to substantiate the source of cash deposit. However,

this evidence so filed by the assessee never dealt with while

passing the order nor the same is found to be incorrect. We also

note that even the Assessing Officer has not recorded the

explanation provided by the assessee in the assessment

proceedings, the assessee has already justified the deposit of cash

by submitting document and withdrawal of cash from the bank

account of the assessee these primarily evidences placed on

record from the assessment proceedings is not properly dealt by

15 ITA No. 83/JP/2023 Kishan Singh vs ACIT the lower authorities. Based on these finding we see no reason to

disbelieve the explanation so furnished for the source of cash

deposits of Rs. 4,50,000/- made by the assessee. In terms of these

observations, the ground No. 1 raised by the assessee is allowed.

of the assessee and evidences by the lower authorities. Since, we

have considered that while dealing with the Ground Nos.1

therefore, ground no 2 & 3 raised by the assessee become

educative in nature.

In terms of these observations, appeal of the assessee is

allowed.

Order pronounced in the open Court on 28/07/2023 Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judcial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 28/07/2023 *Ganesh Kumar, PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Kishan Singh, Jaipur 2. izR;FkhZ@ The Respondent- ACIT, Central Circle-04, Jaipur vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr@ CIT(A) 4.

16 ITA No. 83/JP/2023 Kishan Singh vs ACIT

विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. 6. xkMZ QkbZy@ Guard File { ITA No. 83/JP/2023} vkns'kkuqlkj@ By order सहायक पंजीकार@Aेेज. त्महपेजतंत