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Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 24/08/2023 pertaining to Assessment Year 2017-18. 2. In the present appeal, Assessee has raised the following grounds of appeal:
1. “That the Ld. CIT(A) has erred in confirming the action of the Assessing Officer in sustaining the addition of Rs. 13,23,000/- on account of cash deposit in the bank account.
That the Ld. CIT(A) has failed to appreciate the fact that the cash flow chart as submitted to the CIT(A) to explain the availability of cash for depositing in the bank account. 3. That the addition as sustained by the Ld. CIT(A) u/s 69 is uncalled for and the submissions as made before the CIT(A) has not been considered properly. 4. That the appellant craves leave to add or amend the grounds of appeal
before the appeal is finally heard or disposed off.”
3. During the course of hearing, the ld AR submitted that this is a case of an individual who is an agriculturist. Notice under section 142(1) dated 09.03.2018 was issued in the case of the Assessee for filling the return of income. The department issued the said notice to the Assessee on account of information with the department regarding deposit of cash amounting to Rs. 35,43,000/- with Corporation bank (demonetization and pre-demonetization period). Thereafter, the case of the Assessee was selected for scrutiny. During the course of assessment proceedings, benefit of cash deposit out of sale proceeds of agricultural land and withdrawals from the bank, amounting to Rs. 22,20,000/- was given to the Assessee and balance amount of Rs. 13,23,000/- was brought to tax. Against the order of the Ld. A.O, the assessee went in appeal before the CIT(A) and the same was dismissed vide order dated 24.08.2023. Being aggrieved, the assessee is now in appeal before the Tribunal.
4. It was submitted that the Assessee has filed a cash flow statement before the department. The Assessee is an agriculturist and derives gross agricultural income to the tune of Rs. 15,79,864/- during the year under consideration (copy of J-Form placed on record). Further the copy of the statement of the commission agent to whom major agricultural produce was sold is also placed on record. The agricultural operations are carried out by the Assessee on the land owned by himself and mother totaling to 5 acres and also on a leasehold land of 10 acres. From the perusal of the cash flow statement, it is clear that the opening cash in hand of Rs. 28,62,000/- as on 01.04.2016 has been taken by the Assessee. The justification of the same was given before the CIT(A). The copies of the bank statements for the period 01.04.2014 to 31.03.2016 which supports the opening balance of Rs. 28,62,000/- are placed on record. It was submitted that no adverse finding has been given by the CIT(A) with regard to the cash flow statement as filed before him.
5. It was further submitted that the Ld. CIT(A) has dismissed the appeal of the Assessee only for the sole reason that what was the need of keeping huge amount of cash at home despite having the bank accounts. In this regard, the Ld. Counsel for the assessee submitted that the cash in hand as per the cash flow statement is duly supported by proper source in the form of cash withdrawals from banks, agricultural income and sale of rural agricultural land. Even Otherwise, in the case of the Assessee, even the department has not brought out any material on record to show that assessee is having any additional source of income other than the agricultural income. The onus was on the AO as the assessee has duly proved the source of cash as available with him as per the cash flow statement. There is no law in the country which prevents citizens to frequently withdraw and deposit his own money. Ld. Counsel for the Assessee submitted that the documentary evidences furnished before clearly clarifies that on each occasion at the time of deposit in his bank account, assessee had sufficient availability of cash. The said cash had not been utilized by the Assessee anywhere till its deposit in the bank account. Even, there is no law in the Country which prevents anybody for not withdrawing cash from the bank and to keep the same at home.
The ld. Counsel for the assessee placed reliance upon the following decisions wherein it has been held that there cannot be any addition on the sole ground that there was time gap between the withdrawals and redeposit of cash and it is also evident that the Assessee has not used the said amount anywhere else: i) Shiv Charan Dass vs CIT as reported in 126 ITR 263 (P& H HC) ii) Ravinder Singh Negi vs DCIT in & 812/Chd/2014 (Chandigarh Bench) iii) CIT vs. Palwinder Pal Singh (P&H HC) in ITA No. 76 of 2011 order dated 14.11.2011 iv) ITO vs. Ashok Kumar Jain (ITA No. 180/Chd/2013) order dated 3.11.15. (Chandigarh Bench) v) ACIT vs. Sh. Joginder Paul (ITA No. 734/Chd/2014) order dated 12.01.2015. (Chandigarh Bench) vi) Harcharan Singh vs ITO (ITA No.164/ASR/2015) order dated 3.2.2016. (Amritsar Bench) vii) ITO vs Chandan IMijjer in ITA No. 61/Asr/2016 order dated 08.08.2016 (Amritsar Bench) viii) ACIT vs. Baldev Raj Chawla 121 TTJ 366 (Del) ix) CIT vs Kulwant Rai as reported in 291 ITR 36 (Del HC) ix) Rajinder Singh vs ACIT in ITA No. 1439/Del/2017 order dated 06.02.2018 (Delhi Bench) x) ITO vs Mrs Deepali Sehgal in ITA No. 5660/Del/2012 order dated 05.09.2014 (Delhi Bench) xi) Gordhan vs ITO in ITA No. 811/Del/2015 vide order dated 19.10.2015. (Delhi Bench) xi) DCIT vs Smt Veena Awasthi in ITA No. 215/LKW/2016 order dated 30.11.2018 (ITAT Luckhnow) xii) ITO vs Shri M Prabhakar in ITA No. 1727/Hyd/2014 order dated 11.11.2016 (Hyd Bench)
The ld. Counsel for the Assessee submitted that the Ld. CIT(A) at the time of dismissing the appeal of the Assessee in para 7.3 onwards has referred to the provisions of sec 68/69A of the Act and has held that the onus is on the Assessee to give bonafides of the money credited in the bank account and has further relied on certain Judgments on Sec 68 of the Act. In this regard it was submitted that the Assessee has duly discharged his onus. The cash flow has been made with proper source of each and every entry and under such circumstances, the benefit of cash as available with the Assessee cannot be denied to the Assessee.
The Ld. DR submitted that the brief facts of the case are that a notice u/s 142(1) was issued to the appellant requiring him to furnish his return of income for the A.Y. 2017-18, in order to examine the information of substantial cash deposits in the bank account of the assessee during the demonetization period. It was submitted that total cash deposits of Rs. 45,43,000/- were made by the assessee in his bank account out of which Rs. 10,40,000/- were deposited during the period of demonetization. During the course of assessment proceedings, as recorded under para 3 of the assessment order the assessee explained the sources of cash deposits of Rs. 22,20,000/- which were stated to be out of sale of agricultural land and past withdrawals from his bank account. In the absence of any further explanation, the AO completed the assessment proceedings by making an addition of Rs. 13,23,000/- which remain unexplained u/s 69A of the Act.
It was submitted that during the course of appellate proceedings, the main line of argument taken by the assessee was that he being an agriculturist, deriving agricultural income, and that he and his family owns certain agricultural land besides obtaining lease of agricultural lands from others and that the entire agricultural produce obtained from these lands was sold under the name of the assessee himself. The assessee, further submits that he has derived gross agricultural income of Rs. 15,79,864/-. However, the assessee was completely silent on the need of keeping huge amount of cash at home despite having as much as three known bank accounts in his name. The assessee is attempting to show the source of cash deposits during the demonetisation period from the bank withdrawals made as early as the month of May, 2015 and before 31.03.2016. Without furnishing any cogent reason for keeping such a huge quantity of cash at home, the submissions of the appellant do not appear anything more than the self-serving statement.
It was accordingly submitted that it is apparent that the appellant has completely failed to offer any satisfactory explanation either before the AO during assessment proceedings or during appellate proceedings, despite affording sufficient number of opportunities. The only submission made by the appellant was that the source of cash deposits was out of the agricultural income, the credit for which has been given by the AO for Rs. 22,20,000/-. It is in the respect of balance amount of cash deposits of Rs. 13,23,000/-, which are treated as income u/s 69A of the Act and there is thus no infirminity in the order of the AO and that of the ld CIT(A) in confirming the same.
We have heard the rival contentions and purused the material available on record. The factum of the assessee being an agriculturist owning and leasing agriculture land and carrying out agriculture activities for last many years have not been disputed by either of the authorities. The credit for sale proceeds of agriculture produce sold during the year has been allowed by the AO and is not under dispute. The source of remaining deposits of Rs 13,23,000/- has again been explained out of savings from past sale of agriculture produce and availability of cash at the beginning of the year amounting to Rs 28,62,000/-. In support of his contention, the assessee has submitted copies of J forms, bank statements for the period 1/04/2015 to 31/03/2016 showing the cash withdrawals, copy of assessee’s account with M/s Sant Attar Singh Trading Co., Sangrur showing net cash payments of Rs 11,74,545/- as on 31/03/2016 through whom the agriculture produce has been sold and the cash flow statement for the year under consideration. The aforesaid documentation are on record and have not been rebutted by the Revenue. We therefore find that the assessee has sufficiently explained and demonstrated the nature and source of cash deposits during the year as out of savings from sale of agriculture produce during the earlier financial years and availability thereof at the beginning of the year. As a result, we donot find any justifiable basis for the AO to exercise his discretion to invoke the provisions of section 69A and the addition of Rs 13,23,000/- is hereby directed to be deleted.
In the result, the appeal of the assessee is allowed.