RUBY SINGH,NEW DELHI vs. DCIT, CENTRAL CIRCLE-8, NEW DELHI

per the issues raised in the show cause notice and thus the source of cash deposit was remained unverified and thus unexplained. The Ld. Sr. DR further submitted that the assessee has furnished inaccurate particulars in the submissions as cash in hand shown in the statement before the AO was distinct and different from cash in hand shown in ‘her’ income tax returns for AY 2012-13 and 2013-14. The Ld. Sr. DR also submitted that the assessee is sole proprietor of M/s Moonage Films, therefore, how there can be two separate cash in hand and two cash books for a single PAN No. Ld. Sr. DR submitted that assessee failed to reconcile the opening cash in hand as on 1.4.2012 with the income tax returns of previous year AY 2012-13, therefore, the AO rightly made the addition of Rs. 2,05,000/- in the hands of the assessee u/s. 68 of the Act on account of unexplained cash deposit to her bank account.

5.4 On careful consideration of submissions from the relevant part of the assessment order, we note that the AO made addition in the hands of the assessee with the following observations and findings :-

“4.2. The reply of the assessee has been perused but not found tenable in respect of cash deposit on the following reasons:- i) On perusal of ROl for AY 2012-13, it is found that assessee has declared cash in hand NIL/- as (on 31.3.2012) the same will be opening cash in hand as on 01.04.2012. But the assessee has submitted following cash in hand details for F.Y.2012-13:

Further, this discrepancy in cash in hand was pointed out in the show cause dated 21.12.2021 and assessee was asked to reconcile the same. The assessee failed to explain why there is different opening cash in hand for the same PAN. The reply is not tenable as the sole proprietorship firm and the person who has control over the firm should be treated as one entity and the financial credential should reconcile. Further, assessee failed to furnish the explanation as how the cash in hand on personal a/c and on proprietorship a/c should be different. The following accounting of assessee does not match with accounting standard of AS-1 which required true and fair disclosure. As the assessee has declared Rs. NIL as closing cash in hand in the ROl for AY 2012-13, the same is allowed as opening cash in hand for this financial year i.e. 2012-13. Cash in hand on personal account is remained unverified and it is not considered as genuine cash in hand of assessee. ii) The assessee has submitted the details of month wise cash flow statement depicting opening balance, cash deposit, cash withdrawal from the bank is as follows:

From the above submission, it can be seen from the ROI of A.Y. 2012-13 that the opening cash in hand with assessee was NIL for the A.Y. 2013-14. The assessee has submitted two different cash book for personal account and for the proprietorship. The same cannot be relied as there cannot be two separate cash book for the year. iii) Further, on perusal of Bank a/c statement, reply dated 26.11.2021 and Month wise cash flow, it is observed that assessee paid Rs.18,900/- in cash on 1.4.2012 and Rs. 2,10,000/- on 16.4.2012 as part payment for purchase of immovable property. Moreover, assessee had the total cash in hand upto July was Rs. 50,000/-(opening cash in hand Rs. NIL/- and cash withdrawal of Rs.50,000/-) whereas the total cash paid by the assessee upto July was Rs. 2,28,900. How can assessee deposit Rs.2,05,000/-upto July whereas assessee has made more expanse in cash than available? The excerpt of reply dated 26.11.2021 is reproduced below:

Therefore, it is clear that assessee had excess cash which was out of books and same was deposited in Standard Chartered Bank (52910029713). 4.3. The assessee has failed to submit the justification for the cash deposit and source of cash during the year. From the cash book submitted by the assessee it cannot be concluded as how assessee has incurred here personal and other household expenses. 4.4 Further, the contention of tax planning of assessee is not tenable and also not acceptable. It is pertinent to quote the decision of Apex Court in the case of Mc Dowell & Co. Ltd Vs CTO where Hon'ble Supreme Court held that tax planning may be legitimate provided it is within the framework of law. Colorable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honorable to avoid the payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay to taxes honestly without resorting to subterfuges. 4.5 The following conclusions can be derived from the above-mentioned paragraphs: -The assessee has furnished inaccurate particulars in the submission as cash in hand shown in the submission is different from the cash in hand shown in Income tax return. -The assessee is sole proprietor of the Moonage films, so how can there be two separate cash in hand and two cash books for the single PAN.

- The assessee has failed to reconcile the opening cash in hand as submitted in the reply vis-a-vis from Income Tax Return of the previous year. -The assessee has no running business to generate cash amount. 4.6 In view of the above, it is clearly evident that the cash deposit Rs.2,05 000/- is unaccounted cash available with the assessee in the F. Y under consideration and not declared in her ITR. However, show cause was issued to the assessee with a direction to explain the cash deposit along with documentary evidence. 4.7 Further, the assessee complied to the show cause notice with documentary evidence and on perusal of them, the same is not tenable as per issues raised in the show cause and the source of cash deposit is remains unverified. Therefore, as per discussion in para 4.1to 4.7, it is clearly evident that the Cash deposit of amount to Rs. 2,05,000/-in Standard Chartered Bank (52910029713) is nothing but unaccounted cash of the assessee which was not disclosed as income by the assessee and the Cash deposit of amount to Rs. 2,05,000/- is added in the income of the assessee as unaccounted cash credits us 68 of the Income Tax Act, 1961for the AY under consideration.” 5.5 Further from the relevant para of First Appellate order, we note that Ld. CIT(A) upheld the said addition with the following factual findings and conclusions :-

“4.4.6 During the assessment proceedings, the Assessing Officer noted that the appellant has deposited cash of amount of Rs.2,96,000/- in Standard Chartered Bank. The appellant explained that the cash deposit was from the opening cash in hand as on 01.04.2012 belonging to M/s Moonage account (Rs. 40,322/-) and to Ruby Singh's personal account (Rs. 5,30,202/-). The Assessing Officer found that the appellant had declared cash in hand at Nil as on 31.03.2012 as per her return of income of AY 2012-13. The closing cash in hand for AY 2012-13 would be the opening cash in hand for FY 2012-13. The assessee failed to submit the justification for the cash deposit and the source of cash during the year. From the cash book submitted by the appellant it cannot be concluded as to how the appellant has incurred a personal and other house hold expenses. The Assessing Officer therefore, considered the bank withdrawals and deposits upto July 2012 and made an addition of cash deposit of amount Rs. 2,05,000/- as unaccounted cash credit u/s 68 of Income Tax Act.

4.4.7 The appellant is a sole proprietor of M/s. Moonage Films and is filing her returns accordingly. During the course of the year there have been cash deposits amounting to Rs. 35,000/-in April 2012, Rs. 30,000/- in May 2012 and Rs. 1,40,000/- in July 2012 the total cash deposits in the Standard Chartered Bank upto July 2012 is therefore Rs. 2,05,000/-. The Assessing Officer made the addition of an amount of Rs. 2,05,000/- as unaccounted cash of the appellant which was not disclosed as income. The cash deposits amounting to Rs. 2,05,00/- were added to the income of the appellant an unaccounted cash credits us 68 of the Income Tax Act. The appellant tried to justify the source of this cash as the personal cash in hand of the appellant and submitted a figure of opening cash in hand of Ms. Ruby Singh's personal cash in hand. The justification submitted by the appellant does not seems to be acceptable in view of the following arguments: 1. The opening cash in hand figure of personal account of Ms. Ruby Singh is not supported by any documentary evidence. 2. As per the return of income filed by the appellant in response to notice u/s 148 of Income Tax Act the appellant disclosed both the current account in Oriental Bank of Commerce and saving account in Standard Chartered bank while disclosing their cash at bank. Since all the accounts of the appellant were disclosed which includes both business and personal accounts it can be safely presumed that the cash in hand disclosed in the return of income also includes both the business and the personal cash. Further year under consideration the opening cash in hand as per the return of income is grossly insufficient for such cash deposits in the bank. 3. As per the statement of Ms. Ruby Singh recorded w/s 131 of Income Tax Act by the DDIT, Investigation, Delhi she had clearly mentioned that all payments are received through banking channels and no payment received in cash in last six to seven years. Therefore, there is no possibility of any availability of cash with the appellant which could have been deposited in the bank account during the year. 4. Since there is no income in cash in last several years, there is no justification of having any cash in hand other than what has been withdrawn over the years from the bank.

Further, the appellant did not mention any specific reason for depositing cash in her bank account during the year. 5. On perusal of the details of expenditure it is noted that an amount of Rs. 18,900/- was paid in cash for a stamp duty on 01.04.2012 and a payment to seller in cash was made of an amount of Rs. 2,10,000/- on 16.04.2012. Therefore, if at all the contention of the appellant of opening personal cash is considered even then most of such cash have been exhausted in making these payments. 6. There is no justification of making monthly deposits every month in bank even out of the personal cash in hand, if any. 7. From the accounts submitted by the appellant it cannot be concluded as to how the appellant has incurred a personal and other house hold expenses during the year. 4.4.8 In view of the above, I am of the considered opinion that the source of cash deposited in the bank account upto the month of July 2012amounting to Rs. 2,05,000/- remains unexplained and there is no reason to interfere with the order of the Assessing Officer. Accordingly, the addition of cash deposit of amount of Rs. 2,05,000/- made to the total income of the appellant at unexplained cash credit u/s 68 of Income Tax Act is upheld. Accordingly, Ground Nos. 9 to 12 of appeal are dismissed. 5.6 On careful consideration of rival submissions on the issue basis taken by the AO for making the addition u/s. 68 of the Act and conclusions recorded by the Ld. CIT(A) for upholding the addition. At the very outset, we note that Ld. CIT(A) evaluated the findings of the AO and also considered the contentions of the assessee and thereafter upholding the addition by observing that the reopening cash in hand figure of personal account of assessee is not supported by any documentary evidence. The Ld. CIT(A) also observed that in the statement recorded u/s. 131 of the Act by the DDIT (Investigation), Delhi, the assessee had clearly mentioned that all the payments were received through banking channels and no payment is 45

received in cash in the last 6 to 7 years, therefore, there was no possibility of any availability of the cash of the appellant which could not have been deposited in the bank accounts during the year under consideration. On logical analysis of the findings arrived by the AO and observations recorded by the Ld. CIT(A), as reproduced hereinabove, first of all, we note that the AO in the reasons recorded for reopening of assessment for AY 2013-14 noted that cash in hand as per return was Rs. 2,56,942/- and the assessee in her reply noted by the AO at page 6 shown same amount of cash in hand as on 31.3.2012 thus the same cannot be considered as opening cash in hand as on 1.4.2012. The AO has recorded a clear findings that as per return of income for immediately preceding AY 2012-13 cash in hand at the end of financial period was NIL. Therefore, the AO as well as Ld. CIT(A) were correct and justified in dismissing the Cash Flow Statement submitted by the assessee showing personal cash in hand of Rs. 40,322/- and cash in hand of her firm M/s Moonage Films amounting to Rs. 5,30,702/-. From the relevant part of the assessment order from para 4.2 to 4.7 (supra), we further note that the assessee on 21.12.2021 was show caused by the AO to explain different opening cash in hand for the same PAN. After considering the reply of the assessee the AO rightly observed that the sole proprietorship concern and the person has control over the concern should be treated as one entity and financials statement reconciled accordingly as the assessee failed to substantiate that by way of tenable

explanation that how the cash in hand was personal account and on proprietorship concern a/c should be different and then the accounting adopted by the assessee was not in accordance with AS-1 which requires true and fair disclosure. The AO rightly took opening cash in hand on 1.4.2012 as NIL which is in confirmatory with the return of income for AY 2012-13. Therefore, the cash in hand shown by the assessee, in the statement of affairs submitted before the AO, of Rs. 40,322/- of personal account and Rs. 5,30,202/- was rightly disbelieved by the AO. The AO has made addition of Rs. 2,05,000/- picking up the cash deposit to the bank account of assessee in July, 2012 by observing that the assessee paid Rs. 18,900/- in cash on 1.3.2012 and Rs. 2,10,000/- on 16.4.2012 as part payment for purchase of immovable property and upto July, 2012 the assessee had availability of Rs. 50,000/- only out of withdrawal from the bank account whereas the total cash paid by assessee for purchase of property was Rs. 2,28,900 (Rs. 2,10,000 + Rs. 18,900) and then how assessee could have deposited Rs. 2,05,000/- upto to July, 2012 particularly when the assessee has made more expenses in cash than available with her. On logical evaluation of Cash Flow Statement of assessee, we clearly note that since the assessee has failed to substantiate the opening cash balance / cash in hand pertaining to proprietorship concern of Rs. 5,30,202/- consequently closing cash in hand of Rs. 3,19,202/- had been recalculated which comes to negative cash in hand of Rs. 2,10,202 (Rs. 5,30,202 – Rs. 3,19,202) which is higher than the

addition made by the AO of Rs. 2,05,000/- on account of unexplained cash deposit to the bank account No. XXXXX29713 of assessee with Standard Chartered Bank.

5.7 Ld. CIT(A) thus rightly observed that since there was no income or receipt in cash during the last several years, there was no justification of having any cash in hands otherwise, what has been withdrawal over the years from the bank accounts of the assessee. We also observe that the AO as well as Ld. CIT(A) provided due opportunity to the assessee to explain the source of cash deposit but the assessee did not submit any specific reason explaining the source of cash deposit during the year. In view of foregoing discussions, we decline to accept the explanation of the assessee as the assessee has failed to explain the source of cash deposit to her bank account upto the month of July, 2012 and hence, the impugned amount of Rs. 2,05,000/- remained unexplained and the AO was right in making the addition in the hands of the assessee u/s. 68 of the Act and hence, we are unable to see any perversity or any other valid reason to interfere with the findings of AO and conclusion recorded by the Ld. CIT(A), hence, we uphold the same. Accordingly, the ground no. 4 and 4.1 of assessee for AY 2013-14 are also dismissed.

The legal Ground no. 2 to 2.2 of assessee in other 06 appeals from assessment years 2014-15 to 2019-20. 6. The Ld. Representatives of both the sides submitted and agreed to the factual position that, except quantum the reasons recorded by the AO for initiation of reassessment proceedings u/s. 147 of the Act and for issuance of notice u/s. 148 of the Act are identical and similar, therefore, we took up the Appeal for assessment year 2013-14 as lead case to adjudicate the said legal grounds of assessee. Since in the earlier part of this order, we have dismissed the legal grounds no. 2 to 2.2 of the assessee challenging the validity of assumption of jurisdiction by the AO for initiation of reassessment proceedings u/s. 147 of the Act and issuance of said notice u/s. 148, therefore, our conclusion drawn for assessment year 2013-14 (supra) would apply mutatis mutandis to the identical and similar grounds no. 2 to 2.2 of assessee in other 06 appeals. Consequently, grounds no. 2 to 2.2 of the assessee in other 06 appeals for AY 2014-15 to 2019-20 are also dismissed.

Ground no. 3 and 3.1 of assessee for AY 2014-15 to 2017-18

bank account of the assessee. Therefore, our above conclusion drawn for assessment year 2013-14 for Ground no. 4 and 4.1 would apply mutatis mutandis to the ground no. 3 and 3.1 of the assessee in other 06 appeals. Accordingly, addition made by the AO u/s. 68 of the Act on account of cash deposit to the bank account of the assessee in the appeals for AYrs 2014-15 to 2017-18 are also confirmed. Accordingly, the ground no. 3 to 3.1 of the assessee in said four appeals from assessment years 2014-15 to 2017-18 are also dismissed.

Ground no. 3, 3.1, 4, 5 & 6 of assessee in assessment year 2018-19 and 2019-20.

“3. That the Ld. CIT(A) has further erred both in law and on facts in upholding an addition of Rs. 1,39,200/- representing the alleged unexplained cash credit u/s. 68 of the Act read with section 115BBE of the Act. 3.1 That while confirming the above addition, the Ld. CIT(A) has failed to appreciate the factual substratum of the case, statutory provisions of law and as such, addition so confirmed is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable.

purchase of old commercial vehicles, to M/s Arihant Associates and its partners. The Ld. Counsel for the assessee also submitted that assessee has been well connected in the business of social circles, of New Delhi, therefore, she was taking salary of Rs. 12 lacs. She was paid Rs. 10,00,800/- in FY 2017-18; Rs. 10,80,000/- in Financial year 2018-19 pertaining to assessment year 2018-19 and 2019-20. The Ld. Counsel for the assessee also submitted that in the statements recorded by Investigation Wing, Shri Chetan Shukla partner of M/s Arihant Associates clearly stated that employee-employer relationship was existing between the assessee and M/s Arihant Associates and the assessee introduced certain professionals of New Delhi in the field of sale and purchase of old commercial vehicles to the said firm, therefore, assessee provided services to M/s Arihant Associates and Shri Chetan Shukla against salary received by her. Ld. Counsel for the assessee submitted that the expectation of generating business by employing assessee did not materialise, therefore, employment of assessee was terminated after two years, but it is also true that all the activities of the business does not always result into profit. Ld. Counsel for the assessee submitted that the assessee received salary from M/s Arihant Associates after deduction of TDS which was declared in her return of income for the relevant assessment years, therefore, the same cannot be treated as unexplained credit in the hands of the assessee merely on the basis of the surmises

and conjectures and baseless allegations of the AO made in the assessment order, therefore, the addition may kindly be deleted.

8.2 Replying to the above, Sr. DR submitted that the AO made detailed analysis and verification and thereafter found that the assessee has received the impugned amount from M/s Arihant Associates and on verification of documents, it was also found that there exist no employee-employer relationship between the assessee and the said firm. The AO also observed that the line of business of assessee was totally unrelated and different with the business line of M/s Arihant Associates, as the assessee was in the business of “film production” whereas the said firm was dealing in “second hand old commercial vehicles”. The AO also concluded that there was no employee-employer agreement between the assessee and the firm and the payments made to assessee were not periodic, but random and was made in lumpsum. Thus, the assessee failed provide the details of business procured by her for M/s Arihant Associates in lieu of which impugned salary has been shown as paid. The AO categorically noted that the assessee has no expertise in the core business of M/s Arihant Associates i.e. sale and purchase of old commercial vehicles, therefore, the genuineness of transaction received on salary in line of service rendered by the said firm to the assessee could not established. The Ld. Sr. DR. Vehemently contended that with these observations the AO rightly observed that the transaction of receipt of Rs.10,00,800/- by the assessee from M/s 53

Arihant Associates could not be treated as genuine salary and thus it was bogus entry in the disguise of salary. He further submitted that the assessee had only declared Rs. 10,00,800/- as salary income in her income tax return for AY 2018- 19, whereas there was credit of Rs. 11,40,000/- to her bank account. Therefore, the AO was quite correct and justified in making further addition of remaining amount of Rs. 1,39,200/- in the hands of the assessee as unexplained credit u/s. 68 r.w.s. 115BBE of the Act. He further submitted that from the assessee had only The ld. Sr. DR supported the final conclusion of the AO and lastly submitted that the AO also rightly noted that since the assessee herself has offered amount of Rs. 10,00,800/- for taxation as salary income at the normal tax rate, but being not satisfied with the explanation of assessee, the AO concluded that the said unexplained amount was to be taxed at higher rate u/s. 115BBE of the Act.

8.3 Placing rejoinder to the above, Ld. Counsel for the assessee submitted that though the assessee was not having any expertise in line of business undertaken by the said firm M/s Arihant Associates, but assessee was not expecting to procure purchase and sale of old commercial vehicles, but the duty given by the said firm to the assessee was to introduce M/s Arihant Associates and its partner Shri Chetan Shukla to the business of social circle as entrepreneur in the similar line of business in New Delhi only, so that they may be able to procure business for purchase of sale of old commercial vehicles in New Delhi. Therefore, when the 54

assessee had rendered services in line of that, she received salary from the said firm, which cannot be alleged to be bogus salary merely because the assessee was not having any expertise in the line of business of the said firm and in the absence of any written employee-employer agreement between the assessee and M/s Arihant Associates.

8.4 On careful consideration of rival submissions and on perusal of the relevant Paper Book of the assessee, first of all, we note that undisputedly there was no employee-employer agreement between the assessee and M/s Arihant Associates and the assessee was not having any expertise in the line of business of the said firm i.e. purchase and sale of old commercial vehicles. From the relevant para of assessment order, we note that the AO recorded the following observations and finding :-

“4.1 To ascertain the genuineness of transaction and identity and creditworthiness of the lender, financials of M/s Arihant Associates (PAN: ABFFA2155C) from the ITBA portal were perused and found that the its registered address is A-54, Sarvodaya Nagar, Indira Nagar, Lucknow, UP Financial of the M/s Arihant Associates are reproduced below:- Particulars AY 2017-18 AY 2018-19 AY 2019-20 Total income 5072 0 36419 Revenue from 0 0 988503 operations Compensation to 56500 4073 419860 employees

(inclusive of salary expenses) A) Further, composite analyses of financials of Ms. Ruby Singh and M/s Arihant Associates revealed that salary income as claimed by Ms. Ruby Singh is not getting reflected in the financials of M/s Arihant Associates (as expense). Moreover, M/s Arihant Associates is not in a position to pay such huge salary. Further the bank statement and statement of Sh. Chetan Shukla dated 16.9.2020 partner in M/s Arihant Associates, was analyzed and found that their exist a mismatch and conflict in the stand taken by M/s Arihant Associates and Ms. Ruby Singh which is follows:- S.No. Salary claimed Salary claimed Difference (Rs.) by Ms. Ruby by M/s Arihant Singh (Rs.) Associates (Rs.) AY 2017-18 0 0 0 Ay 2018-19 10,00,800 11,40,000 1,39,200 Ay 2019-20 10,09,800 12,20,000 2,19,200

4.3 It can be clearly seen from the above tables, that M/s Arihant Associates has claimed Rs. 4,19,860/- as compensation to employees (In its financials) during the year under consideration whereas claiming to have paid Rs. 12,20,000/- as salary to Ms. Ruby Singh. Morever, there exist no employer-employee relationship between both the parties. Ms. Ruby Singh’s line of business is totally unrelated with line of business of M/s Arihant Associates. From the above discussion, it is concluded that all these were mere bogus entries on the following account. i) M/s Arihant Associates transferred Rs. 32,60,000/- to Ms. Ruby Singh whereas Ms. Ruby Singh claims that Rs. 20,80,000 has been transferred to her as salary. ii) M/s Arihant Associates is based at Lucknow and Ms. Ruby Singh is based at Delhi.

iii) M/s Arihant Associates and Ms. Ruby Singh are not in similar line of business. Ms. Ruby Singh is in business of film productions whereas M/s Arihant Associates deals in second hand mother vehicles. iv) There is no employer-employee agreement between M/s Arihant Associates and Ms. Ruby Singh. v) Payments made to Ms. Ruby Singh were not periodic, but random and were made in lump sum. vi) Both M/s Arihant Associates and Ms. Ruby Singh failed to provide the details of business procured by Ms. Ruby Singh for M/s Arihant Associates, in lieu of which salary has been shown as paid to her. vii) Ms. Ruby Singh has no expertise in the core-business of M/s Arihant Associates i.e. sale of second hand commercial vehicle. 4.4 In view of the above facts, it is evident that genuineness and nature of transaction could not be established and therefore, the credits of Rs. 11,40,000/- in the bank account of Ms. Ruby Singh are unexplained credit out of which only Rs. 10,00,800/- has been offered for taxation under the disguise of salary income. Consequently, the transaction of Rs. 10,00,800/- to Ruby Singh from M/s Arihant Associates could not be treated as genuine salary and it is bogus entry in disguise of salary. Assessee routed her unaccounted fund/ cash in her book of account by managing bogus entries. However, assessee offered Rs. 10,00,800/- for taxation as salary income at the normal tax rate whereas the same is taxable at special rate u/s. 115BBE. By this assessment order, the assessee is being taxed at the special rate u/s. 115BBE on the amount Rs. 10,00,800/- for the AY under consideration. “ 8.5 Further from the operative paras of the Ld. CIT(A)’s order, we also observed that Ld. CIT(A) has upheld the said conclusion of the AO with the following observations and findings:-

“4.4.8 The nature of alleged employment and amount received in disguise of salary has been discussed while deciding the additional ground. Accordingly, the Assessing Officer has taxed the remaining amount of Rs. 1,39,200/- (Rs. 11,40,000 - Rs. 10,00,800) as unaccounted income of the appellant and added to the income of the appellant as unexplained cash credit us 68 r.w.s 115BBE of Income Tax Act. As per records Ms Arihant Associates had made a payment of Rs. 11,40,000/- to the appellant during the year. Out of this, an amount of Rs. 10,00,800/- has already been considered as unexplained amount paid in disguise of salary and has been taxed at special rate W/s 115BBE of Income Tax Act. The remaining amount of Rs. 1,39,200/- has been received by the appellant from the Ms Arihant Associates during the year cannot be considered as amount received for any genuine employment activity. The appellant has considered this amount as out of pocket expenses which cannot be considered as correct in view of the lack of existence of employer employee relationship between M/s Arihant Associates and the appellant. Accordingly, I am of the considered opinion that the amount of Rs. 1,39,200/- cannot be out of pocket expenses against the employment and are in the nature of unexplained cash credits. The Assessing Officer has correctly added the same as unexplained cash credit us 68 r.w.s. 115BBE and I do not find any justification to interfere with the order of the Assessing Officer. The addition of Rs. 1,39,200/- as unexplained cash credit u/s 68 r.w.s 115BBE of the Income Tax Act made by the Assessing Officer is therefore correct and the same is upheld. Accordingly, Ground Nos. 6 to 6.5 of appeal are dismissed.” 8.6 On careful consideration of the above submissions, basis taken by the AO for making the addition and observations of the Ld. CIT(A) in confirming the addition, we note that the AO has rightly made the addition in the hands of the assessee doubting the genuineness of the transaction of salary received from M/s Arihant Associates as the said firm was in the line of purchase and sale of old

commercial vehicles whereas the assessee has no expertise in the same field and the assessee was in the business activity of Film production. This fact has also not been disputed by the Ld. Counsel for the assessee that there was no employee- employer greement between the assessee and M/s Arihant Associates. Copies of bank account reveals that impugned salary payments were made to the assessee by the said firm were not periodic but random and in lumpsum. The assessee failed to provide the details of business or connection procured by her for M/s Arihant Associates in lieu of which salary was received from the said firm. The Ld. Counsel for the assessee could not controvert the above factual finding except submitting that she procured relations for the said firm in the business & social circles of New Delhi and salary has been routed and received through banking channels, after deduction of TDS, therefore, the same cannot be doubted. The said contention of the Ld. Counsel for the assessee is not tenable and sustainable in view of the factual finding noted by the authorities below, which has also been found correct on factual findings on the basis of aforementioned logical analysis. On evaluation of the conclusion drawn by the AO and upheld by the Ld. CIT(A), we also observe that since the assesse had already declared the impugned amount of Rs. 10,00,800/- as salary income and offered the same for taxation at the rate of normal tax rate, in her return of income, hence, the AO has not made any further addition. But we find in the instant case, the assessee had not proved the nature of

credit to be salary by proving employer-employee relationship. Hence, addition made by the AO u/s. 68 is justified. Once Section 68 addition is sustained, logical conclusion would be to invoke Section 115BBE of the Act. The AO noted that there was credit of Rs. 11,40,000/- to the bank account of assessee and she had already drawn and shown amount of Rs. 10,00,800/- in her return of income, thus, the AO rightly made the addition of remaining amount of Rs. 1,39,200/- in the hands of the assessee. From para 4.3.4 of first appellate order, we further note that the ld. CIT(A) upheld the said finding of the AO with detailed and sustainable conclusion. Thus, we are unable to see any valid reason to interfere with the findings arrived by the authorities below, hence, we uphold the same. Accordingly, the grounds no. 3, 3.1 and 4 of the assessee are dismissed.

Ground no. 3, 3.1 and 4 of assessee for AY 2019-20

8.7 Since except amount in dispute, the facts and circumstances of assessment year 2019-20 are identical and similar to the facts and circumstances of AY 2018-19 on the issue of alleged unexplained salary received by the assessee and unexplained cash deposits to her bank account. Therefore, our conclusion recorded for AY 2018-19 in the earlier part of this order (supra), would apply mutatis mutandis to the ground no. 3. 3.1 and 4 of assessee for assessment year 2019-20. Consequently, we uphold the conclusion of the AO for AY 2019-20 wherein he made addition of Rs. 1,40,000/- to the income of the assessee u/s. 68 of 60

the Act and ordered to change higher rate u/s. 115BBE of the Act on the total amount of Rs. 12,20,000/-. Accordingly, the ground no. 3, 3.1 and 4 of the assessee for AY 2019-20 are also dismissed by upholding conclusion drawn by the AO and upheld by the Ld. CIT(A) in taxing the salary income at higher tax rate u/s. 115BBE of the Act.

Ground no. 5 & 6 of assessee for AY 2018-19

Commerce of assessee totalling to Rs. 12,40,000/-. Ld. Counsel also submitted that in response to notice of AO, the justification submitted by the assessee vide reply dated 26.11.2021 wherein she stated that the cash deposit was came from the opening cash in hand of Rs. 6,22,502/- on 1.4.2017 belong to proprietorship concern M/s Moonage Films account and assessee’s personal cash in hand of Rs. 2,07,698/- accumulated from the income received in cash. Ld. Counsel for the assessee submitted that reply and explanation of the assessee was dismissed by the AO without any justification only on the basis of his whims and fancies which is not sustainable. Ld. Counsel for the assessee submitted that AO has taken irrelevant and incorrect factual position for dismissing the contention of the assessee and therefore baseless addition made by the AO may kindly be deleted. Ld. Counsel for the assessee also contended that when the assessee is owing a concern / Moonage Films which has a different financial transactions then the factum of two separate cash in hand and cash books cannot be disbelieved.

9.1 Ld. Counsel for the assessee further submitted that the assessee has successfully demonstrated the source of cash deposit of Rs. 12.40 lacs to her bank account which has been dismissed by the authorities below without substantiating the mandatory requirement of section 68 of the Act, therefore, the addition may kindly be directed to be deleted.

9.2 Replying to the above, Sr. DR drawing our attention towards the orders of the authorities below particularly para no. 3.8 of the assessment order submitted that the assessee has furnished inaccurate particulars in the income tax returns as the cash in hand shown in the statement are different from the cash in hand shown in the income tax returns. Ld. Sr. DR submitted that assessee is a sole proprietor of M/s Moonage Films, therefore, how can be there two cash in hand for single PAN No. The Ld. Sr. DR vehemently pointed out that since the assessee has failed to reconcile the opening cash in hand vis-à-vis their income tax returns of assessee and assessee has not submitted any agreement and confirmation from the tenant from whom cash rent was received, therefore, explanation of assessee was rightly dismissed by the AO before making the addition. The Ld. Sr. DR finally submitted that AO and Ld. CIT(A) was quite correct and justified in holding that cash deposit of Rs. 12.40 lacs was unaccounted cash available with the assessee earned during the relevant financial period which was not declared in her income tax return, therefore, the same was rightly treated as unaccounted cash of credit u/s. 68 of the Act read with section 115BE of the Act.

9.3 Placing rejoinder to the above, Ld. Counsel submitted that when the assessee has explained the source of cash deposit which was from cash in hand, cash rental income and other sources, then the authorities below were not justified in making and confirming the addition in the hands of the assessee u/s. 68 of the 63

Act. Alternatively, Ld. Counsel for the assessee submitted that Ld. CIT(A) has erred in holding that the amount deposited in the bank account of the assessee is taxable u/s. 69A of the Act and thereafter computed the demand in accordance with rates specified under section 115BBE of the Act as amended by Taxation Laws (Second Amendment), Act, 2016.

9.4 On careful consideration of the above noted rival submissions, basis taken by the AO for making addition u/s. 68 r.w.s. 115BBE of the Act and conclusions drawn by the Ld. CIT(A) in para 4.2.11 and 4.2.12. First of all, we note that the said AO made the addition by mainly observing the following factual matrix:

“On perusal of ROI for AY 2017-18 and submissions dated 26.11.2021 furnsihed by the assessee, it is found that assessee has declared cash in hand Rs. 16,068/- on 31.3.2017 as asset in the balance sheet of her sole proprietorship firm, Moonage Films and the same amount has carried forward and declared in the financial of AY 2018-19 as opening cash in hand on 1.4.2017. Whereas as per reply dated 26.11.2021, assessee has declared cash in hand Rs. 622,502/- (personal account of Ruby Singh) on 1.4.2017. i) Assessee failed to furnish the accouting of cash in hand of Rs. 4,41,002/- (personal account of Ruby Singh) on 1.4.2017 as well as genuine source of cash in hand for personal account. The following accouting of assessee is not matched with accounting standard AS-1 and failed to true and fair disclosure. As the assesee has declared Rs. 16,098/- as cash in hand on 1.4.2017 in her financials, the same is allowed and other cash in hand is remained unverified and it is not regarded as genuine cash in hand of assessee.

ii) On perusal of bank account statement of assessee, and cash ledger of the assessee it cannto be concluded that the assessee has made payment of expenses from the bank account or in cash mode. iii) Assessee failed to furnish why cash withdrawals were continuously made from April, 2017 to March 2018 and why the purpose has not been realised. In absence of documentary evidences regarding the purpose of cash withdrawal, it is construed and firmly believed that cash withdrawal has been utilised and the cash deposit was not the part of cash withdrawal. Also, assessee received rent about of Rs. 45000/- in the year under consideration for the rent agreement carried out in FY 2016-17 but mode of received was ambiguous. Further, assessee failed to furnish the rent agreement carried out in FY 2017-18 but she claimed the rent received in cash in the year under consideration. Curiously, the attempt of assessee to make the cash deposit genuine in disguise of rent is not acceptable in absence of documentary evidence and the cash deposit is considered as unexplained and out of books. iv) The assessee has failed to explain the source of the cash deposit in the bank account. The personal cash ledger of the assessee cannot be relied due to discrepancies in the amounts. The same is also not disclosed in the return of income of the assessee. Further, financials of Ms. Ruby Singh were pursued and it was found that her operating revenue do not support such cash deposits/credits in her bank accounts.” 9.5 After noticing the above factual matrix, discernible from the records as well as documentary evidences and explanation of the assessee, the AO finally observed that the assessee has furnished inaccurate particulars in the income tax returns as cash in hand shown in the statement was different from the cash in hand shown in the income tax return. The AO further observed that the assessee is a sole proprietor of M/s Moonage Films, therefore, there cannot be two separate

cash in hand for single PAN No. He also concluded that assessee has failed to reconcile the opening cash in hand vis-a-vis their income tax return of the previous year and has failed to submit on record the rent agreement and confirmation of the tenant from whom cash rent was received. With these observations, the AO made the addition with the final conclusion that it is clearly evident that cash deposits of Rs. 12.40 lacs is unaccounted cash available with the assessee earned during the Financial Year 2017-18 pertaining to AY 2018-19 under consideration which was not declared in her return of income.

9.6 Further from the relevant part of the first appellate order, we note that Ld. CIT(A) after considering the written submissions of the assessee as well as stand taken by the AO for making addition upheld the addition. First of all, we note that this is a case where the regular books of accounts were being maintained by the appellant and all her bank accounts and assets have been included in those books of account and the same have been found manifested in the schedule of fixed assets, balance with bank etc. With these observations, the Ld. CIT(A) rightly dismissed contention of the assesee that cash and other deposits in the saving account in Standard Chartered Bank was not part of the books of accounts and hence, not covered u/s. 68 of the Act is incorrect and devoid of any merits. Ld. CIT(A) considered the monthwise cash flow statement of assessee filed before the AO and thereafter proceeded to adjudicate the grievance of assessee. 66

9.7 The main basis taken by the assessee before the authorities below to justify the source of cash deposits was personal cash in hand in the beginning of year, withdrawal from the bank accounts during the year and rental cash receipts during the relevant financial year. The explanation and justification submitted by the appellant was examined and verified by the Ld. CIT(A) on the touch stone of observations made by the AO in the assessment order. Ld. CIT(A) after appreciating and evaluating the explanation and stand of assesee recorded a categorical finding that the explanation submitted by the appellant was not found to be acceptable as in the month of June, 2017, the appellant deposited amount of Rs. 8 lacs whereas the prior withdrawal from the bank were only Rs. 6,36,800/-. He also observed that the withdrawals from the current bank account were being made for certain purpose of business and not for only to be re-deposited in the bank. It was further observed by the Ld. CIT(A) that the withdrawal have been made in the current account or saving account almost every month and were allegedly redeposited subsequently in the months of June, 2017 and November, 2017, but he found himself unable to understand as to why the appellant has been making withdrawal from the bank accounts almost every month and depositing the cash in bank accounts after sometime.

9.8 The Ld. CIT(A) after deeply evaluating the facts and circumstances under which the assessee withdrew the amount and deposited, rightly held that the 67

withdrawal could be made after exhausting or spending the existing cash in hand and therefore the cash withdrew every month cannot be considered to be available for redepositing in the bank. Ld. CIT(A) also evaluated the explanation of the assessee that the withdrawals of Rs. 6 lacs in five instalments during July, August, September and October, 2017 were made for certain utilisation for business purposes and not for accumulating the same for redepositing in the bank in the month of November, 2017. Ld. CIT(A) drawn the conclusion against the assessee by rightly observing that the arguments submitted by the appellant that these amounts were withdrawn from bank for money given to contractors for arranging the people and equipments for shoot and remote places were cash payment are to be made to labour, pony owners and other local contractual artists etc., but due to certain reasons viz. whether political or local condition the shoot had to abandon and the money had to re- deposit in the bank of assessee was also not found to be convincing in the absence of other supporting evidence. Ld. CIT(A) thus rightly concluded that withdrawal from current and saving accounts have been made and the amounts must have been utilised for business and other purposes and therefore, the same were not available for redepositing the same in the bank account and Ld. CIT(A) finally concluded that the source of cash deposit of Rs. 12,40,000/- in the bank remains unexplained and upheld the addition made by the AO u/s. 68 read with section 115BBE of the Act. In view of forgoing evaluation and analysis of

orders of the authorities below, we are unable to see any ambiguity, perversity or any valid reason to interfere with the conclusion drawn by the AO as well the findings recorded by the Ld. CIT(A), hence, we uphold the same. Accordingly, the ground no. 5 of assessee’s appeal for assessment year 2018-19 is dismissed.

9.9 It is also pertinent to mention that Ld. Counsel for the assessee in ground No. 6 has raised an alternative ground that Ld. CIT(A) was not correct and justified in upholding the addition on account of deposit in the bank account u/s. 69A of the Act and in directing the AO to tax the same at higher rate of tax u/s. 115BBE of the Act. On consideration of the said alternative ground of assessee from the orders of the authorities below, we are unable to see any such addition neither from the assessment order nor from the first appellate order. Therefore, the said alternative ground of the assessee is baseless being not discernible from the orders of the authorities below. It is also relevant to mention that the provision of section 115BBE of the Act charging the higher rate of tax is applicable from AY 2017-18 onwards, and the appeal in hand is pertaining to assessment year 2018-19, wherein addition u/s. 68 of the Act has been made to the income of the assessee, therefore, the authorities below are eligible to invoke the said provision as per mandate and facts & circumstances of the issue. Therefore, ground no. 6 of assessee being misconceived and based on non-existing facts is also dismissed.

Ground no. 5 & 6 of assessee for AY 2019-20

conjectures which is not justified and sustainable as per mandate of section 68 of the Act and therefore, the same may kindly be deleted. Ld. Counsel for the assessee vehemently pointed out that the AO was not correct and justified in dismissing the self speaking explanation and sustainable documentary evidence filed by the assessee explaining the source of impugned cash deposit in the bank account only on his whims and fancies, therefore, the impugned addition may kindly be deleted by allowing the grounds of appeal.

10.1 Replying to the above, Sr. DR supported the assessment order as well as first appellate order and submitted that assessee was allowed due opportunity of hearing during assessment and first appellate proceedings, but the assessee had failed to substantiate the source of cash deposit of Rs. 20 lacs to her bank account. Therefore, the AO was quite correct and justified in making the addition u/s 68 of the Act read with section 115BBE of the Act and Ld. CIT(A) rightly upheld the same after proper evaluation of factual matrix of the issue and observations of the AO.

10.2 Placing rejoinder to the above, Ld. Counsel of the assessee submitted that there was no positive adverse material against the assessee disbelieving the explanation of the assessee i.e. impugned cash deposits in the bank account of the assessee which was accrued to the assessee out of opening cash in hand in the concern M/s Moonage Films as well as personal cash in hand available with the 71

assessee, cash rental income and withdrawal from the bank, therefore, the authorities below have kept aside the said sustainable and glaring explanation supported by the documentary evidence such as bank statement, cash flow statement etc., therefore, the orders of the authorities below may kindly be set aside and AO may kindly be directed to delete the addition in toto.

10.3 On careful consideration of the above submissions, first of all, from the relevant part of the first appellate order, we note that the action of the AO was triggered when he found that the assessee was running a sole proprietorship concern namely M/s Moonage Films and found that the assessee was maintaining ‘four’ bank accounts. The AO from the bank statement of assessee and her firm noted that during the financial year 2018-19 pertaining to present assessment year 2019-20, assessee had deposited total cash of Rs. 20 lacs in the said four banks accounts listed in para 3.1 of assessment order. The AO issued show cause notice to the assessee and in response to the same vide reply dated 26.11.2021, the assessee stated that the cash deposits were made for opening cash in hand as on 01.04.2018 belonging to Monnage Films & assessee’s personal account and cash withdrawals from the said account as well as cash rental income of Rs. 3,60,000/- received during the financial year 2018-19 from the property situated at 4D/14, Old Rajinder Nagar, new Delhi. The AO, after evaluating the explanation and documentary evidence filed by the assessee, observed following factual finding : 72

i) On perusal of ROI for AY 2018-19 and submissions dated 26.11.2021 furnished by the assessee, it is found that assessee has declared cash in hand Rs. 207,698/- on 31.3.2018 as asset in the balance sheet of her sole proprietorship firm, Moonage Films and the same amount has carried forward and declared in the financial of AY 2019-20 as opening cash in hand on 1.4.2018. Whereas as per reply dated 26.11.2021, assessee has declared cash in hand Rs. 622,502/- (personal a/c of Ruby Singh) on 1.4.2018. ii) The sole proprietorship firm and the person who has control on the firm is treated as one entity and the financial credential can never be different. Further, assessee failed to furnish the accouting of cash in hand of Rs. 622,502/- (personal a/c of Ruby Singh) on 1.4.2018 as well as genuine source of cash in hand for personal account. The following accounting of assessee is not matched with accounting standard of AS-1. As the assessee has declared Rs. 207,698/- as cash in hand on 1.4.2018 in her financials, the same is allowed and other cash in hand remains unverified and it is not regarded as genuine cash in hand of assessee. iii) The maximum opening cash in hand available with assessee in FY 2018-19 relevant to assessment year 2019-20 is Rs. 207,698/- as declared in financial. iv) On perusals of bank account statement of assessee, and cash ledger of the assessee it cannot be concluded that the assessee has made payment of expenses from the bank account or in cash mode. v) The opening cash in hand with assesse was Rs. 207,698/- so how can assessee be able to deposit Rs. 6,50,000 in the month of September which also does not correlate with the personal cash book of the assessee. Further, assessee failed to furnish why cash withdrawals were continuously made from April to August. In absence of documentary evidences regarding the purpose of cash withdrawals, it is construed and firmly believed that cash withdrawal has been utilized and the case deposit was not the part of cash withdrawal. Also, assessee also failed to furnish the details of month wise rental income received in cash. vi) Assessee has made cash deposit of Rs. 12,40,000/- from November, 2018 to February, 2019 whereas the cash withdrawal was only Rs. 40,000/- and no source of cash income has been seen of assessee for 73

the same period. From the cash book submitted by the assessee, it cannot be concluded as how assessee has incurred her personal and other household expenses and also the same does not endorse the cash withdrawal and deposit pattern. 10.3.1 After evaluation of explanation and documentary evidence of the assesse, the AO drawn conclusions that assessee has furnished inaccurate particulars in her income tax return as cash in hand shown in the statement was found different from the cash in hand shown in the income tax return. The AO also noted that assessee and her proprietorship concern M/s Monnage Films are one and hence, there cannot be a separate cash in hand for assesse and her firm on the single PAN. The AO also alleged that the assessee had failed to reconcile the opening cash in hand vis-a-vis from income tax return from previous year and her submissions. He also alleged that the assessee has not submitted on record the confirmation of the tenant from her cash rent received. The AO also noted that assessee was not running business to generate huge cash of Rs. 20 lacs and made addition in the hands of the assessee u/s. 68 of the Act read with section 115BBE of the Act by observing that the cash deposit to the bank account of the assessee is nothing but unaccounted cash of the assessee which was not declared as income by the assessee and thus the same remain unexplained and unaccounted.

10.3.2 The assessee carried the matter before the Ld. CIT(A). The Ld. CIT(A) allowed opportunity of hearing to the assessee and taken on record the written

synopsis / submissions of the assessee, which has also been reproduced at page 3 to 4 of the first appellate order, upheld the addition with the following observations and findings:-

“4.2.6 During the course of assessment proceedings, the Assessing Officer has found that the appellant has deposited cash amounting to Rs.20,00,000/- in her bank accounts. Thus a total amount of cash of Rs20,00,000/- was deposited in appellant's bank account during the year. The Assessing Officer did not find the explanation submitted by the appellant that the deposits were sourced from the rental income and cash withdrawals from the bank satisfactory and made an addition of Rs.20,00,000/- as unaccounted cash available with the appellant. An addition of Rs. 20,00,000/- was made as unaccounted cash of the appellant which was not declared as income by the appellant and therefore, was treated as unaccounted cash credits us 68 r.w. 115BBE of the Income Tax Act. 4.2.7 On perusal of the return of income it is noted that the Part A-BS heading mentions "Balance sheet as on 31* day of March 2019 OF THE PROPRITORY BUISNESS OR PROFESSION (fill items below in case where regular books of accounts are maintained, otherwise fill item 6)". Following salient points were noted on perusal of this part: 1. Fixed assets a. Gross : Block 12793103 3. Current assets, Loans & Advances a. Current assets iii. Cash and Bank balances A. Cash in hand 68698 B. Balance with banks 10259265

4.2.8 On analysis of the data above, the following has been observed: (i) This data is to be filled up for proprietary business or profession where the regular books of accounts are maintained. Therefore, the appellant is maintaining regular books of accounts. (ii) The balance with banks includes the balances of the Oriental Bank of Commerce, HDFC Bank and Standard Chartered Bank and not just the Oriental Bank of Commerce as conveyed by the appellant.

(iii) Therefore, the return of income which have been verified by the appellant clearly indicates that all the Bank accounts, where the cash was deposited are a part of the regular books of account of the appellant. (iv) The cash deposited in the bank accounts has therefore, found manifestation in the regular books of accounts maintained by the appellant. (v) Further, in the case of the appeal in earlier years also it is noted that the receipt in Standard Chartered Bank and other bank accounts in several cases also forms the part of proprietorship business of Moonage Films. There are several receipts which have been received in Standard Chartered Bank and other bank accounts which belongs to the proprietorship business of appellant. Therefore, it would be inappropriate to accept that entries in all the bank accounts are not recorded in the books of accounts of the appellant. 4.2.9 This is a case where the regular books of accounts are being maintained by the appellant. On the basis of the observations above it is proved that the appellant is maintained regular books of accounts and all her bank accounts, assets have been included in those books of accounts and the same have found manifestation in fixed assets, balance with bank etc. Therefore, the appellant's contention during the appellate proceedings that the cash and other deposits in the saving accounts in Standard Chartered Bank was not paper book of account and hence not covered u/s 68 of the Income Tax Act is incorrect and devoid of any merit. The return of income duly verified by the appellant and filed in response to notice u/s 148 is the very basis of assessment and that highlights that the appellant is maintaining regular books of accounts and which contains the deposits in all the bank accounts of the appellant. Accordingly, the argument of the appellant that the cash and other deposits in saving account in Standard Chartered Bank and other bank accounts was not a part of books of account and hence not covered us 68 of Income Tax Act is devoid of merit and therefore rejected. 4.2.10 The month-wise cash flow statement depicting cash deposited and withdrawal from the bank as submitted by the appellant during the course of appellate proceedings is as under:

4.2.11 The Assessing Officer made the addition of an amount of Rs. 20,00,000/- as unaccounted cash of the appellant which was not disclosed as income. The cash deposits amounting to Rs. 20,00,000/- were added to the income of the appellant as unaccounted cash credits u/s 68 of the Income Tax Act. The appellant tried to justify the source of this cash as the personal cash in hand of the appellant at the beginning of the year and the rental receipts in cash during the year and the cash withdrawals from the bank. The justification submitted by the appellant does not appear to be acceptable in view of the following arguments: 1. The opening cash in hand figure of personal account of Ms. Ruby Singh is not supported by any documentary evidence. Further, most of the personal cash, if there was any have already been exhausted in the property and related transactions in the AY 2013-14 and subsequently in household expenses. There is no documentary evidence that any personal cash was available with the appellant for deposition in bank account during the year. 2. As per the return of income filed by the appellant in response to notice u/s 148 of Income Tax Act the appellant disclosed both the current account in Oriental Bank of Commerce and saving account in Standard Chartered bank, while disclosing their cash at bank. Since all the accounts of the appellant were disclosed which includes both business and personal accounts it can be safely presumed that the cash in hand disclosed in the return of income also includes both the business and the personal cash. Further, for the year under consideration the opening cash in hand as per the return of income is grossly insufficient for such cash deposits in the bank.

projects for which these withdrawals have been made. The arguments submitted by the appellant that when cash is needed for some project and due to certain eventualities like bad weather, non-availability of permission at certain placed to shoot the serial or political disturbances, as the shoot was either in Jammu & Kashmir and North Eastern state, and then the cash withdrawals was re deposited in the bank if the shoot was cancelled is also does not appear to be convincing. Further, no evidence of payments to contractors or anyone else in cash and its subsequent return has been filed during the course of proceedings. Regular withdrawals form current and saving accounts have been made and the amounts must have been utilised for business or other purposes and therefore the same were not available for depositing in bank account. Therefore appellant's explanation that the amounts withdrew form bank were re-deposited in the bank is prima facie incorrect and is devoid of merit. 4.2.13 During the year, there are no business receipts in the appellant's proprietorship firm and indirect expense amounting to Rs. 3,21,459/- have been booked resulting in a net loss of Rs.3,21,459/-. The Assessing Officer clearly pointed out that on perusal of bank account statement and the cash ledger of the appellant, it cannot be concluded that the appellant has made payment of expenses from the bank account or in cash. As per the cash book submitted by the appellant there are cash drawings amounting to Rs. 20,000/- only. It is difficult to imagine as how the appellant has incurred her household expenses as there are hardly any cash drawings. Rental income, if any, if received in cash was only sufficient for the household expenses of the appellant. 4.2.14 In view of the above, I am of the considered opinion that the source of cash deposited in the bank account remains unexplained and there is no reason to interfere with the order of the Assessing Officer. The Assessing Officer has correctly held that the cash amounting to Rs.20,00,000/- is unaccounted cash available with the appellant earned during F.Y. under consideration and not offered for taxation in her Income Tax Return. Accordingly, the addition of cash deposit made to the total income of the appellant as unexplained cash credit u/s 68 r.w.s 115BBE of Income Tax Act is hereby confirmed. However, there is a discrepancy in the figure of addition of cash deposit (Rs. 20,00,000/-) and the details of cash deposit (Rs. 18,91,000/-) submitted during the assessment and appellate proceedings. The Assessing Officer can carry out necessary verification and the amount of addition may be corrected, if required after verification from records. Accordingly, Ground Nos. 2, 3, 4 & 5 of appeal are dismissed.

10.4 On careful consideration of the rival submissions, action of the AO and conclusions recorded by the Ld. CIT(A) while upholding the addition, we note that Ld. CIT(A) firstly considered the allegations and the basis taken by the AO for making the addition and thereafter reproduced the monthwise cash flow statement showing cash deposit and withdrawal from the bank accounts of the assessee which was submitted by the assessee before the AO during the course of appellate proceedings. Thereafter, the Ld. CIT(A) noted that the opening cash in hand of personal account of Ms. Ruby Singh was not supported by the documentary evidence and if there was any cash in hand the same was exhausted or spent in the property and related transactions in assessment year 2013-14 and household expenses incurred during the subsequent period. Ld. CIT(A) after considering the documentary evidence of the assessee concluded that no documentary evidence, supporting the cash flow statement, was available with the appellant for explaining the deposit in the bank account during the financial period 2018-19 (AY 2019-20) and said finding was clearly based on the right evaluation of facts and the circumstances of the case and cash flow statement filed by the assessee. Ld. CIT(A) also noted that as per statement of assessee recorded u/s. 131 of the Act by the DDIT ( Investigation), New Delhi, the assessee stated that all the payments were received through banking channels and no payment received in cash during the last 6 to 7 years, therefore, there was no possibility of availability of cash with

the appellant which could have been deposited in the bank account of the assessee during relevant financial year.

10.5 On being asked by the bench, the ld. Counsel for the assessee could not demolish the observations of the authorities below that as per return of income filed by the assessee for AY 2019-20, there was no business income during the period under consideration. The assessee also failed to justify the reason for depositing cash to her bank account during the year and making regular cash deposits in the bank out of personal cash in hand, if any. Ld. CIT(A) thus rightly observed that despite request, the assessee did not submit the renal agreement also taking into account explanation of the assesee that cash available out of rental income, if any, was only sufficient to meet the day to day expenditure of appellant for which no cash drawings have been mentioned even in the personal cash account. Ld. CIT(A) also evaluated the pattern of cash deposits and withdrawals by the assessee from her bank accounts and thereafter concluded that it is expected that withdrawal can be made after the exhausting or spending the existing cash in hand and therefore, the cash withdrew every month cannot be said to be available with the assessee for redepositing in her bank account. Ld. CIT(A) thus rightly dismissed the explanation of the assessee regarding withdrawal of cash for the purpose of shoot and on the spot cash payments as there was no evidence establishing that the cash was needed for some projects and due to certain 81

eventualities like bad weather, non-availability of permission at certain placed to shoot the serial or political disturbances, as the shoot was either in Jammu and Kashmir and North Eastern state, and then the cash withdrawal was redeposited in the bank on the cancellation of shoot. Ld. CIT(A) upheld the addition by finally observing the source of cash deposit in the bank account remained unexplained and hence, the ld. CIT(A) was quite correct and justified in upholding the addition made by the AO, hence, we are unable to see any ambiguity, perversity or any valid reason to interfere with the findings recorded by the Ld. CIT(A) and AO, hence, we uphold the same. Accordingly, the ground no. 5 and 6 of the assessee’s appeal for assessment year 2019-20 being devoid of merits are dismissed.

Order pronounced on 29/09/2023. Sd/- Sd/- (M. BALAGANESH) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Copy forwarded to: - 1. Appellant. 2. Respondent. 3. CIT 4. CIT(A) 5. DR, ITAT Assistant Registrar 82