2017 (6) TMI 175 - AT - Income Tax

Tribunal decisions on cash deposits, bank accounts, and undisclosed income

Chirag Jayant Mehta, And Snehal J. Mehta Versus ACIT-12 (3), Mumbai, And Vice-Versa

The Tribunal allowed the appeal of the assessee regarding the addition of cash deposits in a Standard Chartered Bank, recognizing the explanation ... Income from undisclosed sources under the head ‘income from other sources’ - Held that:- There is uncontroverted finding that the assessee furnished the cash summary and the assessee withdrew ₹ 1,85,82,000/- from the said bank up to the end of Financial Year relevant to Assessment Year 2008-09 and the amount of ₹ 10 lakh from M/s Trance Ocean Agencies, where the assessee is a partner. The cash was withdrawn at regular interval as the assessee was to purchase agricultural land. The Ld. Commissioner of Income Tax (Appeal) has also considered the observation made in the assessment order and the submissions made by the assessee and thereafter deleted the addition of ₹ 99,32,000/- in respect of bank Account No.23110165033 in the Standard Chartered Bank. This account was jointly maintained with his brother Shri Snehal J. Mehta, thus, considering the totality of facts and the circumstances mentioned in the impugned order and also narrated before us, we find no infirmity in the conclusion drawn by the Ld. Commissioner of Income Tax (Appeal). Cash deposited in the Standard Chartered Bank - addition on account of alleged undisclosed interest income - Held that:- We deem it appropriate to examine the factual matrix whether the assessee, during the relevant period, in fact, withdrew the amounts and if it was withdrawn whether it was used for any other purposes. This aspect has not been examined by the Department. The assessee is directed to examine the factual matrix and after providing due opportunity of being heard decide afresh in accordance with law. Issues Involved:1. Addition of Rs. 1,50,08,500/- in respect of cash deposit in Standard Chartered Bank.2. Deletion of addition of Rs. 99,32,000/- in respect of a joint bank account.3. Ex-parte order for Assessment Year 2009-10 confirming addition of Rs. 64,41,000/- in respect of cash deposited.4. Addition of Rs. 30,212/- on account of alleged undisclosed interest income.Issue-wise Detailed Analysis:1. Addition of Rs. 1,50,08,500/- in respect of cash deposit in Standard Chartered Bank:The assessee contended that the cash deposited was previously withdrawn for purchasing land, a deal that did not materialize. The Assessing Officer (AO) argued that no corroborative evidence was provided to prove the source of cash. The Tribunal noted that the AO admitted the cash withdrawal but speculated it was for other purposes. The Tribunal emphasized that human probabilities apply to both sides and upheld that keeping cash unutilized is the decision of an individual. The Tribunal referenced the case of Mr. C. Vamsi Mohan Nandyal, where similar circumstances led to a partial acceptance of cash deposits as explained. Consequently, the Tribunal allowed the appeal of the assessee, recognizing the cash deposit as explained.2. Deletion of addition of Rs. 99,32,000/- in respect of a joint bank account:The Revenue appealed against the deletion of Rs. 99,32,000/- by the Commissioner of Income Tax (Appeal) [CIT(A)]. The Tribunal found that the assessee provided a cash summary showing withdrawals of Rs. 1,85,82,000/- and Rs. 10 lakh from M/s Trance Ocean Agencies. The CIT(A) deleted the addition based on these submissions. The Tribunal found no infirmity in the CIT(A)'s conclusion and dismissed the Revenue's appeal.3. Ex-parte order for Assessment Year 2009-10 confirming addition of Rs. 64,41,000/- in respect of cash deposited:The assessee argued that the cash deposited was withdrawn for a land purchase deal that did not materialize. The CIT(A) passed an ex-parte order due to the assessee's non-attendance. The Tribunal deemed it appropriate to remand the issue to the CIT(A) to adjudicate afresh, providing the assessee an opportunity to substantiate his claim. Thus, the appeal was allowed for statistical purposes.4. Addition of Rs. 30,212/- on account of alleged undisclosed interest income:This issue was deemed consequential. The Tribunal directed the AO to examine the factual matrix and decide afresh after providing due opportunity to the assessee. This ground was allowed for statistical purposes.Final Judgments:i. Appeal of the Revenue (ITA No.8548/Mum/2011) for Assessment Year 2008-09 is dismissed.ii. Appeal of the assessee (ITA NO.8871/Mum/2011) Assessment Year 2008-09 is allowed.iii. Appeal of the assessee (ITA No. 2230/Mum/2011) Assessment Year 2009-10 is allowed for statistical purposes.iv. Appeal of the assessee (ITA No. 2231/Mum/2011), Snehal Jayant Mehta, Assessment Year 2009-10 is allowed for statistical purposes.Order pronounced in the open court on 31st, May, 2017.