TaxTMI 
TaxTMI 
2014 (11) TMI 761
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....s no mention in the letters that the NRI brother has given cash to the assessee and despite explaining the source of deposits it was not appreciated in the correct perspective. 3. Though notices were sent to the assessee from time to time by Registered post, none appeared on behalf of the assessee. We, therefore, proceed to dispose of these appeals exparte, qua assessee. 4. We have heard the learned D.R., who relied upon the orders passed by Tax Authorities. We have also carefully gone through the record. 5. As can be seen from the impugned orders, the Tax Authorities have noticed cash deposits in the HDFC Bank Account, Crawford Market Branch, Mumbai and when asked about the nature and source of acquisition of the cash it was stated that....
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....ke of ready reference we extract para 3.3.1 to 3.3.5 of the order passed by the learned CIT(A) for AY 2007-08, which is self-explanatory and highlights that assessee's explanation is vague: - "3.3.1 I have considered the facts of the case and the submissions made by the assessee. During the appellate proceedings, the Ld. AR has furnished a date wise summary of the cash withdrawn and cash deposited in the HDFC Bank account in question which is enclosed as Annexure-"A" with this appellate order. From the said Annexure-A, it is seen that the total cash withdrawn during the period 01/04/2006 to 29/03/2007 (the entire financial year) is Rs, 8,56,600/- whereas the total cash deposited in the bank accounts is Rs. 15,39,000/-. The assessee has....
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....is not understandable as to why he would withdraw such small amounts when they were not required for any purpose. On 16/04/2006 the assessee had cash-in-hand of Rs. 19,90,020/-. Out of this, he deposited Rs. 1,00,000/- on 24/04/2006 and again deposited Rs. 50,000/- each twice on 25/04/2006. It is not understandable as to why, the assessee would deposit small amounts in the bank account in stages and on different dates. On 27/04/2006, the assessee had cash-in-hand of Rs. 17,90,020/-, but he still withdrew a small amount of Rs. 3,000/- on 27/04/2006. Again an amount of Rs. 2,000/- was withdrawn on the same date and an amount of Rs. 4,000/- was withdrawn on 01/05/2006. Thereafter, amounts of Rs. 50,000/- was deposited on 03/05/2006 and two amo....
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....ven a general statement that they have taken temporary loan of Rs. 10,000/- to 15,000/- frequently from the assessee. When the loans were taken and what was the amount of loan taken on each occasion has neither been stated by the assessee nor by the so called recipients of the alleged loan. The findings of the Assessing Officer in respect of these persons is, in my opinion, justified since these confirmations or statements made by the so called loan recipients are only an attempt by the assessee to somehow try and explain the source of the cash deposited in the bank account which had not been disclosed to the Income Tax Department. 3.3.2 There is also abnormality with respect to the deposit of cash on various dates which is evident from th....
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.... after the cash deposits. Further, there is no correlation in amounts of deposits with any of the withdrawals made. Mere withdrawals made on earlier dates does not prove the physical availability of cash in hand unless the assessee is able to justify that such cash withdrawn was available with him and not spent any where for other purposes. Under such circumstances, it is amply clear that the appellant was not in physical possession of the cash with him which has been withdrawn by him on earlier dates. In view of the aforesaid reasons, the contention of the assessee that it had cash-in-hand of Rs. 19,11,020/- as on 01/04/2006 and that the cash was deposited out of the cash-in-hand available with him, or that loans given to friends and relat....
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....upreme Court has observed that the taxing authorities are not required to put on blinkers while looking at the documents produced before them. They are entitled to look into the surrounding circumstances to find out the reality of the recitals made. The proceedings under the Income Tax Act are civil proceedings and the liability therefore can be fastened on the basis of circumstantial evidence also, as held in the case Smt Sumati Dayal 214 ITR 801(SC). In case of J S Parker 94 ITR 616 (Bom) it has been held that "the tax liability under the Income tax Act is of civil nature. To fasten a tax payer with such a liability, it is not necessary that the evidence should be in the nature of "beyond doubt" as is required to fix a criminal liability.....