2016 (6) TMI 211

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.... (with UCO Bank, Madame Cama Road Branch, Mumbai, Saving Bank account 10390). In explanation as to its source, the same was stated as withdrawals from the same bank account. A total of Rs. 25 lacs had been withdrawn during the year from the said bank account, of which Rs. 16.65 lacs had been deposited back, with a part of the balance of Rs. 8.35 lacs, i.e., Rs. 6.10 lacs, being absorbed for personal/household expenses. There was, as such, no reason to consider the same as unexplained as to its' source. Toward the reason for such heavy cash withdrawal, it was submitted that as he was not keeping well, money had been withdrawn and kept for any emergency requirement. As regards the reason for its' deposit back, it was submitted that as he had recovered from illness, the money was deposited back in December, 2004. With regard to the withdrawals for personal/house-hold purposes, the same were stated to be in the range of Rs. 40,000/- to Rs. 50,000/- p.m., including the expenditure for general treatment and medicines. The said explanation did not find favour with the Revenue. The disease for which the assessee had been operated upon in December, 2005, i.e., 'BIL Varicose Veins', was, as ....

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....rawals are made for specific requirements. For arriving at a finding whether the assessee had made those withdrawals for emergency medical requirements or for making some undisclosed investments, the revenue authorities are entitled to look into the surrounding circumstances and Courts and Tribunals are required to evaluate the material placed before them after applying the test of human probabilities as held by Hon'ble Supreme Court in case of Morvi Industries (82 ITR 835). Considering the changing stand of the assessee and the nature of illness and the entirety of facts and circumstances, we agree that the conclusion drawn by the lower authorities that the withdrawals of Rs. 10 lacs and Rs. 6.65 lacs by the assessee had been utilized for undisclosed purposes and were not available for re-depositing the same in December, 2004. For the same reasons we also find reasonable the decision of lower authorities in rejecting the claim of the assessee that he was having opening cash balance of Rs. 3,75,000/- on 01/04/2004 out of which deposits of Rs. 2,50,000/- have been made on 30/07/2004. In case the assessee was having opening cash balance of Rs. 3,75,000/-, there were no reasons fo....

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....puted facts of the case - the cash deposit in the assessee's bank account, i.e., is incomplete, is itself a tacit admission of the said provision, which mandates for the deeming of the impugned deposit as income where not satisfactorily explained as to its source, being applicable. Further, as clarified by the Hon'ble Apex Court in L. Hazari Mal Kuthiala vs. ITO [1961] 41 ITR 12 (SC), the exercise of power by an authority is referable to a provision that validates it rather than one which makes it unworkable or invalid. The non-mention, or reference to a wrong, section/provision would thus not operate to invalidate otherwise valid proceedings or exercise of power - the assessee being called upon to explain the source of the impugned cash deposits. Rather, in our clear view, the mention of section 68, which is superfluous, even if regarded as a commission, is saved by the provision of section 292B of the Act. 3.2 The basis for the levy and confirmation of penalty by the Revenue is that no plausible explanation for cash retention (for 4 ½ months, i.e., from mid August to end December, 2004) and, in turn, for the cash deposit/s in the assessee's bank account, admittedly by t....

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....o the opening balance cannot be verified or opined upon. In fact, the cash utilized for personal/household purposes would also have to be factored there-into. Why, we wonder the assessee could not furnish, similarly, the said details for the immediately preceding year as well. Continuing further, the cash utilized for personal/household purposes for the months of April to July 2004 is admittedly at Rs. 1.90 lacs (PB pgs. 1 - 2), which we accept in-as-much as the AO has not made any addition on account of low or inadequate household/personal withdrawals. This would, accordingly, consume almost the entire withdrawal of Rs. 2.15 lacs made from during this period. In fact, another Rs. 40,000/- to Rs. 50,000/- would be required toward such monthly expenses for the month of August 2004, being generally drawn at the beginning of the month, so that the surplus of Rs. 0.25 lacs (2.15 lacs -1.90 lacs) can be regarded as toward the same. The explanation of the withdrawals being the source of the deposit would thus not hold for Rs. 2.50 lacs deposited in bank account on 30.7.2004. The explanation offered (qua this deposit) is not valid; rather, cannot be under the circumstances regarded as an ....

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....ger Rs. 3,000/- (refer pg. 4 of the assessment order), so that funds of the firm stand, as it appears, diverted, resulting in either loss of business or met by incurring borrowing (at a cost). Continuing further, even if such huge expenditure is contemplated, of which there is no evidence - why we wonder the same could not be adequately substantiated or in fact even met through the banking channel, viz. bankers' cheque or demand draft, being only a matter of a couple of hours, if not a few minutes. The assessee is under regular medical treatment, so that a medical emergency is almost ruled out inas- much as a serious condition would not, normally speaking, arise suddenly, and where so expected, would stand to be documented. The assessee, in any case, has a cashless insurance policy, as clearly stated in its' orders by the Revenue, as well as emphasized by the ld. Departmental Representative (DR). No disease, not covered by the insurance policy contracted, has been brought on record or even to our notice. Even the assessee's case qua medical treatment is sans any details, which, where so, would be fully evidenced in-as-much the treatment would be well-documented and from a credible ....

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.... expenditure on which have not been furnished by him. This is a very important and relevant fact. The same is not disputed; why, would have rather originated from the assessee himself and, further, has been taken into account by the tribunal in deciding the assessee's case on quantum. The same in fact stands corroborated by documents furnished in respect of the assessee's operation (for Varicose Veins) in December, 2005, which states of his medical condition (problem) having a history of a year (refer para 8 of assessment order and para 2.3 of impugned order). The credibility of the information is, in any case, not in doubt. If that be so, it becomes incumbent both for the assessee to reveal the truth of the matter. The Revenue is also required to satisfy itself with regard to the veracity or the truth of the assessee's explanation. What was the treatment undertaken by the assessee in August, 2004, which coincides with the date/s of the first withdrawal/s; the balance withdrawal (Rs.2.85 lacs) being in fact for minor amounts. Was the assessee hospitalized (implying an indoor treatment), or underwent any medical treatment during this period, i.e., August to December, 2004, whereat (....