TaxTMI 
TaxTMI 
2016 (6) TMI 211
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....bai, 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 A total of Rs. 25 lacs had been withdrawn during the year from the said bank account, of which Rs. 16.65 lacs had been deposited back, with a part of the balance of Rs. 8.35 lacs, i.e., Rs. 6.10 lacs,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 Toward the reason for such heavy cash withdrawal, it was submitted that as he was not keeping well, money had been withdrawn and kept for any emergency requirement.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 per the diagnosis, a year old, and not since ....
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....ing 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 for making regular cash withdrawals in subsequent mont....
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.... 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 the assessee himself, has been furnished by him, much less subs....
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....ing 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 explanation at all. The penalty in respect of the addition to this extent thus stands rightly levied, and is accordingly confirmed. 3.4 We next consider the second block of withdrawals (for Rs. 19.50 lacs), i.e., beginning August 18, 2004, up to 09.11.2004. T....
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.... 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 source. The question however that arises is: Is it necessary for the assessee to disclose the purpose of his withdrawals to the Revenue where he claims the same has not been consumed and, further, considering that the period of retention is from 4 to 5 months. ....
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....'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 (Dec.,2004), the cash is deposited in bank. What was the cost of such treatment or the expenditure involved, even as noted by the tribunal. This fact, which agrees with the assessee's explanation of the cash deposited representing the unutilized sum of the withdrawal....