TaxTMI 
TaxTMI 
2017 (12) TMI 1136
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.... made on account of cash found deposited in the bank which remained unexplained. 4. The facts leading to the present appeals are that during assessment proceedings the Assessing Officer observed that there was cash deposits of Rs. 89,57,700/- in HDFC bank account of the assessee. Despite various opportunities the assessee did not provide any details or explanations regarding these cash deposits. The Assessing Officer, therefore, came to the conclusion that these deposits were actually income of the assessee from undisclosed sources and made addition of the same i.e. Rs. 89,57,700/- to the income of the assessee. 5. Before the Ld.CIT(Appeals) the assessee contended that he was a property dealer and agriculturists and deposits could be attributed to withdrawals made since the cash was being rotated in the bank. The assessee's reply was forwarded to the Assessing Officer for his comments who rejected the assessee's contentions holding them to be an after thought and concocted story since as per the AO the huge quantum of deposits could not be corroborated with the meagre returned income of the assessee. The assessee in response reiterated his earlier contention. The Ld.CIT(Appea....
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....nt stage. 2. Further, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax(Appeals), Karnal has also erred in law in considering total cash deposits in bank account at Rs. 89,97,700/- as total turnover of the business and further estimating the profit @ 15% and investment in business @ 10% of total cash deposits in bank account. 3. The appellant craves leave to add or amend the grounds of appeal before the appeal is heard or disposed off." 8. During the course of hearing before us, the Ld. counsel for assessee raised two fold arguments; i) that the entire deposits could not be treated as the turnover of the assessee and allowance for deposits made out of the following was to be given; a) opening balance of cash in hand = Rs. 4,40,000/-; b) sale of "bada" land = Rs. 4,50,000/-; c) cash from KCC = Rs. 2,50,000/-; d) deposits from business income and agricultural income of the assessee returned and lastly on account of cash withdrawals; ii) the Ld. counsel for assessee also stated that even if the entire deposits were treated as business turnover of the assessee and addition mad....
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....hand available from accumulated savings. The Ld.Counsel for the assessee has given no figures of the earnings and expenses of the assessee in the past to substantiate his contention. At the same time, it cannot be denied that some amount can be said to be in the form of cash in hand available with the assessee. Considering the income returned by the assessee for the impugned year amounting at Rs. 1,58,660/- plus agricultural income of Rs. 98600/- and considering the fact that the assessee is in the property dealing business the turnover from which has been estimated at Rs. 89,97,110/- we consider the amount of Rs. 50,000/- to be reasonable amount of cash in hand available with the assessee as at the beginning of the year and direct the Assessing Officer to give credit of the same on account of cash deposited in the bank during the year. Therefore, to the extent of Rs. 3,90,000/- (Rs.3,40,000 + Rs. 50,000) we hold the source of cash deposited can be attributed to the opening cash in hand available with the assessee. 12. Thereafter the Ld. counsel for assessee has attributed the cash deposited in the bank to the extent of Rs. 4,50,000/- to the sale of bada. The Ld. counsel for ass....
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....sel for assessee stated that the cash deposited in the bank should be attributed to this income earned by the assessee also. 17. On going through the order of the Assessing Officer and the Ld.CIT(Appeals), we find that no observation in this regard has been made by either of them. Since it is not denied that the assessee had earned income of approximately Rs. 2.5 lacs from the aforesaid source having returned the same in his return of income, some amount of cash deposited in the bank should be attributed to the same also after taking into consideration the expenses incurred in the normal course by the assessee. We consider an amount of Rs. 50,000/- to be reasonable enough to be attributed to the said source of income of the assessee, the balance being attributed to have been spent for his daily needs. 18. In effect we hold that out of the amount of Rs. 89,57,700/- of cash deposited in the bank, the source of deposits of the following amount stands explained as follows: Rs.3,40,000/- Opening cash in hand Rs.2,50,000/- withdrawal from KCC Rs.50,000/- Own Returned Income 19. The balance amount of Rs. 83,17,700/- (Rs.89,157,700-Rs.6,40,000) we hold is to be a....