TaxTMI 
TaxTMI 
2018 (9) TMI 1746
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....ellant and no proper reason has been given for rejection of opening cash balance shown in the cash flow statement. 3. No addition can be made for the opening cash balance shown in the cash flow statement when the total cash found during the search has already been added to the income of the appellant in the year of search. 4. That the appellant reserves the right to add, alter or amend the grounds of appeal before the appeal is decided, with the permission of Honourable Bench. 3. The only effective ground in this appeal is against conformation of addition of Rs. 1 lakh. Facts in brief are that a search action was carried out by the revenue in the group of Shri Pushpendra Mishra. The premises of the assessee was also searched. The A.O. issued notice u/s 153A of the Income Tax Act, 1961 (hereinafter called as 'the Act'). In response thereto, the assessee stated that the return filed originally may be treated as the return filed in response to the notice u/s 153A of the Act. The A.O. thereafter, proceeded to make assessment u/s 153A r.w.s. 153(3) of the Act. The A.O. while framing the assessment did not accept the cash flow statement furnished by the assessee and procee....
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....l income of the assessee for the A.Y. 2004-05. Penalty proceedings u/s 271(1)(c) are also initiated for furnishing inaccurate particulars of the income for the A.Y. 2004-05. 8.1 On perusal of the cash flow statement submitted by the assessee it is found that the opening cash balance of Rs. 1,00,000/- as on 1.4.2003 gradually increased to Rs. 4,36,000/- as on 1.4.2004 which further increased to Rs. 4,15,000/- as on 1.4.2005 which increased to Rs. 5,00,000/- as on 31.3.2006 which further increased to Rs. 5,25,000/- as on 31.3.2007. The utilisation of the cash balance started taking place in F.Y. 2007-08 only. During this year cash of Rs. 3,15,000/- was paid to Akshya Shakti Shiksha Samanj Evam Kalyan Samiti on 3.11.2007. Besides this payments of Rs. 39,500/- and 30,000/- were made to Adunik Grih Nirman Samiti on 28.7.2007 and 17.3.2008 respectively. This reduced the cash balance as on 1.4.2008 to Rs. 1,27,118/-. Finally, the closing balance as on 31.3.2010 was shown to be Rs. 30,508/-. 8.2. This cash flow statement of the assesee has to be seen in the light of the following facts:- 1. The assessee does not maintain its books of accounts or even details of day to day ex....
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....irman Samiti 8.4 Therefore, these amount represent unexplained investments by the assessee and the same are hereby added to the total income of the assessee for respective assessment years. A summary of the year wise addition made to the income of the assessee is as under: Assessment year Amount (in Rs.) 2007-08 73,988/- 2008-09 4,02,500/- 6. From the above finding of the assessing officer, it is clear that the same is more on presumption than on any incriminating material. It is undisputed fact that the assessee has been working in a Government department for a long period of time, therefore, it cannot be presumed that he was not having any cash on hand. In our view, Rs. 1 lakh as claimed by the assessee is reasonable as a cash on hand as on 1.4.2003. We hold accordingly. This ground of the assessee is allowed. 7. Now, we take up IT(SS)A No.183/Ind/2016 pertaining to the assessment year 2007-08. The assessee has raised following grounds of appeal: 1. That the learned CIT(A) has erred in law and on facts in confirming addition of Rs. 73,988/-. 2. That the addition confirmed by the learned CIT(A) as unexplained investment is not sup....
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....ntral Circle-Alwar ITA No.5341JP12012 A.Y(200B-09) and Shri Roop Bansal vis ACIT Central CirCle-Alwar ITA No. 7481JPI2012 A. Y(2008- 09),ITAT Jaipur. 3. Commissioner of Income Tax(Central)-III vis Kabul Chawala (2015)61 Taxmann.com 412(HC-Delhi) 4. Chetaben J Shah legal heir of jag dish chandra K.Shah vis The Income Tax officer, Ward 10(3)- Tax Appeal No. 143 7 of 2007 in the High Court Of Gujarat. The only reason given for making such addition as unexplained expenditure is that the cash flow statement furnished by the appellant is not acceptable by A.O. for following reasons- 1. The assessee does not maintain its books of accounts or even details of day to day expenses 2. In fact the assessee did not even file his returns of income regularly. 3. In absence of the books of accounts or details of day to day expenses it is not clear how is it possible to prepare such cash flow statement at the time of assessment proceedings .. 4. The cash flow statement shows huge cash balance of lakhs of rupees for several years with the assessee, beyond his source of income and status of living. 5. The assessee is a government ....
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....t. Appellant has a fair estimate of his day to day expenses or monthly expenses and accordingly; they are accounted for in cash flow statement. Therefore suspecision cannot be a reason for rejection of cash flow statement. 4. Finding of A.O. that cash flow statement shows huge cash on various dates is also incorrect because cash flow takes Rs. 1000001- as opening cash balance on 1/4/2003 and in the said cash flow statement the major source of cash flow is nothing but cash withdrawals from bank. Therefore denying the cash accruals based on withdrawals from bank is not correct on the part of A.O .. Even the A.O. has not found or given any cogent finding so as to show, why he does not agree with cash accruals. He has not pointed out any defects in the cash flow but his reasons' for rejection are based on mere suspecision and hypothesis. A.O. has not shown that expenses on part of appellant are more than what is shown in the cash flow so as to reduce the cash availability in hands of appellant. Even he has not made any addition on account of household expenses of assessee. 5. Objections of A.O. in Para 5 is again a re-writing of suspicion raised in Para 1....
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....t is on the basis of rejecting the claim of the assessee of cash on hand. 10. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. Ld. A.R. has placed reliance on the decision of coordinate bench in the case of Anant Steel Pvt. Ltd. Vs. ACIT (2016) 28 TTJ 47 and judgement of the Hon'ble Delhi High Court in the case CIT (Central)-III Vs. Kabul Chawala (2015) 61 Taxmann.comn 412. Ld. D.R. could not controvert the submissions of the assessee that no incriminating material was found. Moreover, we find that the addition is sustained merely on the basis of the presumption. We therefore, direct the A.O. to delete this addition. 11. Now, we take up IT(SS)A No.184/Ind/2016 pertaining to the assessment year 2008-09. The assessee has raised following grounds of appeal: 1. That the learned CIT(A) has erred in law and on facts in confirming addition of Rs. 3,15,000/- and Rs. 87,500/-. 2. That the addition confirmed by the learned CIT(A) as unexplained investment is not supported by any evidences, but is purely based on suspicion and surmise. 3. No addition can be made as an unexpl....
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....dence on record to sustain such addition. 5. That the appellant reserves the right to add, alter or amend the grounds of appeal before the appeal is decided, with the permission of Honourable Bench. 16. `The only effective ground is against confirming the addition of Rs. 2,00,000/-. Ld. Counsel for the assessee reiterated the submissions as made in the written submissions. The submissions of the assessee are reproduced as under: For 2009-10: Addition of Rs. 2,00,0001- is made on basis of some loose papers found in premises of Shri KK Sharma (These papers were not found in the premises of Appellant). The A.O. himself has given a finding that sum ofRs 2,00,0001- was paid by Mis Akshay Shakti Shiksha Evam Samaj Kalyan Samiti to the appellant in January 2009. Since, this payment is claimed to be made by the society, it is for them, to prove that such payment was made to the appellant on account of any income assessable in the hands of appellant. It is also very clear that A.O. does not have any evidence or material to prove that any such income was earned by the appellant. In fact A.O. was not even able to trace that the amount of Rs. 2,00,0001- has actual....
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....i Shiksha Evam Sarna] Kalyan Samiti. Therefore, the same income cannot be added in two hands for the same reason. Unless, it is shown on the basis of evidences and in accordance with law that it constitutes income in hands of both the assessee. It is further submitted that documents are already available to A.O during the earlier proceeding. 17. On the contrary, Ld. D.R. opposed the submissions. The Ld. A.R. submitted that the addition has been made not on the basis of any incriminating material found during the course of search but it is on the basis of rejecting the claim of the assessee of cash on hand. 18. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. Ld. A.R. has placed reliance on the decision of coordinate bench in the case of Anant Steel Pvt. Ltd. Vs. ACIT (2016) 28 TTJ 47. Ld. D.R. could not controvert the submissions of the assessee that no incriminating material was found. Moreover, we find that the addition is sustained merely on the basis of the presumption. We therefore, direct the A.O. to delete this addition. 19. Now, we take up ITA No.1013/Ind/2016 pertaining to ....
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....mption uls 292C states that any such document, if at all found, shall be treated as belonging to such searched person which means it does not belongs to other person. There is no corroborating material to support such transaction and without accepting it in any manner, even if it is accepted that any amount has been paid by Shri Pushpendra Mishra, even then, there is no material on record to show that it constitutes an income of appellant and not a loan or gift. Your kind attention is also drawn to the Par of the questionnaire dated 29/08/2011 issued by Assessing officer, where it is clearly stated that after 23/0312009 appellant was not having any connection with Swami Vivekanand Engineering College. Therefore even on account of college it is not possible to receive any money or pay it. A.O. has not brought anything on record to show that such money travelled to appellant as income and also not able to establish any motive or purpose for which such amount could have been paid to the appellant. Consequently, A.O. has failed to discharge his onus to make such addition. Therefore this addition is not made on the basis of any incriminating material found during the s....