2011 (11) TMI 836

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....t, and had incorrectly and unjustifiably upheld the said action of ld.AO. 1.1 That the ld.CIT(A) erred on both facts and in law in confirming the action of the ld.AO of making an addition of Rs. 38,50,000 without appreciating that the addition is merely based on suspicion and subjective opinion of the ld.AO on the business of sale & purchase of properties. 1.2 That the ld.CIT(A) erred on both facts and in law in confirming the action of the ld.AO of rejecting the explanation of the appellant of cash deposit in bank without appreciating that the said rejection is not supported by any cogent reason or any material on record which remotely suggest that there is any investment/receipt over and above as disclosed by the appella....

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..... The assessee filed explanation in his regard and gave the reconciliation thereof which is listed in page 2 of the assessment order. The claim of the assessee was that the various cash withdrawals were made which after short intervals ranging from few days to a month were deposited in the bank. Similarly, the assessee explained that for the purpose of its business of buying and selling of properties, cash was withdrawn from the bank account. Since the properties could not be purchased, they were redeposited in the bank account. The Assessing Officer further observed that in many property transactions, there was high probability of generation of unaccounted cash. Therefore, the cash withdrawal made by the assessee was to be made in the pers....

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....ion of the properties sold by the assessee, as mentioned in Table-2 on page 3 of the assessment order. Further, as discussed in Para-8 & 9, the assessee had shown a particular suspicious pattern of behaviour while depositing the cash in various bank accounts. This also strongly supports the argument that the cash deposits of the assessee are from unaccounted sources. After analyzing the entire pattern of cash deposits and evaluated the circumstantial evidence, a reasonable and just addition of Rs. 38,50,000/- was made on account of unexplained cash deposits. 3. During the course of assessment, the properties sold by the assessee were also referred for valuation to the DVO. The report of the DVO which was received on 31.12.2009 also....

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.... the assessee contends that no comment has been offered by the Assessing Officer in respect of reconciliation of the assessee for making cash deposits in the bank accounts. The assessee withdrew cash from the bank accounts and since they could not be utilized after a period of few days or a week depending upon circumstances redeposited the cash in his own account. The deposits are not new but are redeposit of the cash withdrawn. There is no finding that the assessee has utilized the amount withdrawn by cash in any other activity or property. 6. The sole reason for holding that the cash deposits are unexplained is the suspicion of the Assessing Officer that the assessee might have collected unaccounted money in the property transactions a....