TaxTMI 
TaxTMI 
2020 (12) TMI 48
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....course of assessment proceedings, the Assessing Officer (AO) found that the assessee made cash deposits of Rs. 1,76,28,550/- and made the investments for purchase of car, introduction of capital in firms, expenditure incurred on foreign tours and some amount was given to his son, Shri P.Pavan Kumar and the total sums representing cash deposits, the investments and the expenditure incurred aggregated to Rs. 2,27,70,550/-, which was brought to tax as income from undisclosed sources. 2.1. Cash deposit of Rs. 1,76,00,000/- made by the assessee, bank wise are as under : Sl.No. Nature of credit/deposit Date of deposit Amount deposited Rs. Gross total SB A/c No.501000000975 with HDFC 1. Cash deposit 09.07.2011 24,000 2. Cash deposit 17.01.2012 40,000 3. Cash deposit 28.03.2012 5,00,000 TOTAL 5,64,000 5,64,000 SB A/c No.10846459231 with SBI 1. Cash deposit 02.06.2011 9,80,000 TOTAL 9,80,000 9,80,000 HDFC A/c No.00501000179862 1 Cash deposit 19.05.2011 24,96,000 2 Cash deposit 26.05.2011 ....
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....Late TMV Prasada Rao, the assessee furnished confirmation from his daughter Smt.Indira and also copy of bank account maintained by late TMV Prasada Rao jointly with his wife Smt.Tummala Vidyadhari. In the confirmation letter, the daughter of Late Shri TMV Prasada Rao has confirmed the payment of Rs. 1.60 crores to the assessee. However, the AO did not believe the contention of the assessee and held that it is an afterthought. Accordingly rejected the assessee's explanation and made the addition. 4. Against which the assessee went on appeal before the CIT(A) and argued that the source of cash deposit was the amount received from late Sri TMV Prasada Rao as well as opening balance which is evidenced by the confirmation letter and wealth tax returns, hence, requested to delete the addition made by the AO. The Ld.CIT(A) considered the submissions and observed that as per the confirmation letter given by Smt.Y.Indira, daughter of Late Shri TMV Prasada Rao, she confirmed having given the amounts to the assessee towards the advance for sale of property. It is further observed that there was opening cash balance of Rs. 8,59,76,000/- which is available to the assessee. The Ld.CIT(A) also....
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....he issue properly. He proceeded on the basis that the appellant sought to explain these amounts from out of advance received from Sri TMV Prasada Rao against sale of property. However, as per the confirmation tenet submitted by the appellant and Sint. Y.Indira, it is very much evident that the amount towards advance against sale of property were received only from 2006 to 2009. It is not the case of the appellant that he has received any advance for the impugned assessment year in respect of the said transaction. However, the assessing officer narrated the facts relating to claim of the appellant in respect of advance received from TMV Prasada Rao and proceeded to examine the said claim on similar lines as that of A,Y,2007-08. As such, the very approach of the assessing officer is found to be erroneous. 6.2.2. Having said that, I have examined the bank statements and the submissions of the appellant. I have also perused the assessment order u/s 16(3) r.w.s. 17 of the Act dt.31.03.2016 for AY.201 1-12. The total wealth was assessed at Rs. 4,92,36,670 including cash in hand of Rs. 59,76,000 (net amount after deduction of Rs. 50,000 exempt under Wealth Tax Act, 1957)....
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.... 6.2.4. Including the opening cash balance of Rs. 60,26,000 the total cash available is near about Rs. 2 crores and thus the entire cash deposits in the bank account stand explained. 6.2.5. As regards the other additions aggregating to Rs. 51,42,000 (22770550 - 1762855O), it is the contention of the appellant that the same have been met out of the cash available on the respective dates. In the absence of a detailed cash flow statement, I am unable to accept the contention of the appellant in toto. However, from the overall cash balance of Rs,2 crores worked out as above, there is a balance of Rs. 2 crores a sum of Rs. 24,00,000 is available after deducting the cash deposits in the bank aggregating to Rs. 1,76,28,550. Therefore, the appellant is entitled for relief to this extent. The balance addition of Rs. 27r42,000 is sustained. 6.2.6. Thus, out of the total addition of Rs. 2.27.70,750 the appellant gets relief of Rs. 2,00,28,550 and the balance addition of Rs. 27,42,000 is sustained." 7.1. From the order of the lower authorities, we find that the AO has taxed the sources and application of funds without giving any credit to the availability of sources. ....