TaxTMI 
TaxTMI 
2020 (12) TMI 48
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....ng 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 20,04,000 3 Cash deposit 27.05.2011 5,00,000 4 Cash deposit 14.06.2011 3,09,750 5 Cash deposit 0....
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....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 found that while taking the cash deposits as undisclosed income, the AO did not consider the cash withdrawals made from the bank which is amounting to Rs. 1,39,23,009/-. The total cash available to the assessee worked out to Rs. 2 crores against the cash deposits of Rs. 1,76,28,550/- leaving the balance of Rs. 27,42,000/- which remained unspe....
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....nly 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). Thus. I found the contention of the appellant that there was an opening balance ofRs. 59,76,000 as correct. 6.2.3. The next contention of the appellant is that there were withdrawals in the bank account and the same were ignored by the assessing officer while arriving at the amount of unexplained cash deposits. The appellant was subjected to survey u/s 133A of the Act....
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....e 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. Thus the AO did not appreciate the information available before him properly. Though the assessee has furnished the evidence with regard to receipt of the money from late TMV Prasada Rao and got confirmed by the daughter of late TMV Prasada Rao, the AO did not disprove the statement given by Y.Indira with proper evidence. In this case, the confirmation letter was given by Y.Indira. The assessee submitted that he has entered into agreement for sale of property consisting of 6000 sq.ft in Victory Complex, Peda Waltair, Visakhapatnam. Neither the sale agreemen....