TaxTMI 
TaxTMI 
2016 (11) TMI 1685
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....cash balances were available with him. In support of his explanation, the assessee produced books of account and on verification, the AO found that the cash of Rs. 32.20 lakhs was withdrawn from A/c No.801086148 and Rs. 13.80 lakhs from A/c No.801086149 on 27-9-2007 and Rs. 7.25 lakhs was withdrawn on 10-3-2008 from A/c No.801086148. Finally, as on 31-1-2008, the assessee disclosed an amount of Rs. 53,06,368 in his possession in the form of cash as per the cash book for the F.Y.2007-08 and as per the cash book for F.Y.2008-09, the assessee has brought forward the same cash balance of Rs. 53,06,368 as opening balance. He observed that there was not even a single cash transaction during the entire year and the same amount of Rs. 53,06,368 had become the closing cash balance as on 31-3-2009 and the same cash was re-deposited into the S.B.A/c during the F.Y. 2009-10. The A.O. did not accept the explanation of the assessee for the following reasons: (i) Further when the cash of Rs. 53.06 lakhs is available with Assessee as on 31-03-2008 and as on 31-03-2009, he would have filed wealth tax Returns by disclosing the same because the cash available is taxable under the Wealth tax Act. T....
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.... that the entire Cash should have been deposited at once cannot be the valid reason for rejecting the Assessee's source of Cash Credits in the bank. (3) The Assessee has submitted the Books of account and the bank Statements, explaining the Cash with drawls from his bank accounts and stated that the same cash in hand was redeposited in his bank accounts on various dates during the Assessment Year 2010-11. The assessee has also submitted the Statement of affairs for each year. The assessee has drawn his own money from his bank accounts and kept as Cash in hand. The deposits made into the Bank accounts during the Assessment Year 2010-11 were out of Cash in hand and the same was explained before the assessing officer. The genuineness of the cash withdrawn from the assessee's Bank accounts were proved by the assessee by submitting the bank statements and Books of account and the Statement of affairs" (4) The assessee has right to make his own decisions on investments and deposits in bank and to plan for his earnings. The assessing officer has failed to give any legal restriction, if any, in respect of limits in maintaining cash balance in hand. (5) The assessee h....
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....ee has no other source of Income in India other than the declared income. The cash deposits are not Cash Credits received from some others and source of such deposits are from his own cash in hand, the order of the learned Assessing officer is contrary to law and facts of the case and may therefore, be set aside and the additions to the extent of Rs. 34,70,000/- under Sec 68 deleted. 5. After considering the submissions of the assessee, the CIT(A) decided the issue in favour of the assessee, as under: 4.4 The assessee has deposited the cash in his bank accounts out of cash drawals made in the previous year and the evidence of such withdrawals were shown in his bank Statements which were submitted along with Books of account for the past three years and the assessee has also submitted his wealth tax returns, which includes the cash in hand as at the end of the each previous year. The cash deposits are not Cash Credits received from some others and source of such deposits are from his own cash in hand. The A.O. only on mere assumptions and suspicions had not considered the explanations of the assessee and made the addition of Rs. 34.70 lakhs. 4.4.1 I find force in the var....
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.... satisfactorily explain the source for the cash deposits made in the bank accounts. (iv) The Ld. CIT(A) erred in placing reliance on the decisions of the Hon'ble Supreme Court in the cases of Umacharan Shaw & Bros. and Dhakeswari Cotton Mills Ltd. that suspicion cannot take the place of proof though the facts of assessee's case are distinguishable. The Learned CIT(A) ought to have seen that the conclusion reached by the assessing officer regarding the assessee's failure to prove the source of the cash deposits in the bank accounts is on the basis of the application of the test of preponderance of probabilities on a proper and cumulative appreciation of the surrounding circumstances. (v) The Learned CIT(A) ought to have appreciated that the assessee being a non resident in India and resident of Oman could not have held cash of more than Rs. 50 lakhs in hand in India from the time cash was withdrawn from the bank accounts during the F.Y. 2007-08 and cash was deposited in bank accounts during the F.Y. 2009-10. (vi) The Ld. CIT(A) ought not to have placed any reliance on the books of account showing cash on hand furnished by the assessee in the absence of carrying ....