TaxTMI 
TaxTMI 
2022 (1) TMI 736
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....atisfactory or otherwise nature thereof is principally a matter of inference qua the truth of the explanation, drawn on a conspectus of the case, comprising the factual back ground of the case, i.e., the primary and secondary facts, admitted or proved. The same is to be, as per the law settled by the Apex Court, on the three parameters of identity and capacity (of the creditor or the source) and the genuineness of the transaction. The respective cases 4.1 In the facts of the case, the assessee, admittedly a student till a year ago, explained the cash deposit to be out of the cash available with her as at the beginning of the year (rs.1,97,500); that drawn from bank (rs.66,000) since, i.e., up to 08.11.2016, the date immediately before the demonetization period; and rs.98,830, stated as earned by way of tuition income, aggregating to rs.3,62,330 (as on 08.11.2016/PB pgs. 39-41), of which rs.2.47 lacs was deposited with bank on 19.12.2016. Though there is no explanation as to why, where so, the balance cash admittedly available with her, i.e., rs.1,15,330, was not similarly deposited, on record, Shri Bardia, the ld. counsel for the assessee, would, on asking, explain the same as he....
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....exceeded rs.2.50 lacs. Her entire case, thus, is an after-thought and, no wonder, unsubstantiated, based on self-serving statements. This sums up the Revenue's case. Discussion/Findings 5.1 My first observation in the matter is that the period 08.11.2016 to 31.12.2016, typically termed as 'the demonetization period', was a period of great anxiety in the society, particularly for the business community, as people were anxious to deposit their money (demonetized currency notes), now no longer legal tender, with the banks, which had been authorized to accept the same (as well as release new currency). This was as not so doing - for which the period up to 31.12.2016 had been specified, would imply a total loss of their money represented by old currency. Furthermore, assessees running businesses required cash in new currency to run the same, as indeed did people at large for their households. The banks, deluged with depositors as well as withdrawers, had laid limits to both the cash deposit (of old currency) and withdrawal (of new currency). It is amid such tumultuous and uncertain times, marked by frantic attempts by all - assessees and non-assessees, to somehow protect their wealth ....
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.... the same being kept just below the safe limit of rs. 2.50 lacs. Further still, the reason for cash accumulation by the assessee has been stated as for incurring expenditure on her impending wedding. The same again lacks credibility. Firstly, the same would at best explain the non-deposit of cash generated during the year (01.4.2016 onwards), and not of that available before that date (rs. 2 lacs), as she could not be attributed with prescience to know her wedding date at that time. What, one may ask, in any case prevented the assessee to deposit cash in bank, withdrawing it as and when, and to the extent, required. The same is also inconsistent with the withdrawal of cash during the year, even as no cash, either stated as held as on 01/4/2016 or withdrawn thereafter, has been shown spent by her on her marriage on 08/12/2016. 5.2 I may next proceed to examine the assessee's explanation on merits, i.e., from the stand point of the stated source of the cash claimed as available as on 08.11.2016. There is firstly nothing on record to substantiate the source of the cash stated as available on 31.3.2016. As afore-noted, all the incomes arising to the assessee in the past were through t....
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....s explained by Sh. Bardia during hearing, by her parents and, further, withdrawing cash from bank, in which she maintains a tidy balance, is now a matter of minutes, as indeed has been the case in the instant case, with the assessee withdrawing through ATMs. The only explanation for the cash withdrawal during the current year could be for its utilization or anticipated utilization. The second stated source for cash is the tuition income, explained to be received from six students preparing for their CS December, 2016 exams, @ rs.20,000/- each. The assessee is stated to be a qualified Company Secretary. However, when asked about when she graduated - there being nothing on record which states so, met with no definite answer. That apart, no details, viz. the subjects she taught; the period, etc. stand furnished at any stage. Even as much as the names of the students taught are conspicuous by their absence. There is, thus, nothing to evidence the cash available with the assessee on 08.11.2016 other than that withdrawn from bank during the relevant year prior to that date (PB pgs. 25 - 31). Even the date of cash deposit in bank is also very relevant, being forty days after start of the ....
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.... cross-examined. In fact, the said affidavit stood retracted on 14.10.2019, stating that some of it may have been in old currency. In this regard, even as observed during hearing, what value the said affidavit when it is an undisputed fact that cash (in old currency) at rs.2.47 lacs was deposited in bank on 19.12.2016, and toward which the assessee had in fact also furnished a disclosure on 07.02.2017 (PB pgs. 36-38). Nothing, thus, turns on the said affidavit, apart from speaking very poorly of the assessee's father, who issued the statement without confirming the facts. In fact, the affidavit being admittedly and materially incorrect, the argument is also without merit. (c) The second legal argument raised is that as the cash deposited with bank stands duly recorded in the assessee's books of account, no addition u/s. 69A could be made. The contention is untenable on two counts. First, where recorded in account books, it is the truth of those entries that section 68 requires the assessee to prove. And, where not, section 69/69A, likewise, requires an assesssee to prove the nature and source of an asset found, as against the sum credited, signifying receipt, that he is required t....