TaxTMI 
TaxTMI 
2022 (3) TMI 1025
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....148 of the Act on 28.03.2019; in response to which, the assessee filed his return declaring income of Rs. 1,32,950/-. Thereafter, the statutory notices u/s 142(1) of the Act were issued from time to time. During assessment proceedings, the assessee made submissions to justify the sources of deposits made in bank account. However, the Ld. AO was not satisfied and passed assessment-order after treating the deposits of Rs. 11,19,200/- as unexplained income of the assessee. 3. Aggrieved by the order passed by Ld. AO, an appeal was preferred by the assessee before the Ld. CIT(A), who sustained the addition made by the Ld. AO and dismissed the appeal. 4. Still being aggrieved by the order of Ld. CIT(A), the assessee is now in appeal before us on the following grounds:- "1. That on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in confirming the erroneous additions made by the Ld. AO to the tune of Rs. 11,19,200/- u/s 68 of the Income Tax Act, 1961. 2. That on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in not allowing the assessee the benefit of peak credit, and rejected the claim of the assessee without properly ....
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....l 2(a) and 2(ca) to Sec 147, as under, would apply to the facts of this case: Explanation 2.-For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax ; (b) .... (ba)... (c).... (ca) where a return of income has not been furnished by the assessee or a return of income has been furnished by him and on the basis of information or document received from the prescribed income-tax authority, under sub-section (2) of section 133C, it is noticed by the Assessing Officer that the income of the assessee exceeds the maximum amount not chargeable to tax, or as the case may be, the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return;" It is evident from the provisions of sec 147 as above, the AO was well within his rights to reopen the assessment and make an additio....
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.... perusal of bank statement of State Bank of India A/c No. 10142169289, it is seen that the major amount deposited in cash by the assessee on 25.07.2011 at Rs. 1,75,000/- & on 04.11.2011 at Rs. 8,00,000/- & on 19.11.2011 at Rs. 1,00,000/- and small amount on various dates. The assessee was asked to explain the cash deposit, but the assessee has not explained the same, the assessee has produced only cash flow chart. As the assessee was having source of income only from salary & pension and the assessee has not produced any kind of evidence regarding cash deposit. As, the assessee not furnished any documents to substantiate the source of cash deposits amount to Rs. 11,19,200/- in her saving bank account of above mentioned bank. Therefore the same is being added to total income of the assessee as unexplained income of the assessee." 7.3 During first appellate proceeding, the Ld. CIT(A) has sustained this addition of Rs. 11,19,200/- by observing as under:- "6. On the merits of the case, the appellant has stated that the AO has overlooked his explanation and has not made any independent enquiries. This argument of the appellant is side stepping the issue. The fact is that the appellan....
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....er. The long and short of the explanation is that the appellant for some strange reason is in the habit of withdrawing small amounts from the ATM, storing the unused portion with him in cash over the years and then one fine day, deposits the same in his bank account. This stretches one's imagination too far and in simply untenable." 7.4 Before us, the Ld. AR relied upon the submissions made by the assessee before lower authorities. The assessee is a retired army officer and working as sub-inspector and earning income from salary and pension only and there is no other source of income available to the assessee. Regarding deposits in bank account, it is the submission that those deposits have been made out of the funds saved from salary and pension income which are withdrawn / re-deposited time to time from / into bank account. The Ld. AR pleaded that during assessment proceeding, the assessee has submitted a cash flow statement to Ld. AO which is reproduced by Ld. CIT(A) in Para No. 4 of the appeal-order. The Ld. AR further submitted that the lower authorities have not controverted this cash flow statement, they have only drawn their own inferences based on conjectures and surm....
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....essee in his bank account on various dates and therefore the Ld. AO is not correct in concluding that the assessee has not explained the cash deposits. On perusal of the appeal-order, we observe that the Ld. CIT(A) has drawn his own inferences based on conjectures and surmises rather than controverting the cash flow statement in concrete terms. We observe that the Ld. CIT(A) has stated that the appellant has claimed an opening cash balance of Rs. 7,90,000/- and the withdrawals made by the appellant from his bank account are small amounts through ATM withdrawals. When we look into the cash flow statement, we observe that the assessee has made a single cash withdrawal of Rs. 7,25,000/- on 21.12.2011, which shows that the assessee is making high cash withdrawals too, though there are small withdrawals of course as stated by Ld. CIT(A). Thus, to say that the assessee is making only small withdrawals, is baseless. We also note from the cash flow statement that the assessee has shown a closing cash balance of Rs. 9,22,680/- which supports the fact that the assessee is keeping high cash balance as well. Another observation made by Ld. CIT(A) and emphasized by Ld. DR too that the assessee ....