AI Drafter 
TaxTMI 
TaxTMI 
2022 (8) TMI 303
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....l evidences on record. 3. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)grossly erred in sustaining an addition of Rs. 2,00,000/- u/s 69A as unexplained credit entries in bank account. 4. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)grossly erred in sustaining an addition of Rs. 1,01,075.30 u/s 56 as unexplained interest income/receipt in bank account. 5. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)grossly erred in not allowing deduction u/s 80C amounting to Rs. 1,00,000/- in respect of HDFC Life Insurance. 6. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)grossly erred in upholding the invocation of section 115BBE for computing the tax liability. 7. That the appellant craves leave to add, amend, alter modify, substitute or delete any ground or grounds of appeal on or before the hearing of the appeal." 3. The assessee has raised a petition for additional evidence which reads as under:- ....
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....ment proceedings with supporting evidences but the lower authorities still opted to make the addition brushing aside all the submissions, evidences, Indian customary tradition and factual situation. The sources of cash deposits are explained as under :- 1. That a sum of Rs.5,01,000/- was received as cash gifts from Mrs. Indu Pandya (mother of Abhilasha Jain) on various occasions in support of which bank statements of Mrs. Indu Pandya are furnished at paper book page no. 19 to 23. Affidavit of Mrs. Indu Pandya is furnished at paper book page no. 18 as confirmation of the gifts. Details of cash withdrawals are furnished as under :- S.NO. DATE AMOUNT 1 13.08.2012 10000 2 13.09.2012 50000 3 03.10.2012 36000 4 22.10.2012 25000 5 13.12.2012 50000 6 02.01.2013 50000 7 27.02.2013 10000 8 04.04.2013 25000 9 05.04.2013 15000 10 13.07.2013 20000 11 12.11.2013 10000 12 11.08.2014 50000 13 11.08.2014 25000 14 12.09.2014 20000 15 25.09.2014 55000 16 05.12.2014 50000 Total 501000 It is humbly submitted t....
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....rm of cash in the bank account. 6. Copy of marriage certificate, passport, income tax returns of China etc. are furnished at paper book page no. 38 to 43. It is submitted that the entire cash deposits are from explained sources. It is further submitted that lower authorities merely acted on surmises and suspicion without any material on record. The cash flow statement and other evidences submitted by the appellant were arbitrarily rejected without pointing out any specific defect. No material was brought on record by the ld. A.O. to establish that the cash withdrawn from the bank account was not available for deposit when demonetization was declared. The humble appellant wish to rely on the following judgments :- S.No. Judgement Held 1 Shri M. Prabhakar ITA No. 1727/Hyd/2014 dated 11.11.2016 (ITAT Hyderabad) Bench AO concluded that there is no possibility of keeping such huge amount in cash by the assessee being a NRI but AO has not brought on record that why he cannot keep so much of cash in hand. AO has made the addition merely on conjectures/surmises/suspicion and no proper reasons were given why he cannot keep the cash in hadn except....
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....ilability of cash from cash flow statement filed by the assessee. Addition cannot be made u/s 69 for deposits made in bank accountsimply for the reason thttehse were made after a gap of 14 months of earlier withdrawals since AO has failed to establish the utilization of earlier withdrawals elsewhere. (Paper book page no. 44) 7 R.K. Dave Vs. ITO (ITAT, Jodhpur) 94 TTJ 19 Mere fact that the assessee could not explain the time gap between the amount withdrawn and investment or where the amount was kept would not itself justify the addition. 8 ACIT Vs. Baldev Raj Charla 121 TTJ 366 (ITAT, Delhi) There being no material with IT authorities to show that the amounts of cash deposits in question, admittedly withdrawn from bank and assessee concern, were utilized for any other purpose, no addition could be made only on the ground that there was time gap between the withdrawals and the corresponding cash deposits. 9 Smt. VeenaAwasthi ITA No. 215/LKW/2016 dated 30.11.2018 (ITAT Lucknow) All throughout Assessing Officer has raised suspicion on the behavioural pattern of frequent withdrawal and deposits by the assessee. There is no law in the country which prevents ci....
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....r at para no. 9.5 at page no. 16 that as on 01.04.2014 cash in hand was Rs.12,91,500/- but no supporting documents were given. It is humbly submitted that cash flow statement (copy enclosed) was prepared right from 2011 to explain the entire position of cash availability. The ld. A.O. failed to point out any deficiency/discrepancy in cash flow statement of the appellant. Just before demonetization, as per the cash flow statement the appellant was having cash balance of Rs.22,73,500/- out of which Rs.15,00,000/- were deposited back in bank account due to demonetization, hence still Rs.7,73,500/- surplus is available with the appellant to cover the allegation of ld. A.O. regarding personal expenditure, petty cash withdrawals etc. It is humbly submitted that the entire source of cash deposits was duly explained during the assessment proceedings with supporting evidences but the ld. A.O. still opted to make the addition brushing aside all the submissions, evidences, Indian customary tradition and factual situation. Hence, it is most respectfully requested that the impugned addition, being illegal and unjustified, may kindly be deleted." 7. Aggrieved by the assessment order,....
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....g from 02.04.2016 to 29.10.2016. By the very nature of being small periodic withdrawals show that the same have been made for house hold or other personal expenses. No rational person would continuously withdraw cash from the bank account for no reason or purpose just to pile up the cash with herself just to deposit the same in the bank account after several years. If the appellant was not in need of cash, there was no reason to withdraw further cash from the bank account when she already had huge unutilized cash available with her. In the fact and circumstances the whole argument is so make believe story, after thought and completely implausible. The argument is rejected. 8.3 During the assessment/ appeal the appellant had submitted cash flow statement which showed that only incoming were shown but no expenses/ cash outflows were shown. It is not possible that the appellant had not utilized even a single rupee in all these years and did not incur even a single rupee expenditure. The cash flow statement which is concocted, fabricated and self-serving has been rightly rejected by the AO. 8.4 It is also noteworthy that the huge cash deposit of Rs. 15,00,000/- was ma....
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.... was free to reject his explanation and to hold that the amount represented income from some undisclosed source". 8.8 Further, in cases relating to the issue of source of demonetized currency, Hon'ble High Courts of Patna and Calcutta in ChunilalRastogi vs. CIT [1955] 28 ITR 341 (Pat.), Anil Kumar Singh vs. CIT [1972] 84 ITR 307 (Cal.) and M. L. Tewary vs. CIT [1955] 27 ITR 630 (PAT.), have respectively held that where the assessee could not satisfactorily prove source and nature of amount which he encased on demonetization, revenue authorities were perfectly justified in drawing an inference that said sum was of an income nature. 8.9 Hon'ble ITAT Delhi has in Leela Devi Vs /TO (ITATDelhi) [ITA. No. 1423/Del/1420] has upheld addition of unexplained cash deposit in the bank account in AY 2017-18 i.e. during the demonetization period. 8.10 The appellant claims are unsubstantiated, without any tenable evidence, self-serving and a make believe story. Clearly, the appellant had deposit her own undisclosed money in the bank account during the demonetization period. The appellant has failed to explain the source of the same, the addition of Rs. 15,00,000....
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.... of total cash of Rs. 22,73,500/- which shows that the assessee has deposited only Rs. 15,00,000/- on 12.11.2016. The contention of the Department that the time gap is more and the withdrawal are made on various occasions does not warrant that the assessee keep cash on hand but in the absence of any contrary material placed on record the evidence supported by bank statement and gift deed cannot be overlooked. The assessee is not having regular residency in India, the use of cash withdrawal cannot be considered as used without bringing anything contrary on record and for this the benefit goes in favour of the assessee. The assessee has clearly established the nexus of cash deposits viz-a-viz to the cash available with the assessee filing of all relevant record including the affidavit of her mother and her bank statement. All these records are not disputed by the Assessing Officer. The ld. AR of the assessee has also submitted that the invocation of the higher rate U/s 115BBE of the Act is effective from 15.12.2016 as the Hon'ble President of India gave consent on that date whereas the money has deposited dated 12.11.2016 and thus, the higher rate cannot be applied. 9. Per contra,....
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....f brevity:- "9. Considered the rival submissions and perused the material facts on record. The assessee has deposited Rs. 34.70 lakhs during this AY and there is sufficient cash available in his possession as per the cash book and Wealth Tax return submitted by the assessee. The mute question before us is whether the cash deposited was coming out of the cash available with the assessee, which was kept by him for last two years. It was not brought on record why he has withdrawn so much of money and what made the assessee to keep such huge money in hand. But, on record, submitted by the assessee, we find that he had sufficient money. Even the AO could not bring any proof that the assessee has in fact utilized or applied the cash withdrawn two years back, except making a remark that there is no possibility of keeping such amount by the assessee being a NRI. He has not brought on record, why he cannot keep so much of cash in hand and no contrary findings were given by him against the submissions of assessee. AO has made the addition merely on conjectures/surmises/suspicion and no proper reasons were given why he cannot keep the cash in hand except the remark of being an NRI. I....
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....ccount No. 50100085719780 (para no. 16 at page no. 19 of the assessment order) without even issuing a show cause notice to the appellant in this respect otherwise the appellant could have explained it during the assessment proceedings itself. The ld. CIT(A) deleted the addition to the extent of Rs.1,75,400/- but sustained the addition of Rs.2,00,000/- in respect of one credit entry of Rs.2,00,000/- in bank account on 05.01.2017 (para no. 9 & 9.1 at page no. 22 of the appellate order). As per the appellant's bank statement of HDFC NRO A/c No. 50100085719780 (paper book page no. 17) one credit entry of Rs.2,00,000/- is appearing on 05.01.2017 to which the appellant submitted that it seems cheque deposit for dollar exchange, details are being tracked and shall be submitted shortly. The ld. CIT(A) rejected the submissions while passing the order as by that time the appellant lady residing at China couldn't provide the details. The appellant lady was unable to trace the details as she was in China and Covid-19 situation was disturbing the world all over. However, after the CIT(A) passed the order, the details were traced. The credit entry of Rs.2,00,000/- pertains to r....