TaxTMI 
TaxTMI 
2022 (8) TMI 438
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....ected for scrutiny through CASS, the assessment proceedings was conducted electronically and all the communication of data and documents took place through electronic mode. Statutory notice u/s.143(2) and 142(1) of Income-tax Act, 1961 (in short "Act") were issued and served on the assessee along with questionnaire. In response assessee filed the relevant information through e-filing portal. 3. During assessment proceedings, Assessing Officer observed that at the time of demonetization assessee has made deposit of Rs..1,01,20,000/- when the assessee was asked to furnish the details, in response assessee has submitted as under: - "a) During the year there were cash withdrawal through cheque of Rs. 3,14,00,000/- through four transactions t....
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....ssessee with the observation that Assessing Officer made the addition on inference and presumptions, there is no material to hold that the money was not available with the assessee, and he observed as under: - "4.3 I have very carefully considered the matter. There is a deposit of a sum of Rs. 1,01,20,000/- in the bank account of the appellant with Dombivali Nagari Sahakari Bank after demonetization. A sum of Rs. 1,20,000/- was deposited on 23.11.2016 and a further sum of Rs. 1,00,00,000/- was deposited on 13.12.2016. The appellant had opening cash of Rs.20,98,301/- as on 01.04.2016. A sum of Rs. 200,00,000/- was withdrawn from the Dombivali Nagari Sahakari Bank through cheques on 30.04.2016. A further sum of Rs. 1,14,00,000/- was withd....
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....on record of the AO to support the said conjecture. The appellant has provided explanation and the explanation is supported by books maintained. The action of the AO in rejecting the books on the ground that there is no business rationale in withdrawing large sums without putting same to use or that cash earlier withdrawn might have been used without accounting for the same, is legally not sustainable. As held by the Hon'ble Delhi Tribunal in the case of Gordhan, Delhi, Vs DCIT dated 19/10/2019, unless it is demonstrated by AO that amount in question has been used for any other purpose, no addition can be made under section 68. The same view has been taken in the case of ACIT Vs Baldev Raj Charla 121 TTJ 366 (Delhi) wherein it has b....
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....her, as can be seen from the assessment order the creditworthiness of the assessee is not in doubt. The genuineness of the transaction is supported by bank withdrawals of substantial sums anterior to the date of demonetization. The onus on the assessee to explain stands discharged. The factum of entire sum earlier withdrawn not re -deposited back is not a ground for making addition under section 68. What the Act mandates is that a credit in the books has to be satisfactorily explained, its nature and source established. It is held that the necessary ingredients of section 68 are satisfied in this case with respect to the credit of Rs.1,01,20,000/- in the books of appellant. In view of the facts of the case and position in law, addition of....
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....sh withdrawals were never used can't be accepted as true and satisfactory. Thus, assessee fails the test of preponderance of human probability. iii) The importance of providing a valid explanation regarding the reasons for cash withdrawals from bank and holding huge amount of cash in hand becomes very relevant, when the findings of Hon'ble Supreme Court of India in the case of Sreelekha Banerjee v. CIT [1963] 49 ITR 112 (SC) reproduced in the decision of Jurisdictional Hon'ble High Court of Bombay in Narendra G Goradia v. CIT [1998] 234 ITR 571 is considered. The relevant findings are as under: (Page 107 of Assessee's Paperbook) "....In cases of high denomination notes, where the business and the state of accounts and de....
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....that assessee has withdrawn cash and there is a nexus with the deposits made by the assessee in the bank. The assessee hold sufficient cash balances in hand at the time of making deposit in the bank. The Assessing Officer made the addition with the observation that assessee did no re-deposit the whole amount. He submitted that the assessee has fulfilled creditworthiness and genuineness of the transaction. Therefore, merely making presumptions and applying preponderance of probability, Assessing Officer made the addition. He supported the findings of the Ld.CIT(A) and prayed that the order of the Ld.CIT(A) may be sustained. 9. Considered the rival submissions and material placed on record, we observe that Assessing Officer noticed that asse....