2022 (9) TMI 1309

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....iation of action u/s. 147 of the Act is invalid and assessment made on such invalid initiation deserves to be quashed and may kindly be quashed. 3.0 The Ld. CIT(A) erred on facts as also in law in summarily confirming the addition made by the AO in total disregards to the submission made during the course of appellate proceedings. 4.0 The Ld. CIT(A) erred on facts as also in law in confirming addition of Rs. 3,84,57,514/- made u/s. 68 of the Act on the alleged ground of unexplained cash deposit of Rs. 3,84,57,514/-. The addition made is totally unjustified on facts as also in law, which may kindly be deleted. 5.0 Your Honor's appellant craves leave to add, amend, alter or withdraw any or more grounds of appeal on or before the hearing of appeal." 3. The issue raised by the assessee in Ground No. 4 is that the Ld. CIT(A) erred in confirming the addition of Rs. 3,84,57,514/- representing the cash deposit in the bank treating the same as unexplained cash credit under Section 68 of the Act. 4. The facts in brief are that the assessee in the present case is an individual and filed return of income declaring an income of Rs. 1,04,892/- only. There was....

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....he parties and perused the materials available on record. At the outset we note that the identical issue was raised in the own case of the assessee in ITA Nos. 138 and 119/RJT/2017 for the A.Ys. 2011-12 where the ITAT was pleased to delete the addition made by the authorities below. The relevant extract of the order is reproduced as under: "24. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, there were huge cash deposit in the account of the assessee. But at the same time there were huge withdrawals from the bank in cash. Thus, we are of the view that if the cash deposits are treated as income of the assessee then at the same time cash withdrawal from the bank should be treated as expenses. As such the AO cannot take a view which is benefiting the Revenue without considering the fact for the withdrawal of cash. In this regard we have perused the bank statement of the assessee which is available on record and find from-the same that there were continuous cash deposits and withdrawals. 25. We also note that as per the accounting rule all the withdrawal of cash goes into cash book and if it is unspent....

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.... My monthly income is about Rs. 1700/- to Rs. 1800/-. 28. However, the authorities below has not carried out any verification from such parties despite having sufficient powers with them granted under the statute. As such, the assessee discharged his onus by furnishing the details of the parties as discussed above and the onus was shifted upon the revenue to disprove the contention of the assessee that he was not working on behalf of such ceramic manufacturers. 29. We also find that the case of the assessee was taken under the income escaping assessment under section 147 of the Act for the assessment year 2006-07 on the basis of the letter issued by DDIT (Inv), Ahmedabad dated 4-3-2013 after recording the reason that the assessee is engaged in the activity of Shroff. Thus, in our considered view such reason recorded by the revenue under section 148 of the Act also supports the contention of the assessee that he is engaged in the activity of money transfer. Indeed, the assessee was doing such business without obtaining any license from the competent authority. Accordingly it can be inferred that such business carried on by the assessee was without obtaining the lic....

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....counts. The A.O., has made addition of total cash deposits in these bank accounts by considering only the credit side of the bank account and the debit side i.e. withdrawal has been ignored altogether. This cannot be considered justified because, it is legally settled principle that the evidence should be relied upon in total and not in piece-meal manner. It is also legally settled principle that if there are withdrawal from the same account in cash prior to the deposit in cash, it is considered that the cash withdrawn has been utilized to deposit in the same account, if that has not been found invested in other asset or incurred as expenditure by the assessee. Keeping in view the facts of the case that the cash deposited in the bank account and amount was withdrawn in cash from the same bank account; the additions of total cash deposits made by the A.O. are not found justified. If these cash deposits would have remained in the bank account or found by the A.O., as invested by the appellants in other assets or incurred expenditure; additions to the extent of such investment expenditure could have been justified. But in the present case, no such findings have been given by the A.O. ....