TaxTMI 
TaxTMI 
2022 (11) TMI 623
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....ss at Rs. 4,75,700/- and net profit at Rs. 3,17,065/- only. The AO from the bank statement of the assessee observed that the assessee has made cash deposits of Rs. 10,40,800/- only in his personal saving bank account. 4. On question about the source of cash deposit, the assessee submitted that cash was deposited out of loan and advances recovered in the current year which were given in the preceding year and out of cash withdrawal and also out of the profit earned from business during the year. 4.1 However, the explanation of the assessee was not accepted by the AO on the reasoning that the assessee was having opening cash balance of Rs. 1,412/- only and the loan advances given by the assessee also increased during the year from Rs. 6,53,000/- to Rs. 8,13,000/- only. Likewise, the assessee has not shown any withdrawal for household expenses throughout the year and also made withdrawal from the bank on 4 occasion only. Further, the cash was deposited just before making payment to Bhumika Commodities Pvt Ltd. for making investment in shares and commodities. Therefore, the AO held that assessee's explanation that cash was deposited out of withdrawal and recovery of cash received fro....
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....en submission. On additional evidence, in the remand the AO thoroughly examined the facts of the case and the documents submitted by the / appellant and given the finding that the assessee's contention that the cash deposits is out of cash loan received back is factually wrong. 4.8 The appellant filed rejoinder on the similar line as submitted in the assessment order and in the remand report. It is noted that the appellant could not substantiated the contention that the cash balance available with him and cash deposits in bank is out of previous withdrawal and receipt of past loan given. Therefore in view of the factual report given by the AO the contention of the, appellant is not tenabl'e. 4.9 Reliance is placed on the following decision where it has been held that cash deposited in the banks, if not supported with the proper evidence, will be treated as unaccounted deposit u/s.68 of the Act. 1. Sudhir Kumar Sharma HUF Vs, CIT Punjab Si Hariyana 46 taxrnan.com 340 held as under:- "Section 68 of the Income-tax Act, 1961 - Cash credits (Cash deposits) - Assessment year 2007-08 - During assessment proceedings, Assessing Officer noticed that assessee had deposited hug....
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....ount and thereafter cheques were issued to different parties and in such circumstances, the theory of peak credit could not be accepted. Moreover, the assessee had not been able to show that there existed any nexus whereby the -* amount deposited in cash had been withdrawn in cash and thereafter redeposited to take benefit underl peak credit theory. [Para 9] m In view of the above, no substantial question of law arises. The assessee's appeal stands dismissed. [Para 11]" SLP against the decision was dismissed by the Hon'ble Supreme Court and the addition made by the AO was upheld by the Apex Court. 2. Kavita Chandra Vs. CIT Punjab & Hariya HC 217 PIOL - 611 - HC "Cash deposit can be treated as unexplained income if the assessee was unable to link the cash withdrawn from the bank account in the cash deposit." 4.10. The issue is also covered by the recent decision of Hon'ble Ahmedabad ITAT, Hon'ble Gujarat High Court and Hon'ble Supreme Court in the case of Pavankumar M. Sanghavi v/s ITO. The Hon'ble ITAT ( 81 taxmann.com 308 ) has held that when Assessee received unsecured loan but could not produce lenders for verification and these lenders were found....
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....the entire issue is based on appreciation of evidence on record and thus factual in nature. The Tribunal has given elaborate reasons to come to the conclusion that the entire transaction was not genuine. In absence of any perversity, we do not see any reason to interfere. 4. Learned counsel for the assessee however vehemently contended that the assessee had received loans through cheques from lenders who had confirmed the same. Their accounts are audited and filed before the Revenue authorities. Thus, the genuineness of the transactions, the capacity of the lender and the factum of lending all have been established. Addition under section 68 of the Act there could not have been made. However, as noted, the Tribunal has minutely examined the position of the lenders, the circumstances under which, the amounts were allegedly loaned to come to the conclusion that the "transactions were not genuine," The Hon'ble apex court on 01.5.2018 also dismissed the SLP filed against the order of the Hon'ble Gujarat High Court . 4.11. Considering the facts and the decisions cited above, the addition made by the AO is confirmed and ground of appeal is dismissed. 9. Being aggrieved by ....
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....ssee has shown closing balance of such loans and advances at Rs. 6,08,000/- only. Thus, there is no ambiguity to the fact that the amount of loan advances was increased in the year under consideration in comparison to the earlier year. Accordingly the AO did not believe the reply made by the assessee that there was recovery of the loan/advances which was utilized for making the cash deposits in the bank. In this regard I have perused the cash book and other details in support of the recoveries of the loan shown by the assessee and find that the assessee after recovery of the loan has shown deposits in the bank account which was subsequently withdrawn and again the advance was made by the assessee to the same parties. In many of the cases I have perused the confirmation and find that the assessee after recovery of the loans and advances has again made the loans and advances in the short span of time. Therefore it is difficult to believe the version of the assessee that he has recovered loan & advances in cash and deposited the same in the bank and again given the loans and advances to the same parties after making withdrawal from the bank. Indeed, the transaction shown by the assess....