TaxTMI 
TaxTMI 
2023 (3) TMI 755
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.... sources". The case of the assessee was selected under CASS on account of large cash deposits made during the demonetization period for complete scrutiny, thereafter notices u/s 143(2) and 142(1) were issued calling for the information/documentation. Further, during the course of assessment proceedings, the assessee was also issued a show cause dated 19.12.2019 as to why the amount of cash deposits in the demonetization period amounting to Rs. 1,20,58,272/- should not be considered as unexplained cash credit and added to his income u/s 68 of the Act. In response to the show cause, the assessee filed his submissions dated 24.12.2019 which were considered but not found acceptable to the Assessing Officer. As per the Assessing Officer, from the perusal of the cash book, it has been found that it was unaudited cash book having huge opening cash in hand as on 01.04.2016 amounting to Rs. 94,39,871/- which is unverifiable and without any documentary evidences. Further, no documentary evidences have been furnished regarding the rental receipts as well as receipt from agriculture income. Regarding cash gifts from his sons namely Rohit Kumar Punani and Sahil Kumar Punani, though the assessee....
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....mentary evidences. It was submitted that regarding the opening balance as on 01.04.2016, the source along with all the evidences were duly submitted and explained before the Assessing Officer during the course of assessment proceedings. However, Assessing Officer without any finding of fact against the assessee made the addition. It was submitted that the assessee, in addition to the books of accounts related to his business, also maintain the personal books of accounts. Further during assessment proceedings, personal cash book of the assessee was duly submitted before the Assessing Officer. It was submitted that the personal books of accounts are never subject to audit and neither there is any requirement in law to get the personal books of accounts audited. It was accordingly submitted that the action of the Assessing Officer is highly unjustified for rejecting the personal cash book merely on the ground that the same is not audited and that too, when the law does not impose any compulsory audit of the personal books of accounts. It was submitted that the cash deposits were made out of the cash balance in the cash book. It was further submitted that the cash balance is being carr....
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....ce rent from one property does not exceed the threshold limit of Rs. 1,80,000/-. However, Assessing Officer without reason rejected the explanation offered by the assessee. 7. It was further submitted that assessee has received the agricultural income in the captioned year i.e 2016-17 and in the preceding year i.e. F.Y 2015-16. In addition, a confirmation from the cultivating tenant has also been filed by the appellant during the assessment proceedings indicating the amounts paid by him to the assessee during the captioned year involved in this appeal. It was submitted that amount has already been taken as income by the assessee in his return of income as agricultural income and the Assessing Officer has no authority in law to change the source of income as income from undisclosed sources, unless something to the contrary is established by him. It is submitted that when the assessee has furnished evidence to support his claim of agricultural income during the years in question and further, the same has not been controverted by the Assessing Officer by bringing any adverse material on record, the explanation of the assessee cannot be rejected. 8. Regarding gifts from two sons,....
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....3 & A.Y 13-14 are placed on record. It was submitted that the assessment has been done by the same Assessing Officer as for the year under appeal and further, the income has been declared under the same sources by the assessee and well accepted by the Assessing Officer. But in the year under appeal, the same sources have been denied by the Assessing Officer without any material evidence on record. It was accordingly submitted that the opening cash in hand amounting to Rs. 94.39 lacs represents the declared source of income and the said cash has been deposited during the demonetization period. 10. Further, our reference was drawn to the cash book prepared for F.Y 2016-17 and contents thereof as below. 11. In this regard, it was submitted that the item wise explanation of the entries reflected in the cash book were duly submitted before the Assessing Officer. It was submitted that the cash deposits and withdrawals are from the regular bank account which is already disclosed in the income tax return. It was submitted that the assessee has let out various properties from where assessee earns monthly rental income of Rs. 55000/-. Similarly the agricultural income of Rs. 5.45 lacs ....
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....ccounts for both the years and have repeated the same observations to the ld CIT(A) as made by the AO and for which again, a detailed submission was filed before the ld CIT(A) which also find mention in at pages 19-25 of the impugned order. 14. It was submitted before the ld CIT(A) that the assessee had relied upon the cash flow for the financial year 2015-16 and 2016-17 and all the bank accounts and even the income declared by the assessee for A.Y 2013-14 to 2015-16 where the total income for these three years was Rs. 86,37,670/- for which the relevant proofs in the shape of acknowledgement had been submitted. It was further submitted before the ld CIT(A) that the fact that the assessee was always having substantial cash is proved from the fact that the case of assessee for A.Y 2011-12 was subject matter of reopening u/s 147 of the Income Tax Act, 1961 for a cash deposit of Rs.3,91,87,878/- and no adverse view have been taken by the department. Further, all such submissions which were made earlier were reiterated, along with the affidavits filed by the two sons of the assessee with regard to the gifts and the judgment of Mehta Parikh vs. CIT reported in 30 ITR 181 was relied up....
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....ht of aforesaid submissions, the addition so sustained by the ld. CIT(A) deserve to be deleted. 18. The ld. DR in her submissions supported the order and the findings of the Assessing Officer as well as ld. CIT(A). Regarding the contention of the ld. AR that the addition on account of opening cash in hand cannot be made in the year under consideration, it was submitted that the same cannot be accepted for the reason that it is the assessee claim that cash deposited during the year under consideration was out of opening cash in hand and given that where the said claim of the assessee regarding reopening cash in hand was not found substantiated and rejected by the Assessing Officer, the addition was made by him. It was further submitted that the assessee has made a cashbook with huge opening cash of Rs. 94.39 lacs which is an arbitrarily figure of cash in hand which cannot be accepted until and unless, these are reflected in the regular books of accounts of the assessee or declared/intimated to the Department before selection of case for scrutiny. It was submitted that such cash in hand is not substantiated by any documentary evidence in the firm of withdrawals from the bank accou....
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.... of cash deposits in the bank accounts maintained by the assessee during the demonetization period and the reasonableness of the explanation so submitted by the assessee explaining the source of such cash deposits. For the purposes, it is relevant to note the nature of activities being undertaken by the assessee, the books of accounts being maintained by him, if any and the status of disclosure thereof by way of tax filings and acceptance or otherwise by the tax department. In this regard, it is noted that the assessee is in the business of renting of halls for marriages and other functions which he runs in his capacity as sole proprietor in the name and style of M/s G.K Resorts and for which he maintains his separate books of accounts and separate bank accounts. The assessee is also a director in M/s GKS Infrastructure Ltd wherefrom he draws remuneration. Besides, the assessee has rental income, interest income and agriculture income and for the purposes, the assessee maintains personal cash book and operates separate bank accounts. The assessee has been regular in his tax filings where the income from above sources have been disclosed as evident from his tax filings for A.Y 2011-....
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....longwith 26AS for the Asstt.Year 2017-18. 16-19 iv. Copy of Account of Sh. Gulshan Kumar in the books of M/s G.K.S. Infrastructure, in which, he is director. 20 v. Copy of Director Remuneration Account of Sh. Gulshan Kumar. 21 vi. Detail of Bank Accounts as held by the Assessee in Asstt. Year 2017-18 mentioning Opening & Closing Balance. 22 vii. Copy of the HDFC Bank Account of the Assessee for the F.Y. 2016-17. 23-33 viii. Copy of Account of Bank of India of the assessee. 34 ix. Copy of Account of Corporation Bank of assessee 35-36 X. Copy of HDFC Bank Account in the personal books of accounts of Sh. Gulshan Kumar for Asstt. Year 2016-17, 37-45 xi. Copy of Corporation Bank Account in the personal books of accounts of Sh. Gulshan Kumar for Asstt. Year 2016-17, 46 xii. Copy of ICICI Bank Account in the personal books of accounts of Sh. Gulshan Kumar for Asstt. Year 2016-17, 47 xiii. Copy of Loan Accounts of ICICI Bank in the books of accounts of assessee. 48-49 xiv. Detai....
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....py of the order of Hon'ble ITAT, Chandigarh Bench, Chandigarh in the case of Sh. Rohit Kumar for Asstt. Year 2010-11 to prove that he is a man of mean. 121-127 3. Copy of the Additional Submission as per Order Sheet entry dated 11.04.2022 along with all Enclosures. 128-139 i. Copy of ITR return for Asstt. Year 2012-13 alongwith relevant page showing substantial agricultural income. 140-141 ii. Copy of Acknowledge of return for Asstt. Year 2013-14 alongwith relevant page showing substantial agricultural income. 142-144 iii. Copy of Acknowledge of return for Asstt. Year 2014-15 alongwith relevant page showing substantial agricultural income. 145-147 iv. Copy of Acknowledge of return for Asstt. Year 2015-16, showing substantial agricultural income. 148 v. Copy of the affidavit of Sh. Chamkaur Singh, from which, it proves that the income has been earned by the assessee alongwith English translation. 149-149 A vi. Copy of returns of Income of Sh. Rohit Kumar for Asstt. Year 2013-2014, 2014- 2015 & 2015-2016 alongwith computations of income. 150-157 &....
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....d perused the material available on record. The issue under consideration relates to source of cash deposits during the year in the two bank accounts maintained by the assessee amounting to Rs 13.5 lacs. In this regard, firstly, it is noted that during the year under consideration, the assessee has sold a property and consideration thereof amounting to Rs 43.50 lacs has been received through banking channels and there is no allegation by the AO in terms of any on-money received by the assessee in cash over and above the declared sale consideration. It has been explained by the assessee that the source of cash deposits during the year is out of earlier two years withdrawals and cash in hand at the beginning of the year. In support of his contention, the assessee has submitted cash book and cash flow statement for previous two financial years depicting the individual transactions of receipts and payments/withdrawals. We have gone through these cash flow statements and find that the assessee has sufficiently explained the source of deposits in form of salary and other retirement benefits which have been duly declared and withdrawals towards household expenses which are partly funded b....
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....the books of M/s G K Resorts and we find that the entries therein demonstrate withdrawal of capital by the assessee and the explanation regarding receipt of cash by way of withdrawal from his capital account therefore deserve to be accepted. Besides the above, there are other regular withdrawals and deposits transactions from the bank accounts maintained by the assessee which have been duly disclosed and reflected in the cash book and cash flow statement and have not been disputed by the authorities. We therefore find that the assessee has not just provided a reasonable explanation to explain the source of cash deposits but the said explanation has been adequately supported by adequate documentation and in the entirety of facts and circumstances of the case, the addition so sustained by the ld CIT(A) are hereby deleted and the order of the ld CIT(A) is set-aside and the matter is decided in favour of the assessee. 25. In the result, the appeal of the assessee is allowed. Order pronounced in the Open court on 31/10/2022. ============= Document 1 Financial Year 2016-17 Opening cash as on 01.04.2016 (as verified above) Add: Total Withdrawals (01.04.2016 t....
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....ted that the assessee had declared rental income of Rs. 55000/- per month in maintained and for salary income, rental income, agriculture income, though no books of accounts have been maintained and neither, it is mandatory, but the income declared in the returns of income had been taken for the purposes of explaining the cash -in-hand and other gifts received and, for which, the documentary evidences have been filed and which have not been considered without any evidence and the reliance has been placed on the judgment of the Apex Court in the case of CIT vs. Daulat Ram Rawat Mal reported in 87 ITR 349 that, if the documentary evidences are pitted against the oral statements, then the cause of documentary evidence will prevail. Further, there is no column in the Income Tax Return for declaration of cash-in-hand etc. 2. The Income Tax Act, 1961 by way of Section 44AB has laid down very clearly that under what circumstances, the books of accounts shall be audited and the fact that no penalty u/s 271B has been initiated proves the fact, that assessee's case was not eligible for Audit. As regards, closing....
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....y evidence is devoid of any valid reason and we had also filed the necessary proof of the same as submitted in the paper book at pages 104 to 105 and pages 149 to 149A of the paper book. Hence, this remark of Ld. CIT(A) be rejected. 6. About the two gifts from the sons, relevant cash flow of his sons along with ITR had been submitted and no defect had been pointed in that and further about the affidavit. it is submitted that the event, which had happened in the Financial Year 2015-16 was asked to be explained/confirmed. at the time of assessment proceedings and, therefore the same was explained/confirmed by way of duly attested affidavits, which had been mentioned as gift deed. Further, having not found any fault/defect in any of the entries, this remark of the Ld. CIT(A) is not acceptable. 7. Having not been able to find any omission in the entries either by the AO/CIT(A) of even by official of CIT(A), this is only a general remark and further, this remark of the Ld. CIT(A) that, the explanation of the agriculture income in the returns for AY 2013-14 & 2014- 15 is found to be false is vehemently denie....