TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 246
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.... was out of balance of cash withdrawal from Bank in the year 2014-15 for Rs. 21,60,000/- and Rs. 1,40,000/- out of income of the year 2015-16. 3. On the facts and in the Circumstances of the case the learned AO/CIT (A) erred in not accepting cash deposits in Bank out of earlier cash withdrawal from Bank without finding that the cash withdrawn has been spent or invested elsewhere. 4. On the facts and in the Circumstances of the case the learned AO as well as CIT (A) erred in disbelieving the availability of cash in hand merely because the same is kept as cash in hand for nearly 32 months, because the assessee was having bank account. 5. On the facts and in the Circumstances of the case the learned CIT(A) erred in holding that cash in hand on 31.03.2015 has not been reflected in return for the A.Y. 2015-16 ignoring the fact that the return in form No. 1 applicable and filed by the appellant does not have any column to disclose cash in hand while the Balance Sheet required and filed during assessment proceedings duly shows available cash in hand amounting to Rs. 21,60,301/- on 31.03.2015. 6. On the facts and in the Circumstances of the case the learned AO as well as CIT(A) err....
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....2016, were sourced out of the cash withdrawals from her bank account in F.Y 2014-15 and lying available with her as cash in hand on 01.12.2016 (supra). Considering the submission of the assessee and examining the facts, the A.O issued another notice u/s 142(1) of the Act dated 01.10.2019 to the assessee and called upon her to justify the purpose for having withdrawn the amount of Rs. 21.60 lac (approx.), and keeping such substantial amount as cash in hand for nearly 32 months when she had a bank account. Further, on examination of the records, it was observed by the A.O. that the amount of Rs. 23,45,301/- was shown as cash available on 31.03.2016 in her return of income for A.Y. 2016-17 that was filed on 02.12.2016, i.e., during the demonetization period after the cash deposit of Rs. 23 lac (supra) in old currency notes was made by her during the year under consideration. Again, the A.O. called for the assessee to justify the factual position. Also, it was observed by the A.O that during the A.Y. 2015-16 and A.Y. 2017-18, the assessee had filed her return of income in ITR-1(SAHAJ) wherein she had in the said respective returns of income disclosed the interest income under the head ....
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....ount deposited with M/s Mangal Tyres (supra) was disclosed under the head "income from other sources." During the proceedings, it was further observed by the A.O. that the assessee had nowhere clarified why she had treated interest income in two ways while filing the return of income, i.e., partially as business income and partially as income from other sources. Accordingly, the A.O. was of the view that if the assessee was doing the business of money lending, then she should have treated all the interest income earned as business income. The A.O observed that during the A.Y. 2015-16 and A.Y. 2017-18, the assessee had no business income, and was in receipt of interest income on bank deposits and deposit with M/s Mangal Tyres (supra). The A.O further observed that the assessee has not clarified that in her return of income for the A.Y. 2016-17, why the interest income received from M/s Mangal Tyres (supra) was not treated as business income whereas interest received on the amounts advanced to various person was treated as business income. The A.O. observed that the assessee had also not furnished the list of the various persons to whom the money was given and interest income was ear....
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.... to tax an amount of Rs. 23,00,000/- being cash deposited in the bank account of the appellant during the demonetization period. The facts of the case are that appellant is stated to be an old lady (widow) of 80 years. She had filed return of income for AY 2017-18 on 09.01.2018 declaring taxable income at Rs. 12,83,090/-. On scrutiny AO had noticed that appellant had deposited cash amounting to Rs. 23,00,000/- in her bank account during the demonetization period. On being asked as to why said amount should not be taxed for which, the appellant is stated to have been withdrawn cash amounting to Rs. 23,45,306/- from her bank account during the FY 2014-15 which again has been deposited during the demonetization period amounting to Rs. 23,00,000/- It is further stated that this amount has been shown as cash on hand ending 31.03.2016 in her return of income. However, the explanation of the appellant has been rejected by the AO stating that no reason has been provided as to why the said cash has been kept with the appellant for about 32 months. It is further stated by the AO that appellant had deposited cash in her bank account during the demonetization period on 01.12.2016 whereas the r....
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....r 2015-16. The Ld. AR submitted that the lower authorities had erred in most arbitrarily disbelieving the availability of cash in hand merely because the assessee, despite having a bank account, had kept a substantial amount as cash in hand for nearly 32 months. The Ld. AR submitted that as in the case of the assessee for A.Y 2015-16 and A.Y 2017-18, the return in "Form No. 1" (SAHAJ) was applicable, wherein there was no column to disclose cash in hand, thus, she had filed the same, but in the "balance sheet" that was filed during assessment proceedings the cash in hand amounting to Rs. 21,60,301/- that was available with her on 31.03.2015 was duly disclosed. The Ld. A.R. further submitted that as for A.Y 2016-17, considering the streams of income of the assessee, the latter was required to file her return of income in "Form 4S", wherein there was an innate requirement to disclose the assets and liabilities; therefore, the assessee had while filing her return of income for the said preceding year complied with the statutory requirement and disclosed the amount of cash in hand that was available with her on 31.03.2016. The Ld. A.R further submitted that the assessee had rightly show....
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.... the reason that now when the assessee had herself claimed that the cash withdrawals of Rs. 21.60 lacs (supra) was thereafter, utilized by her for giving short term interest bearing advances to third parties, then in the backdrop of the aforesaid factual position the availability of the said funds as cash in hand with her during the year for making cash deposit in her bank account did not merit acceptance. It is incomprehensible that the amount of Rs. 21.60 lacs (supra) withdrawn by the assessee in the period relevant to A.Y.2015-16 would have been exploited by giving the same as short-term interest-bearing advances to third parties and, at the same time, be available with her for sourcing the cash deposits in her bank account. A heavy onus was cast upon the assessee to establish the availability of an amount of Rs. 23 lac on the date on which the same was claimed to have been redeposited, i.e., on 01.12.2016. I do not say that no part of the funds sourced out of the aforesaid cash withdrawals by the assessee from her bank account in A.Y.2015-16 would have been available with her on 01.12.2016 (supra), but in the absence of the requisite details, which would evidence that the inter....