TaxTMI 
TaxTMI 
2023 (11) TMI 703
X X X X Extracts X X X X
X X X X Extracts X X X X
....iate the following:- (a) As per the cash flow statement explained before the Assessing Officer, which is reproduced on Page-5 of the assessment order, there was opening balance of cash of Rs. 2.05 crores and such cash balance is not challenged. (b) The appellant had also explained that it had withdrawn cash from the bank account wherein sufficient balance was available. Thus, the source of cash as per the cash book was fully explained. The books are audited. Further, it is not the contention of Assessing Officer that such cash was utilized. (c) The Assessing Officer or the Department has not doubted the source of amount withdrawn from the bank account. (d) The appellant had also explained the reasons for withdrawal of cash from the bank account and for maintaining such cash balance which was for the purpose of business. (e) It is not the case of Department that such cash was not available with the appellant. (f) Purpose of maintaining such cash balance was fully explained and it is the decision for business. (g) Various decisions including the decision of the Jurisdictional High Court and Tribunal support, the appellant's explanation that having regard to the said....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on deputed for verification of land, property title etc., submitted that it has not appointed any person or paid any fee in this regard. 5. However, the AO was not satisfied with the explanation furnished by the assessee. The AO found that the assessee has not provided cash flow statements establishing the claim made by it. The cash from the bank was withdrawn from the Month of April to January on a regular basis whereas deposits were made during the month of February to March. The assessee's claim that cash was withdrawn for purchase of lands has not been substantiated based on cogent material. As such the assessee failed to provide any evidence regarding the so-called land deal for which it withdrew money from the bank, but the same got cancelled. Further, if the negotiation for purchase of land was not finalized then what was the reason for the withdrawal of such huge cash. It is also not acceptable that a prudent business will withdraw such huge hard cash and keep the same as it is for such a long period in pursuance to a deal which was not materialized at all. The AO also referred to the judgment of Hon'ble Delhi High court in case of Shri Dinesh Kumar Jain vs. PCIT reported ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sh balance was maintained on the assumption that as soon as the negotiations were completed, payment regarding the same could be made, but the parties could not come to a common point and the deal got cancelled. Further the appellant company has submitted that as the negotiation process was conducted verbally and telephonically there was no question of furnishing any evidence as the deal was not finalized. But the Assessing officer has not accepted this explanation and treated all the cash deposits made in the bank account as unexplained which resulted into the impugned addition of Rs. 46.98 crore. The Revenue has not tried to put itself in the arm-chair of the businessman. It has merely asked the appellant to discharge its onus by producing cogent evidence. The various decisions relied upon by appellant can be distinguished from the facts of the case. 5.5 Hon'ble Supreme Court in the case of Roshan Di Hatti Vs. CIT [1992] 2 SCC 378 has held that if the assessee fails to discharge its onus by producing cogent evidence and explanation, the AO would be justified in making additions to the income of the assessee. 5.6 In view of the above discussion, the reliance placed by AO o....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., a suspicion cannot take the place of the evidence as held by Hon'ble Supreme Court in the case of CIT vs. Daulat Ram Rawatmull reported in 53 ITR 574, the relevant extract reads as under: "The circumstances relied upon by Mr. Sastri do raise suspicion, but suspicion cannot take the place of evidence." 10.3 For the sake of repetition, we also note that indeed, the activity of withdrawing the cash, keeping the same as it is and redeposit the same in the bank after considerable period is very unusual practice but there is no prohibition under any of the law for the time being in force for doing such activity. Thus, merely an unusual activity of the assessee does not give an authority to the revenue to make the addition to the total income of the assessee. 10.4 In fact the assessee in the given facts and circumstances has discharged the onus imposed under the provisions of section 68/ 69 of the Act by furnishing the necessary details which have been elaborately discussed in the preceding paragraph. Thus, the onus shifted upon the revenue to disprove the contention of the assessee based on the tangible materials. But we note that the learned DR has not brought any iota of evidence....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the source of the cash deposits, however, the contention of the ld. counsel for the assessee is that he had withdrawn the amount from his bank account and there is no finding by the authorities below that the cash withdrawn by the assessee was utilized for any other purpose. In the absence of such finding, addition is not justified. We find merit into the contention of the ld. counsel for the assessee that there is no dispute that the amount which was withdrawn by the assessee on various dates during the year 2006 was available with him for making deposits. In the absence of finding that the amount which was previously withdrawn by the assessee had been utilized for any other purpose merely on the basis of conjecture that the amount might have been utilized for any other purpose and was not available with the assessee for making the deposits, we are unable to accept the reasoning of the authorities below. In our considered view, when the assessee has demonstrated that he had withdrawn cash from the bank and there is no finding by the authorities below that this cash available with the assessee was invested or utilized for any other purpose, in that event, it is not open to the au....