TaxTMI 
TaxTMI 
2023 (11) TMI 1182
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the year under consideration had made cash deposits aggregating to Rs. 33,00,000/- in its bank account No. 16660200000753 maintained with Federal Bank, Bilaspur but had not filed its return of income for the said year, the A.O issued notice u/s 142(1) of the Act. As the assessee firm failed to comply with the notice u/s 142(1) of the Act dated 11.12.2017, the AO called upon it explain as to why an ex-parte assessment u/s 144 of the Act be not framed in its case. Also, the AO called for the necessary information/details u/s 133(6) of the Act dated 05.09.2019 from the assessee's bank. Thereafter, the AO once again issued notice u/s 142(1) of the Act and called upon the assessee firm to explain the nature and source of the cash deposits of Rs. 33 lac in its bank account. 4. In reply, the assessee firm vide its letter dated 23.09.2019, submitted before the A.O that it was a partnership firm engaged in the business of a developer, builder, and colonizer and was constituted on 14.01.2014 with three partners, viz. (i). Shri. Anil Kumar Singh; (ii). Smt. Seema Madhukar; and (iii). Shri. Abhishek Shrivastava. It was further submitted that vide "Deed of amendment", dated 09.06.2015, one of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing the year, therefore, no return of income was filed by it. The assessee firm in order to fortify its aforesaid claim filed a copy of its profit and loss account and balance sheet on 17.01.2017. However, the A.O did not find favour with the aforesaid explanation of the assessee and made an addition of the entire amount of cash deposits of Rs. 33 lacs (supra) u/s 69A of the Act. 6. Aggrieved, the assessee carried the matter in appeal before us the ld. CIT(A) but without success. The ld. CIT(Appeals), while dismissing the appeal of the assessee firm, observed as follows:- "5. Briefly stated the facts emerging from the assessment order are that the assessee has not filed return of income voluntarily u/s 139 of the Income-tax Act, 1961. The availability of cash for deposit in bank account of the assessee could not be verified. On the available record, the AO noticed that the assessee had deposited cash of Rs. 30,00,000/- in his FEDERAL BANK account No. 16660200000753, Bilaspur but he did not explain the source of income. Absence of any satisfactory explanation leads to the conclusion that the cash deposits aggregating to Rs. 33,00,000/- made in the assessee's bank account duri....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1 raised by the appellant is dismissed. The ground no.2 raised by the appellant is general in nature and does not require any adjudication. 8. In the result, the Appeal is hereby dismissed." 7. The assessee firm aggrieved with the order of the CIT(A) has carried the matter in appeal. 8. I have heard the ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record and considered the judicial pronouncements that have been pressed into the service by the ld. AR to drive home his contentions. 9. Controversy in the present appeal lies in a narrow compass, i.e., whether the assessee's explanation regarding the source of cash deposit of Rs. 33 lacs (supra) in its bank account is sustainable in the eyes of the law. 10. Admittedly, the cash deposits of Rs. 33 lacs (supra) were made in the assessee's bank account No. 16660200000753 maintained with Federal Bank, Bilaspur during the year under consideration i.e. A.Y. 2017-18, as under:- Sl. No. Date of deposit Amount of deposit Mode of deposit 1. 13.11.2016 12,50,000/- Cash 2. 15.11.2016 10,00,000/- Cash 3. 16.11.2016 10,00,000/- Cash 4. 16.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elied on the orders of the lower authorities. 13. I have given thoughtful consideration to the issue in hand, i.e. sustainability of the explanation of the assessee firm as regards the source of the cash deposits of Rs. 33 lacs (supra) in its bank account. On perusal of the "balance sheet" of the assessee firm on 31.03.2016, it transpires that it had with it on the said date closing cash-in-hand of Rs. 52.47 lacs (supra). Ostensibly, the aforesaid C.I.H of Rs. 52.47 lacs (supra) was, in turn, stated to have been sourced out of the sale proceeds of the agricultural land situated at Village: Chhatona, Bilaspur that was sold by the assessee firm at the fag end of the immediately preceding year and was stated to have been received in tranches, i.e. over the period 25.02.2016 to 04.03.2016 - Page 2 of APB. 14. Considering the fact that the assessee firm had duly disclosed CIH of Rs. 52.47 lacs (supra) in its "balance sheet" for the immediately preceding year i.e. A.Y. 2016-17, therefore, the genuineness of the claim of availability of cash with it cannot be doubted. Apart from that, it is not even the case of the AO that the assessee firm did not have an opening CIH of Rs. 52.47 lacs ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sh deposits of Rs. 33 lacs (supra) in the assessee's bank account during the year under consideration. Although the return of income of the assessee firm for the immediately preceding year, i.e A.Y 2016-17 was not filed within the stipulated time period but the same being a belated return of income that was validly filed under sub-section (4) of Section 139 of the Act cannot be brushed aside. As the department has neither drawn any adverse inference as regards the claim of the assessee firm that it had C.I.H of Rs. 52.47 lacs (supra) available with it on 31.03.2016 nor initiated any proceedings to scrutinize much the less dislodge the same, therefore, the only logical inference that can be drawn is that it had accepted the factual position as was canvassed and projected by the assessee firm in its return of income for the said preceding year. So far, the A.O.'s observation that the assessee firm's explanation, regarding the source of cash deposits in its bank account did not inspire much confidence as they were made during the demonetization period; I am afraid that the same cannot be accepted. On the contrary, the conduct of the assessee firm in depositing whatever cash th....