TaxTMI 
TaxTMI 
2023 (8) TMI 1454
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....roceedings only submitted figures/datas in order to establish the source of such cash deposits made by the assessee during assessment proceedings but no documentary evidences relating to the purposes of such cash in hand i.e. expenses such as wages etc was filed by the assessee, done in FY 2016-17, if any, relating to the AY 2017-18 or in any of the earlier AY/AYs.` 3. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) erred in law & on facts, ignoring Section 68 of the Income-tax Act, 1961 which clearly speaks that the primarily burden of proof lies on the assessee in order to prove the genuineness of the transactions which the assessee failed to do so. 4. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) erred in law & on facts, ignoring the Provision of Section 103 of the Evidence Act which clearly states that the burden of proof is on the person who wishes the court to believe in the existence of a particular fact. In this scenario, Burden of proof will never be shifted to the Revenue, it lies on the assessee who is required to prove a fact. When we come within the ambit of Section 68 of the Income-tax Act, 1961, one and the mo....
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....hat the assessee throughout during assessment proceedings even before appellate proceedings only submitted figures/datas in order to establish the source of such cash deposits made by the assessee during assessment proceedings but no documentary evidences relating to the purposes of such cash in hand i.e. expenses such as wages etc was filed by the assessee, done in FY 2016-17, if any, relating to the AY 2017-18 or in any of the earlier assessment years and has grossly erred in ignoring the provision of sec 68 of the Act which clearly provides that the primary burden of proof lies on the assessee in order to prove genuineness of transaction which the assessee failed to discharge. 4. The ld. Senior DR vehemently pointed out that on the facts and in the circumstances of the case, the Ld.CIT(A) erred in law & on facts, ignoring the Provision of Section 103 of the Evidence Act which clearly states that the burden of proof is on the person who wishes the court to believe in the existence of a particular fact. In this scenario, Burden of proof will never be shifted to the Revenue, it lies on the assessee who is required to prove a fact. When we come within the ambit of Section 68 of the....
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.....04.2016 and cash withdrawals from the bank account of assessee till 08.11.2016 which has not been disputed as the same also tallies with the cash balance as on 31.03.2016 as per return of income for AY 2016-17 filed before declaration of demonetization, and the same cash balance was brought forward as opening balance on 01.04.2016. The ld. counsel submitted that the ld. CIT(A) has considered stand of the Assessing Officer and explanation of assessee supported by plausible documentary evidence and thereafter deleted the addition by recording sustainable reasoning which requires no interference and thus appeal of revenue may kindly be dismissed. 7. On careful consideration of above rival contention first of all, from the assessment order we note that the Assessing Officer made addition u/s. 68 of the Act by observing that the assessee has failed to explain the source of cash deposited during demonetization period. The contention of Assessing Officer are precisely that the cash withdrawals by the assessee are not near to the dates of cash deposits and when the cash was withdrawal for wages payments & other purposes then there is no reason why such expenses were not incurred and a ru....
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....h withdrawals and deposits were a part of routine business exercise of the assessee even in the period prior to the demonetization. In support of the said charts, the assessee also submitted its cash books and bank account statements. The assessee also stated that it was engaged in the real estate business and needed to maintain sufficient cash balances for various exigencies at various sites. It was further brought to the knowledge of the AO that the impounded documents contain cash balances available at site offices of the assessee and did not incorporate the cash balances as per the main cash book maintained at the corporate headquarters. It was stated that the balances as per various cash books as on 08.11.2016 were as follows: 1. Main Cash Book Rs. 2,25,17,139 2. Imprest Madanpur Rs. 8,620 3. Imprest Lalit Sharma Rs. 4,00,500 4. Imprest Ravinder Sharma Rs. 16,15,000 5. As Per impounded documents Rs.13,78,181 Total Rs. 2,45,41,259 5.1. After considering the submissions, the AO has not accepted the explanation of the assessee regarding the cash availability as per books as on 08.11.2016, on the basis of the following reasons: 1 The cash withdrawals ....
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....om bank and cash deposits into bank.However, the month wise opening and closing cash in hand are accurately calculated in both sets of comparative charts. The set of comparative charts furnished during assessment proceedings is extracted below: 5.2.3. I have considered the comparative charts as submitted during appellate as well as assessment proceedings. On the basis of the following observations, I am not in agreement with the reasons given by the AO to treat the cash deposited postdemonetization as unexplained. From the comparative charts for complete financial years 2015-16 and 2016-17, it is observed that the appellant usually maintains a high cash balance in the books of account. This is evident from the opening cash balance of Rs. 1,70,45,310/- as on 01.04.2016, which is also corroborated by the cash balance as on 31.03.2016 as per the IT and audit report for A.Y. 2016-17, which was filed on 01.10.2016ie. before demonetization and is therefore not a subject matter of manipulation. 5.2.4. The wisdom behind maintaining such high level of cash balance cannot be a subject matter of finger-pointing by the AO, and is best left to the business prudence of the assessee. Howeve....
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....essee company being a running concern, could not have mounted cash for so long, amounts to mere surmises since the fact of maintenance of high cash balances across extended period of several months is duly established from the ITs and audit reports as well as cash withdrawals of the appellant from its bank accounts, both of which are a matter of record and are not subiect to manipulation. It is an established principle that business prudence behind such practices is not subject to questioning. 5.2.5. As regards the time gap of a few months between cash withdrawal and cash deposit into the bank accounts, similar trend is observed in the preceding year also, thereby establishing that such time gap too was a normal feature of the assessee's business. E.g. substantial cash withdrawal of Rs. 1,20,70,000/- was made in the month of April, 2015 and the same was effectively deposited back into the bank accounts in the month of March, 2016. The decisions of the jurisdictional High Court cited by the appellant in the cases of Kulwant Rai (supra) and Jaya Aggarwal (supra) are also in support of these findings. In the case of Kulwant Rai, the assessee had cited withdrawal of a sum of R....
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.... on 08.11.2016. The appellant has stated that the existence of the main cash book cannot be denied since most of the bank transactions, whether deposits or withdrawals, have been routed through the main cash book, which is the reason why the main cash book has the bulk of cash balance. It is further submitted by the appellant that cash in hand as on 01.04.2016 as per the sum total of all cash books, including the main cash book, comes to Rs. 1,70,45,310/-, which is also the figure of cash in hand as on 31.03.2016 as per the IT for AY. 2016-17 filed prior to demonetization. I have examined the above contentions and find that the AO's action in ignoring the main cash book is incorrect due to reasons cited by the appellant, since major bank withdrawals and deposits have been routed through the main cash book and if the said cash book is ignored, it would amount to ignoring the cash withdrawals made from bank accounts as well as cash deposits therein. Further, the AO has not cited any statement recorded or logical reasoning as to why the main cash book has been ignored. Therefore the observation of the AO that the cash book has been constructed in such a manner so as to explain the....
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....1.10.2016 before declaring of demonetization order. The ld. CIT(A) further noted that maintaining high cash balance is a subject matter of business prudence of assessee which cannot be disputed by the Assessing Officer. The ld. CIT(A) also evaluated the patterns of cash withdrawals from bank account and noted that during FY 2015-16 cash withdrawals were Rs. 5,84,79,000/- and during FY 2016-17 it was Rs. 5,20,46,260/- and cash deposited during FY 2015-16 was Rs. 1,20,00,000 and during F.Y. 2016-17 cash deposit was Rs. 2,40,12,000/-. Therefore above comparison and figures clearly show that the assessee was consistently maintaining huge cash balance as per his business prudence and there was huge cash withdrawals which are much higher than the amounts of cash deposited by the assessee to its bank account during pre & post demonetization period and we are unable to see any discrepancy defect or perversity therein. It is pertinent to mention that the ld. Senior DR did not dispute above noted factual position noted by the ld. CIT(A) before granting relief to the assessee. 10. We further observe that the ld. CIT(A) after considering the cash withdrawals from the banks as per bank stateme....