TaxTMI 
TaxTMI 
2024 (10) TMI 1271
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....xplained the source of cash deposit as well as cash available in cash book and the Ld. AO has never rejected books of accounts u/s. 145 nor pointed out any defect in the same nor find out utilization of available cash for any other investment. And CIT(A), NFAC has erred for confirming the order of Id. Assessing officer. 2. On the fact and circumstances of the case, the A.O. Ward 2(1), Raipur has erred for treating cash deposit of Rs. 33,00,000/- as unexplained cash credit merely by disbelieving on statement of appellant recorded u/s. 131 during the course of assessment proceeding without verifying the same with books of accounts and other documents submitted by appellant which is bad in law. 3. On the fact and circumstances of the case, the A.O. Ward-2(1), Raipur has erred for treating cash deposit of Rs. 33,00,000/-as unexplained cash credit u/s. 68 as he failed to brought into records the specific entry which he consider to be unexplained despite of fact that appellant had sufficiently explained the credit entries with all documentary evidences. 4. That on the fact and circumstances of the case, the honourable CIT(A) has erred for confirming the order o....
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....0.00 8 Capital introduction by Mr. Gyanchand Tatiya from personal account on 21.10.2016 Rs.5,00,000.00 9. Capital introduction by Mr. Gyanchand Tatiya from personal account on 31.10.2016 Rs.6,00,000.00 10. Capital introduction by Mr. Gyanchand Tatiya from personal account on 05.11.2016 Rs.2,00,000.00 11. Capital introduction by Mr. Gyanchand Tatiya from personal account on 02.11.2016 Rs.4,20,000.00 Total Rs.54,80,572.58 The A.O after considering the assessee's reply called upon him to explain the purpose, for which, cash was withdrawn by him from his bank account and was kept idle for a substantial period prior to depositing the same in his bank account during the demonetization period. In reply, it was the claim of the assessee that as he had no faith in the banking system, therefore, he had instead of depositing the accumulated amount of cash in his bank account retained the same. The A.O was not persuaded to subscribe to the aforesaid claim of the assessee. The A.O was of the view that the explanation of the assessee defied all logic and militated against the principle of preponderance of human probabilities. The A.O was of ....
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....nd of appeal No.4 is general in nature and does not call for any adjudication. The remaining grounds are adjudicated as under: Grounds of appeal No.1 and 2: 6. There is only one issue involved in these grounds is against the addition of Rs. 33,00,000 as unexplained cash credit u/s 68 of the Income Tax Act. 6.1 In this case, the AO issued summon u/s. 131 on 21.11.2019 requiring the personal attendance of the appellant for recording his sworn deposition. The appellant in his statement, explained the source of cash deposit as the cash withdrawal and capital introduced by the assessee from his personal account. The source of cash deposit explained by the appellant in response to Question no. 19 was duly recorded at page no. 2-3 of the assessment order as follows: Sl. No. Particulars Amount (Rs.) 1. Opening balance as on 01.04.2016 in C.P.Coal Company AX DEPA Rs.510572.58 2. Cash withdrawn in 16.05.2016 from Bank account in Allahabad Bank Rs.11,00,000.00 3. Cash withdrawn in 16.06.2016 from Bank account in Axis Bank Rs.9,00,000.00 4. Cash withdrawn in 28.07.2016 from Bank account in Allahabad Bank Rs,1,00,000.00 ....
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.... 6.3 It is noticed from the assessment order that the AO has not added the entire amount of cash deposited during the demonetization period but added only Rs. 33,00,000 as unexplained cash credit u/s. 68 of the Income Tax Act for not furnishing satisfactory explanation. 6.4 Before me, the appellant submitted that the amount deposited was out of cash-in-hand. However, there is no presumption that the cash-in-hand or cash withdrawn from banks was used for cash deposits in question. As opined by Hon'ble Supreme Court in Sumati Dayal vs. CIT [1995] 80 Taxman 89 (SC) such matters have to be considered in the light of human probabilities. 6.5 It is "apparent" that the appellant MIGHT HAVE used the cash-in- hand or the cash previously withdrawn from bank accounts to deposit in the bank. BUT IS IT "REAL" ? The appellant is insisting to consider the 'apparent' i.e., depositing the cash-in-hand or cash withdrawal from banks, as 'real' and to allow the matter in its favour. This raises the question whether the 'apparent' can be considered as 'real'. The AO has rightly relied upon the decision of Hon'ble Supreme Court in Sumati Dayal vs....
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....00,000 as unexplained cash credit under section 68 of the Income Tax Act stands justified. Accordingly, these grounds are dismissed. Ground of appeal No. 3: 7.0 Vide this ground, the appellant contented that the AO has erred in recording the statement u/s. 131, which is bad in law as well as un-warranted. 7.1 As mentioned in earlier paragraphs of the order, during the assessment proceedings, the appellant was asked to explain the sources of cash deposit of Rs. 33,00.000 during demonetization period in SBN. The appellant submitted response online, however, the same was not found satisfactory by the AO. Accordingly, summon u/s. 131 was issued on 21.11.2019 requiring the personal attendance of the appellant for recording the statement. In response to the summon, the appellant appeared on 16.12.2019 and his statement was recorded u/s. 131 of the I.T. Act, 1961. 7.2 On perusal of the assessment order, it is noticed that the assessee appeared in response of summon u/s. 131 of the I.T. Act, 1961 without raising any objection before Assessing Officer and his statement was also recorded. Having participated in the tax proceedings, the appellant cannot rai....
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....s in SBNs in his bank account aggregating to Rs. 46,01,000/-, viz. (i) cash deposit in SB A/c. with State Bank of India, GCET Branch, Raipur on 10.11.2016: Rs. 13,01,000/-; and (ii) cash deposit in CC A/c. 20246189407 with Allahabad Bank, Branch : Amrit Sandesh on 22.11.2016: Rs. 33 lacs. Although, the A.O was of the view that cash deposit of Rs. 13,01,000/- (supra) made by the assessee in his bank account on 10.11.2016, i.e. on the first day of banking after the demonetization scheme had come into force, was sourced out of the funds that were genuinely available with him on the said date, but he called upon the assessee to put forth an explanation regarding the cash deposit of Rs. 33 lac (supra) made in his CC A/c. No.20246189707 with Allahabad Bank on 22.11.2016. As the explanation of the assessee that the cash deposit of Rs. 33 lac (supra) was sourced from the books of account of his sole-proprietary concern, viz. M/s. CP Coal Company, which in turn was primarily sourced from, viz. (i) opening cash in hand as on 01.04.2016 : Rs. 5.10 lac (approx.); (ii) cash withdrawals from books of accounts of the proprietary concern, i.e. over the period 16.05.2026 to 21.09.2016; Rs. 29 lac a....
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.... lacs (approx.); (ii) cash withdrawn from the bank accounts during the period 16.05.2016 to 21.09.2016 :Rs.29 lacs (aggregate); and (iii) cash introduced by the assessee by way of his capital from the cash in hand available in his personal account : Rs. 21.70 lacs (aggregate). It was submitted by the Ld. AR that as the subject cash deposit in SBNs of Rs. 33 lacs made by the assessee in his bank account during the demonetization period, i.e. on 22.11.2016 was sourced out of the duly audited books of accounts of the proprietary concern, viz. M/s. CP Coal Company, therefore, there was no justification for the A.O to have held the same as unexplained cash credit u/s. 68 of the Act. 10. Per contra, the Ld. Sr. Departmental Representative (for short 'DR') relied on the orders of the lower authorities. It was submitted by the Ld. DR that as the explanation of the assessee as regards retaining of a substantial amount of cash in hand with him instead of depositing/investing the same defied all logic and was found beyond human probabilities, therefore, the A.O had rightly rejected the same and held it as an unexplained cash credit u/s. 68 of the Act. 11. I have thoughtfully considered ....
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.... (supra) by way of capital addition (out of personal funds available with him) in his proprietary concern, but I am afraid that the same in absence of any material which would irrefutably evidence availability of the aforesaid substantial amount of cash with him to source the capital introduction on the respective dates, cannot be summarily accepted. Although the assessee had placed on record a copy of his "balance sheet" (personal) as on 31.03.2016 which, inter alia, reveals the availability with him of cash in hand of Rs. 48.71 lacs (approx.) as on 31.03.2016, but the said claim is in the thin air and neither forms part of his return of income for the immediately preceding year, i.e. A.Y.2016-17 nor is supported by any independent material. In fact, the AO's conviction that now when the assessee during the pre-demonetization period was already having substantial amount of cash available with him, i.e. sourced out of opening CIH : Rs. 5.10 lac (supra) and cash withdrawn from bank accounts of the proprietary concern : Rs. 29 lacs, therefore, it was beyond comprehension and against the principle of preponderance of human probabilities that he would be in possession of substantial am....