TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1211
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....d being in violation thereof. 3. Rs. 12,30,000/-: The ld. CIT(A) has erred in law as well as in facts in confirming the additions made on account of unexplained cash deposit in bank account u/s 69A of the Act. The addition so made and the confirmation thereof by the ld. CIT(A) being contrary to the provisions of law and facts of the case, the same kindly be allowed in full. 4. The ld. AO further erred in law as well as on the facts of the case in imposing tax, surcharge, cess etc. as per provision of S. 115BBE of the Act. The invoking of S. 115BBE is contrary to the provisions of law, on facts and without jurisdiction. The appellant totally denies its liability. The tax liability so created, kindly be deleted in full. 5. The ld. CIT(A) erred in law as well as in facts of the case in confirming the levy of interest u/s 234A, 234B, 234C & 234D of the Act. The levy interest being charged, is contrary to the provisions of law and facts, kindly be deleted in full. 6. The appellant prays your honor indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing." 2. We find that as per order sheet placed in the case file, the appeal was....
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.... clarify why the cash deposit in assessee's bank account should not be treated as unexplained u/s 69A of the Act. The assessee vide its various replies explained that the cash deposited was derived from the prior withdrawals from the assessee's own bank account. Despite this, the AO observed that the cash book provided by the assessee was an afterthought, created just to justify the cash deposit made by the assessee during the year under consideration. The AO while discussing these cash deposit observed the following:- * On perusal of the cash book, it is seen that the assessee withdrew cash on different dates and has also deposited cash on different dates from his bank account. However, there is gap between the date of withdrawal and date of deposit. * The assessee's books of account are not audited and the cash book s not acceptable. Secondly the assessee is not required to maintain to cash book. * The assessee is a man of high Net worth and allocation of Rs. 20,000/- per month only towards house hold expenditure is not justifiable. He is partner in three firms namely Noble Dyers, Shyam Sunder Minerals, Associated Exports and getting huge profit from these firms as share o....
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....observing in para 6.5 and 6.6 page 15 of his order as under:- "6.5 As the assessee has not substantiated the source of cash deposits, the assessment was completed by AO adding entire cash deposits in the background of lack of documentary evidence. Even before the CIT(A)'s the assessee has not submitted any documentary evidence in support of the claim. 6.6 The main claim of the assessee is that the AO has added income from cash deposits to the income filed by the assessee. On going through the submission of the assessee and the assessment order it is clear that the assessee has not submitted any details to the AO or this office on why the income should not be as adopted by the AO. No documentary proof that such submission were made are submitted to this office. It is the duty of the assessee to explain to the satisfaction of the AO or appellate authorities on why such receipts are not to be treated as income. As the assessee has not provided with any documentary proof or logical explanation on why the same could not be added, the action of the AO in adding such receipts as income is right. In the above background it is very clear that what AO has done is as per law and I do not ....
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.... a specific reliable and meaningful (Non vague) is in possession of the ld. AO, there was no existing reason i.e. cause or justification to have a reasonable belief. Surprisingly, no exercise at all was done by him, to further enquire into the information received. Thus, he did not have a bona-fide and honest reason to believe. 1.5 Based on the facts of the present case, it is clear that all the documents including the cash book (PB 29-32) &bank statements (PB 16-28), were originally submitted to the authorities below. The cash deposited was out of the cash withdrawals from the bank on different dates which can be understood from the table below. Therefore, there exist no reason for the ld. AO, even to suspect or to believe and invoke S. 147 of the Act. Hence, the invocation of S. 147 of the Act itself is incorrect and notice u/s 148 of the Act deserves to be quashed. 2. Source Fully Explained: At the outset it is submitted that the Assessee has duly and fully explained the source of cash deposit of Rs. 12,30,000/- made in the bank account during A.Y. 2016-17 with the help of the regularly maintained cash book on day-to-day basis and bank statement. It cannot be disputed that....
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.... of account are not audited and the cash book is not acceptable. He further alleged that the assessee is not required to maintain cash book andkeeping in view the contention of ld.AO it may be submitted that though the assessee is not required to maintain cash book as per law but it doesn't mean that by maintaining cash book, he has committed any offense. Just because that the law does not require him to maintain the books of account the ld. AO cannot consider the cash book unacceptable without bringing any contrary evidence on record. It clearly shows that the addition has been made by the ld. AO arbitrarily without pointing out any defects in the cash book produced during the course of assessment proceedings. 3.2 Supporting Case Law: A reference has been made to the decision of Hon'ble Delhi ITAT in the case of Mool Chand Aggarwal vs. ACIT ITA No.1786/Del/2022 whereby it was heldthat: CIT (A) cannot disbelieve cash book only on the ground that "generally individual" do not maintain cash book and it is not mandatory to maintain cash book for the individual. 3.3 Further it was alleged by the AO that "cash withdrawn was spent by the assessee however to make source of cash de....
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....he dates of withdrawal and deposit of cash in the assessee's bank account. The ld. AO has drawn a conclusion that since there exists a significant gap between the withdrawal and subsequent deposit of cash, its implies that there exist Ain consistency in the financial transactions. However, this conclusion is factually incorrect and contrary to the evidence available on record. A perusal of the Cash Book maintained by the assessee clearly demonstrates that there is no substantial gap between the dates of withdrawal and deposit. The gap between the dates of withdrawal and deposit in certain instances is no more than 15 to 20 days, which is not unusual or abnormal in the normal course of business operations. It is well established that a reasonable period between withdrawal and deposit of cash does not, in itself, raise any presumption of the funds being unaccounted or improperly utilized. The gap of 15 to 20 days in the present case is consistent with routine cash management practices and cannot be considered as unusual or suspicious until the AO brings any contrary evidence on record. Therefore, the conclusion drawn by the ld. AO on this ground lacks merit and should be disregar....
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.... cash and thereafter depositing cash out of the same into the bank account, so that appropriate transaction may be reflected in the bank account. Later on, the assessee started a proprietary firm in the name of M/S Mystique Ventures and he made continuing efforts to get some viable project during the year under consideration. The ld. AO in the assessment order at pr. (5) at pg. no. (4) stated that these transactions were fictitious and done with the intention to cheat the bank for obtaining loan/finance and it was illegal. From the aforesaid apprehension of the ld. AO it seems that he himself cooked a story just to make a high pitch assessment. The transactions done by the assessee were genuine and within the four corners of law. All the cash deposited time to time was out of the cash withdrawals from the bank and no other cash was received, hence nexus/link is very much established. In view of the above it is crystal clear that the assessee has fully explained the source of deposit of cash into the bank account and as such nothing remained unexplained. Therefore, under the above facts and circumstances the addition of Rs. 12,30,000/- made by the ld. AO and confirmed by CIT (....
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.... availability of funds with the assessee from the sale proceeds of jewellery belonging to his mother- in-law, receipt from a party and also the amount of opening balance and savings from earlier years and deleted all the additions-Findings recorded by the Tribunal are purely findings of fact-There is no reason to interfere with the same-No substantial question of law arises-CIT vs. Pradeep Shantaram Padgaonkar (1983) 143 ITR 785 (MP) relied on" 4.2.2 Also refer CIT vs Kulwant Rai (2007) 210 CTR 380 (Delhi) para 16-17, wherein it was held as under: "Search and seizure-Block assessment-Computation of undisclosed income-Cash found during search-Assessee had withdrawn Rs. 2 lakh from bank some time back and there is no material with the Department to show that this money had been spent and was not available with the assessee-Tribunal has found that the withdrawals shown by the assessee are far in excess of cash found during the course of search- In the absence of any material to support the view that the entire cash withdrawals must have been spent by the assessee, Tribunal was justified in holding that the addition was not sustainable-Order of the Tribunal does not give rise to a ....
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....tion of Rs. 6.00 lacs which is deleted. Thus Ground No. 2 of the assessee is allowed." "Apropos low house hold withdrawals, the assessee is an active person, earning from two partnership firms. It has been contended that his two sons have borne the house hold expenses and have sufficient withdrawals. There is no evidence on record to demonstrate that quantum of withdrawals by two sons and statement to the fact that their father did not contribute any house hold expenses. Beside the size of their family and extent of house hold withdrawals have no evidence on record to hold that assessee's version is correct. Thus in these facts and circumstances of the case assessee's explanation is not corroborated by any iota of evidence. In view thereof, we hold that an addition of Rs. 1.00 lac on account of house hold withdrawals has rightly been made by the lower authorities which is upheld. Thus Ground No. 3 of the assessee is dismissed." 5. Onus on the AO - not discharged: 5.1 Unless the availability of the cash is proved to have been utilized elsewhere or is proved to be non-existent prior to the deposits in bank, the AO was not legally justified to suspect and make addition. 5.....
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....herefore, income added u/s 68 or 69 of the Act etc. has to be given a specific head in terms of S. 14 of the Act, however, since there is no income as such which could be added u/s 68,69, 69A of the Act etc. hence there is no question of invoking of S.115BBE of the act. 1.2 Supporting Case Law: 1.2.1 A reference has been made to the decision of Hon'ble Supreme Court in the case of Karanpura Development Co. Ltd vs. CIT [1962] 44 ITR 362 (SC)whereby it was held that: "these heads are in a sense exclusive to one another and income which falls within one head cannot be brought to tax under another head". 1.2.2 Further, to rely more upon in the case of Nalinikant Ambalal Mody v CIT [1966] 61 ITR 428 the Hon'ble Supreme Court held that: "Whether an income falls under one head or another is to be decided according to the common notions of practical man because the Act does not provide any guidance in the matter. Of course, lot of judicial precedents are available to a taxpayer to arrive at a conclusion about determination of appropriate head of income. There apart, there are many decisions available taking such a view in favor of the assessee on dated 21.12.2019 when the subject....
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..../26.07.2022 w.r.t A.Y. 2016-17 as reckoning 3 years falls on 31.03.2020 respectively hence, the same is beyond the time permissible as per the as per the existing provisions of law. 1.3 A bare reading of the proviso to Sec 149(1)(b) clearly indicate that the alleged escaped taxable income must be Rs. 50 lakh or more then only the benefit of the extended time limit is permissible. Further, the normal limitation period expires on the completion of 3 years from the end of relevant AY which is 2016-17. Since, in this case there is no taxable income escaped assessment (or escaped income Rs. 12,30,000/- is below Rs. 50 Lakh, if assumed), only normal period of limitation of 3 years shall apply if so required. Hence the impugned notice u/s 148 is barred by limitation and deserves to be quashed. The above submissions have been made based on the instructions and the information provided of/by the client." 7. On the other hand, the ld. DR supported the orders of the Revenue authorities. 8. We have heard rival submissions, perused the material on record and gone through the orders of the lower authorities. Ground no. 1 & 2 relate to challenging the initiation of proceeding u/s 147/148 of....
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.... month. Considering his worth and stature it is quite possible that money withdrawn from banks are utilized towards house hold expenses. In the assessment order of the assessee's own case for AY 2017-18 was perused and it was found that during the assessment proceeding for that year the assessee, while justifying the cash deposited in his account during the demonetisation period, had submitted that the total withdrawal for the period 01.04.2013 to 01.11.2016 was Rs. 6,41,000/- only and out of that he saved Rs. 1,95,000/- to deposit it during the demonetisation period. The above submission of the assessee was rejected by the assessing officer for that year. Thus it is seen that the assessee is in habit of showcasing utilisation of cash withdrawals for any reason, which suits his purpose best. The assessee is in habit of allocating lesser amounts towards house hold expenses out of cash withdrawals. It is quite improbable, unrealistic and astonishing that a prudent person will withdraw money from his bank account only for depositing it on later date, thus the contention of the assessee that withdrawn money was subsequently deposited is not acceptable as the assessee has not furnished ....