TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 129
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....as selected for scrutiny through CASS. Accordingly, notices u/s. 143(2) and 142(1) of the Income-tax Act, 1961 ("the Act" for short) were issued and served on the assessee through e-portal. Assessee is the director of a company M/s. Aqua Plumbing Pvt. Ltd. Mathura and getting salary from the same company. He has also partner in combined Industries and General Plumbings, Mathura. The selection of the assessee's case for scrutiny was for the reason that large value of cash deposits were made during the demonetization and undisclosed income reported by PCIT. Assessee was asked to submit the relevant information as per the format provided for disclosing cash deposits in the bank. In response, the assessee has submitted relevant details as per the format. During the assessment proceedings, the assessee has disclosed that the source for cash deposits during demonetization is the amount surrendered by the assessee in assessment year 2014-15 in the survey proceedings initiated in that assessment year and the same was disclosed by him in statement recorded u/s. 131 of the Act. After considering the detailed submissions given by the assessee, the Assessing Officer found it not acceptable. He....
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....thout appreciating that provisions of said Section are not at all applicable in the case of the Appellant. 7. BECAUSE, the order has been passed without providing due opportunity to the appellant and therefore same is bad in law being passed without following principles of natural justice. 8. BECAUSE, the Ld. CIT(A) erred in observing that the appellant could not justify the link between surrendered amount of survey proceedings & cash deposited during demonetisation as the same was explained in detail in the Written Submission filed which was supported with cash flow statement. 9. BECAUSE, while passing the assessment order the 'AO' erred in observing that the appellant has changed his stand and further erred in not accepting the explanation given by the appellant to explain the source of cash deposited. Thus, assessment order passed and addition made therein is in violation of principles of natural justice. 10. BECAUSE, the assessment order to the extent making addition is bad in law and against the facts of the case. 11. BECAUSE, assessee denies its liability against Interest charged under section 234A based on incorrect assump....
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.... not materialize, and accordingly was returned to the assessee in A.Y. 2016-17. This cash was thereafter deposited in the bank account of the appellant. The statement was unambiguous and leaves no scope for alleging any inconsistency and banking thereon for making the addition. 12. While framing the assessment order, the Ld. AO has failed to bring any evidence whatsoever to show that the out of the surrendered amount Rs. 75,00,000/- had already been utilized, deposited in some other account, or invested elsewhere. In the absence of any such finding supported by evidence, the conclusion drawn by the Ld. AO that the cash deposit was unexplained is wholly untenable. It is settled law that the burden lies on the revenue to disprove the explanation of the assessee when the assessee has discharged his initial onus. Mere conjectures cannot be a basis for addition. 13. The learned CIT(A) has also failed to consider the specific submissions of the appellant and has mechanically confirmed the addition by simply relying on the assessment order. This approach is contrary to the settled principle that the first appellate authority is required to independently evaluate the fact....
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.... there was sufficient cash available to be deposited in the bank. The revenue has failed to establish that the amount disclosed in the survey was invested/spent somewhere and the same was not available with the assessee to be deposited in the bank. Since the assessee has already disclosed more than Rs. 30 lacs which is sufficient to explain the cash deposited in bank, therefore, we find no merit in making the addition. Rs. 6,30,000/- which has been surrendered by the assessee during survey operation itself and assessment should restrict to that extent only." 18. The Ld. CIT(A) while confirming the addition has observed that Assessee cannot be expected to hold huge cash in hand for a long period and therefore, the explanation of the appellant that Cash deposited in Bank during Demonetization was sourced from Surrendered Cash during A.Y 2014-15. Hon'ble Karnataka High Court in the case of S.R. Ventakaratnam Vs CIT (1981)127 ITR 807 (Karnataka) has observed as under: "There is some force in the argument of the learned counsel for the petitioner and the argument advanced by the revenue is, therefore, without any force. Once the petitioner-assessee disclosed the source....
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....on a question of fact is open to attack under s. 66(1) as erroneous in law when there is no evidence to support it or if it is perverse" 21. Hon'ble Supreme Court Judgment in the case of CIT vs. DaulatramRawatmal (1973) 87 ITR 349 (SC) holding that onus of proving what was apparent is not real is on the party who claims it to be so. There should be some direct nexus between the conclusions of fact arrived at by the authorities concerned and the primary facts upon which the conclusion is based. Use of extraneous or irrelevant material in arriving at the conclusion would vitiate the conclusion of fact, because it is difficult to predicate to what extent, the extraneous and irrelevant material has influenced the authority in arriving at the conclusion of fact. 21.1 Similar observation has been made by the Hon'ble Supreme Court in the case of Kishan Chand Chelaram vs. CIT (1980) 125 ITR 713 (S.C.). Wherein the Hon'ble Supreme Court has held that the burden is on the department to show that the money belonged to the assessee by bringing proper evidence on records and the assessee could not be expected to put in the evidence to help the department to discharge the burde....
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....ash declared by him in survey proceedings after three years. Therefore, the assessee has not justified and brought on record the source of making deposits during demonetization period. 8. Considered the rival submissions and the material placed on record. From the submissions and facts brought on record, we observe that the assessee has deposited cash during demonetization period to the extent of Rs. 75,00,000/-. It is also brought to our notice that the assessee has surrendered an income of Rs. 1.30 crores during the survey proceedings initiated in assessment year 2014-15. Assessee has disclosed the source of cash deposited during the year under consideration that the assessee held the cash, which was disclosed during the survey proceedings to the extent of Rs. 1.30 crore and he has deposited portion of the same during the demonetization period. After considering the facts available on record, we observe that similar issue was considered by the Hon'ble Karnataka High Court in the case of S.R. Ventakaratnam vs. DCIT (supra) and the Hon'ble High Court decided the issue of delay in depositing the cash, in this regard, it has observed as under :- "There is some force in th....