TaxTMI 
TaxTMI 
2026 (2) TMI 196
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....e ground stated above the addition made by the learned AO, and subsequently upheld by the honourable CIT(A), be held to be high and unreasonable and be suitably reduced. Ground 3. The appellant craves leave to add, amend OR alter any Ground of Appeal before or during the course of appellate proceedings." 2. Although the Ld. DR for the Revenue had filed an application seeking adjournment, however, during the course of hearing, when the Ld. AR for the assessee submitted that he had travelled from Jaipur to Indore and that the appeal involved limited facts and issues for adjudication, the Ld. DR for revenue fairly agreed not to press the adjournment request and consented to proceed with the hearing. Accordingly, the hearing was proceeded. 3. The background facts leading to present appeal are such that the assessee-individual filed his return of income of AY 2016-17 declaring a total income of Rs. 6,50,600/- from business of fabrication work; income from partnership firm "M/s Hindustan Sales Industrial Corporation"; capital gain and other sources. The case of assessee was selected under scrutiny and the AO issued statutory notices u/s 143(2)/142(1) which were complied by....
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....ment was justified in treating same as assessee's income under section 69A, CIT v. K. Chinnathamban [2007] 162 Taxman 459 (SC). Since entire amount was deposited in assessee's accounts in lump sum manner, and he was not prepared to disclose source of its receipt satisfactorily, it could be presumed that assessee was owner of entire money, and he having failed to prove that money did not belong to him, authorities were right in assessing him under section 69A - M. Sundaramv. Asstt. CIT [2007] 161 Taxman 54 (Mad.) 5. Assessee must prove the source of receipt - The law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him. If he disputes the liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempted from taxation under the provisions of the Act. In the absence of such proof, the Revenue is entitled to treat it as taxable income. To put it differently where the nature and source of a receipt, whether it be of money or of other property, cannot be satisfactorily explained by the assessee, it is open to the Revenue to hold that it is the income of ....
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....Rs. 2,78,23,000/- were made from the SBBJ account. Out of this Rs. 94,00,000/- was deposited into the SBI account. The appellant also states that the cash withdrawals of Rs. 11,95,000/- from the SBI account, out of which Rs. 9,00,000/- was deposited back into the same account. It is pertinent to mention here that the appellant failed to provide cash flow statement to link the specific withdrawals to the specific deposits, particularly the large deposits. The mere claim that withdrawals were made and subsequently deposited does not prove the source of deposit. Further, the appellant's reliance on the share of profit from the partnership firm as the ultimate source of funds is also not a direct explanation for the cash deposits. While the funds from the firm may have been the initial source of the withdrawals, the link between the cash withdrawals and the subsequent cash deposits remains unsubstantiated. The Hon'ble Madras High Court in M. Sundaram v. Asstt. CIT [2007] 161 Taxman 54 (Mad.) held that where the assessee fails to disclose the source of deposit, it can be presumed that the assessee is the owner of the money and the authorities are justified in assessing ....
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....eemed income covered under the provisions of Section 69A of the Act in view of the scheme of those provisions. For application of Section 69A of the Act, two conditions are required to be satisfied. They are: (i) Investment/expenditure is not recorded in the books of account of assessee; (ii) The nature and source of acquisition of assets or expenditure are not explained or not explained satisfactorily; The expression "nature and source" used in this section should be understood to mean requirement of identification of source and its genuineness. To explain "Nature" it would require the assessee to explain what is description of investment or expenditure, period and the manner in which it was done. To explain the source, it would require the assessee to explain the corpus or fund from where investment or expenditure has been met. 5.2.3 In the present case, the nature and source of such Deposits made in the bank account was not at all explained, leave alone satisfactory explanation. Further, for invoking deeming provisions under Section 69A of the act, there should be clearly identifiable asset or unexplained Money. It is amply proved beyond doubt....
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.... large sums of money to meet emergency and that the sum of Rs. 50,000/- realised by encashment of the notes was neither profit nor part of profit but was floating capital for the purpose of conducting business. The Income-tax Officer did not accept this explanation and treated this amount as profit from some undisclosed source and assessed it as assessable income. In Manindranath Das v. Commissioner of Income Tax, Bihar & Orissa, the tax-payer had encashed Notes of the value of Rs. 28,600, which he contended were his accumulated savings. His explanation was accepted in respect of Rs. 15,000, because 15 notes could be traced to a bank, but was rejected in respect of the balance. The Patna High Court pointed out that if an assessee received an amount in the year of account, it was for him to show that the amount so received did not bear the character of income, and the tax-payer in the case had failed to prove this fact in respect of the remaining notes. The Hon'ble Supreme Court has held that 'The cases involving the encashment of high denomination notes are quite numerous. In some of them the explanation tendered by the tax-payer has been accepted and in some it has been re....
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....the AO and decided the appeal in favour of the revenue. The head note of the decision is reproduced as under:- "Section 69A, read with section 148, of the Income-tax Act, 1961 Unexplained moneys (Reassessment) Assessment year 2017-18 - Assessee filed his return of income showing an income of certain amount Case of assessee was selected for limited scrutiny raising queries regarding cash deposit of Rs. 28.75 lakhs made by assessee during demonetisation period in 'C' bank Further, an assessment order was passed making an addition of Rs. 28.75 lakhs to returned income of assessee Assessee preferred an appeal against same During pendency of appeal, revenue issued a reassessment notice on ground that assessee had failed to satisfactorily explain source of fund for cash deposit of Rs. 12.50 lakhs made by assessee in 'PN' bank - It was noted that cash deposit of Rs. 12.50 lakhs was not adjudicated upon during original scrutiny proceedings assessee had only mentioned detail of cash deposited in 'C' bank In income-tax return, account and had not mentioned cash deposits in any other bank accounts - Whether, on facts, impugned reopening notice issued against a....
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....nto the bank account. The assessee has also not shown any valid reason as to why he kept so much cash with him for over a period of one year when he was holding a bank account. In the absence of any cogent reason backed by sufficient evidence, the explanation of the assessee is only a make-believe story and hence cannot be accepted. The decisions relied upon by the learned AR will also be of no help to the assessee as in the present case the assessee has failed to prove the source of deposit with valid reasons and proper evidence. In this view of the matter, we do not find any infirmity in the order of the CIT(A) in sustaining the addition of Rs. 6,50,000/-. Accordingly, we uphold the order of the CIT(A) by dismissing the ground raised by the assessee. 15. In the result, the appeal by the assessee is hereby dismissed." 5.3.3 It is also relevant to refer to the Decision of Hon'ble ITAT Bangalore in the case of Karan Sharma v. ITO in ITA No. 465/Bang/2018 wherein it is held as under: "6. The assessee has explained that Rs. 92,54,462 is out of previous withdrawals and sale of garments and pleaded that it is to be excluded from the taxation. The assessee ....
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....ds of cash withdrawals of Rs. 40,000/- on 09.02.2016 (+) Rs. 8,00,000/- on 09.02.2016 (+) other small savings/withdrawals made earlier. Therefore, the deposits have been made from assessee's own sources of cash withdrawals. He also narrated that the purpose of making withdrawals from bank was to settle a family dispute but final conclusion cannot be arrived and the withdrawn money remained unutilized partially, hence the assessee had to re-deposit the same. He submitted that the gap between cash withdrawals and cash deposit is just 1-2 days in first tranche of deposit Rs. 94,00,000/-. Further, the gap between cash withdrawals and deposits in second tranche of Rs. 9,00,000/- is about one month and some days, which is also normal. He relied upon certain decisions of ITAT Benches, more particularly the decision of ITAT, Bangalore in Smt. Vinatha Madhusudan Reddy Vs. ACIT, ITA No. 257/Bang/2018 to contend that the cash deposit out of previous cash withdrawals has to be accepted. In so far as the original source of funds received in bank a/c from which the cash withdrawals of Rs. 1,90,00,000/- were made by assessee on 07.04.2015 & 08.04.2015, Ld. AR submitted that the assessee received ....
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.... 15,000 - 22/12/2015 15,000 - - - 30/12/2015 10,000 - - - 31/12/2015 10,000 - - - 07/01/2016 1,000 10,000 - - 08/01/2016 17,000 10,000 - - 19/01/2016 - 15,000 - - 20/01/2016 - 30,000 - - 04/02/2016 - 40,000 - - 09/02/2016 - 8,40,000 - - 10/02/2016 - 40,000 - - 10/03/2016 - 20,000 - - 12/03/2016 - 40,000 - - 14/03/2016 - 40,000 - - 21/03/2016 - - - 8,00,000 22/03/2016 - 40,000 - - 25/03/2016 - 40,000 - - 30/03/2016 - - - 1,00,000 2,78,23,000 11,95,000 36,800 1,03,00,000 However, the Ld. CIT(A) has basically quoted the provision of section 69A of the Act and certain judicial rulings and rejected assessee's claim without giving judicious thought to the assessee's facts. 9. Per contra, Ld. DR for revenue relied upon the orders of lower authorities. 10. We have considered rival contentions of both sides and perused the orders of lower-authorities as well as the material held on record to which our atten....