TaxTMI 
TaxTMI 
2026 (3) TMI 1217
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....t Rs. 7,09,000/-. The addition of Rs. 5,00,000/- was made under section 69A [Para 3 of assessment order] of the Act. That the aforesaid assessment order bears number: - ITBA/AST/S/143(3)/ 2019-20/1021453232(1) and that the same is dated 01.12.2019 which is hereinafter referred to as the "impugned assessment order". 2.2 That the core reason for making addition in the "impugned assessment order" at para 3 is below: - "3. All of the assessee's reply have been seen and perused on portal. Perusal of record reveals that the ITR for F.Y. 2016-17 was also filed after the demonetization period on 28.01.2017 at the income of Rs. 7,55,760/- in which income is declared from rental income and income from business of stitching, embroidery and pressing at Rs. 4,50,000/- on presumptive basis. Perusal of ITR and computation for A.Y. 2015-16 filed on 31.12.2015 before demonetization reveals that no such income was offered by the assessee in that A. Y. from business of Stitching, Embroidery and pressing work. Bills of stitching machine and Steam iron produced by the AR reveals that they were ranging from 2010 to 2014 i.e. before A.Y. 2015-16. However, no income was offered from the so....
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....Tax and interest are payable as per ITNS 150, which is a part of this order. Penalty proceedings Notice u/s 271AAC issued." 2.3 That the Assessee being aggrieved by the aforesaid "impugned assessment order" prefers the first appeal under section 246A of the act before the Learned CIT(A) who by the impugned order has dismissed the first appeal of the assessee on the grounds and reasons stated therein. The core grounds and reasons for the dismissal of the first appeal were as under :- 7.4. The submissions of the appellant are considered. The fact of the case is that, the appellant has made cash deposit of Rs. 8,00,000 in the bank accounts held by the appellant during the demonetization period. In respect of the source of the said cash deposit, the appellant had furnished the cash flow statement, wherein the source for cash includes cash withdrawal from earlier years, accumulated saving and earlier year income. However, the submissions of the appellant were considered as afterthought by the assessing officer and not accepted. However considering the age of the appellant, the assessing officer has accepted that Rs. 3,00,000 as out of past savings and held that the balance s....
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....tioned utilisation for household expenses for a sum of Rs. 1,20,000 during the FY 2014-15. Hence, even the said sum is not available for the appellant for subsequent cash deposit. Further in this regard, the appellant has submitted that, a notarised affidavit was submitted and also relied on the decision of the Hon'ble Tribunal Indore in the case of Imran Sherkhan Vs ITO. The said Jurisdictional decision is not applicable in appellant's case. Since, the cash was not withdrawn "Self" but by third parties, it proves that, the cash withdrawal is not for the purpose of utilization by the appellant. Further in this regard, reliance is placed on the decision of the Hon'ble Tribunal Hyderabad in the case of Mir Basjeeruddin Ali Khan reported in 42 taxmann.com 69 (2014), wherein the Hon'ble Tribunal has held that, "We have heard the submissions of both the parties and perused the material on record as well as the orders passed by the revenue authorities. Undisputedly as revealed from the bank account, the assessee has made SKJ cash deposit of Rs. 6,50,000/- on 8-9-2004. It is the contention of the assessee that the aforesaid deposits were out of the cash available ....
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.... and for a sum, of Rs. 3,84,000 in FY 2016-17 (AY 2017-18) reported in the ITR as "Misc, receipts". However it is seen that, for FY 2014-15 (AY 2015-16), being an year part of the cash flow statement, the appellant has not reported any income out of such Stitching, Embroidery and Pressing charges. Further, it also clear that, Rol for FY 2014-15 (AY 2015-16) was filed on 31-12-2015 before the demonetisation period. However, the Rol for AY 2016-17 and AY 2017-18 were filed after the demonetisation period and after the cash deposit was made. Hence, as rightly pointed out by the assessing officer, the appellant has reported this income only to bring the unaccounted cash of the appellant into the books and it is an after-thought arrangement by the appellant assessee. 3. Incomplete cash flow statement :- The appellant has reported income in ITR for AY 2015-16 (Rs. 5,41,640), AY 2016-17 (Rs. 7,55,660), AY 2017-18 (Rs. 7,09,000). However the appellant has not considered the entire income reported in ITR, in the cash flow statement, evidencing that, the appellant has picked and chosen few entries for its convenience to arrive at the value of cash deposited during the demon....
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....uring the demonetization period by treating it as unexplained money under section 69A r.w.s. 115BBE of the Income-Tax Act, 1961 without properly appreciating the facts of the case and submissions filed by the appellant even when source of cash deposit was duly explained during the course of assessment proceedings and appellate proceedings itself. 2. That on the facts and in the circumstances of the case and in law, the Ld Assessing Officer erred in computing the amount of tax liability by invoking the amended provisions of section 115BBE of Income-Tax Act, 1961 even in respect of cash deposited in the bank accounts prior to 15-12-2016 i.e. prior to the date of obtaining assent from the President of India and henceforth, applicability of the amended provisions of section 115BBE of the Income- Tax Act, 1961 in respect of this addition was grossly unjustifiable and wholly unwarranted. 3. The appellant reserves the right to add, alter and modify the grounds of appeal as taken by her." 3. Record of hearing 3.1 The hearing in the matter took place before this Tribunal on 19.1.2026 when the Ld. AR for the assessee and on behalf of the assessee appeared before this ....
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....urchases] which were doubted. Our attention was then invited to paper book pages 35 to 46 which are copies of few sales bills/job charges issued by the assessee to customers. With regards to the impugned order of ld. CIT(A) it was submitted that due weightage is not given for withdrawal of cash amount. Our attention was invited to the internal page 19 of the impugned order with regard to the amount of Rs. 4,70,480/-. The Ld. AR submitted that Mr. Santosh, Mr. Manohar and Mr. Purjeet whose names are appearing in the bank account are the persons who had actually withdrawn the money from the bank rest of two entities are of self [Assessee]. It was submitted that in normal banking transactions against the cheques of withdrawal the person who actually goes to the bank his/her name is recorded, if the cheques are not crossed account payee cheques (page 19 of impugned order). It was finally submitted that Ld. CIT(A) has misunderstood the cash flow statement and has made mistake in reading the same. Cash flow statement was to be given the due benefit. The Ld. AR finally submitted that he relies upon synopsis which is reproduced by us as below:- BEFORE THE INCOME TAX APPELLATE TRIBUNAL, ....
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....e genuineness of the cash flow statement submitted by the appellant before the Assessing officer as incomplete in nature. However, the said observation of the Ld CIT(A) was factually not correct. Since, entire receipt in cash was duly incorporated in the cash flow statement. 6] The Appellant in support of her contention submitted as under :- 6.1] Cash flow statement was submitted before the AO (P.No 48) and also before the Ld CIT(A) (Inner Page No 17) 6.2] The Assessing officer allowed credit on account of saving during 20 to 25 years of marriage life and no credit was allowed in respect of cash withdrawal from the bank and cash income as shown by the appellant in the Asst Year 2016-17. 6.3] The assessing officer has not allowed credit of cash income as shown in the income tax return for the Asst Years 2016-17 & 2017-18 on account of Stitching, Embroidery & Pressing and the same time total income as declared by the appellant was not reduced by that amount. Hence, the said amount of income was taxed twice. 1 6.4] That as per cash flow statement as submitted cash balance available as on 08-11-2016 was of Rs. 8,68,777/-. Hence, source of cash deposi....
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....g as adversial :- 1. ITR for assessment year 2016 - 17 filed after the demonetization on 28.1.2017 2. Sources of income are from rental income and income from the business of stitching embroidery and pressing. 3. Perusal of ITR for assessment year 2015-2016 before the demonetization reveals that no income was offered by the assessing from stitching, embroidery and pressing. 4. Bills for stitching machine and steam iron ranges from 2010 to 2014 which period is before assessment year 2015-16. 5. The story of business of stitching embroidery and pressing after the demonetization is coined story. It is shown in the ITR for A.Y. 2016-17 for the first time. 6. The above fact at (4) and (5) above is a created story to explain the sources of Rs. 8,00,000/-. It is just an after thought framed to hide the truth behind the glass cover but deficiency's in the picture are vital that the picture is seen crystal clear even behind the glass. 7. Receipt of rupees 500 and rupees 1000 notes for miscellaneous stitching work is improbable exercise. Stitching income is a ploy to explain the cash deposited during demonetization period. ....
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....Para 7.7 of the Impugned Order Which too is reproduced by us in Para 2.3, we are in the agreement with the view of ld ClT(A). The withdrawal of Rs 1,61,880 by Mr. Santosh Kumar on 16/10/2014 of Rs 100000 by Mr. Manohar on 31.12.2014 & Rs. 100000/- by Mr. Purjeet on 01/1/2015 cannot be said to be withdrawals of Assessee as claimed by the Ld. AR. Whenever the Assessee herself wanted to do so [withdrawals] she has done it Say on 21/10/2014 of Rs 44,300/- and on 18/12/2024 of RS. 64,300/-. Hence the theory canvassed that these persons actually went to the bank and withdrew the money by bearer Cheque is a ploy deployed lo explain source of Cash Deposit of Remaining Rs. 5 lakh. The Contention of Ld.AR is Rejected. [Generally bank in withdrawal of Rs. 50,000 by bearer Cheque takes PAN Nos. too] We therefore, upheld the Reasoning Canvassed by Ld.CIT(A) in para 7,7 & find No Infirmities. The ld AR has failed to demolish the reasoning of ld CIT(A) with any Convincing Arguments. No Details of Mr. Santosh kumar, Mr. Mahohar & Mr. Purjeet have been Placed on Record to justify the Say of the Assessee. 4.8 With Regard to the finding of order Id ClT(A) in the Impugned order under title "2 Incom....
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....ied woman for 20-25 years beyond this indulgence what else the assessee expects ? The expectations of assessee for complete relief even for the balance amount of 5 lakh is farfetched and does not meet ends of justice too as income must be computed on real time basis and which both lower authorities have rightly done so. The arguments of embroidery, stitching and pressing have no place in law [without proofs] with due respect to the contention of Ld. AR in this matter. The onus is on the assessee to prove that cash deposited during demonetization came from business's, cash-in hand, sales or regular business operations with proper supportings. 4.10 The bare assertions are insufficient the assessee must provide detailed cash flow statement, sales invoices and stock registers to prove that the cash generated was from the specific business activity. 4.11 The assessee has not been successfully able to establish cash deposit by combination of opening cash balance, daily sales/ job receipts and bank withdrawals. Hence undisclosed income is proved. 4.12 The assessee has not able to establish sudden spike in cash sales by any tangible material worth credence. How much material c....