TaxTMI 
TaxTMI 
2025 (3) TMI 1885
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.... and mistakes. 3. The appellant submits that the deficit cash balance of Rs. 2,24,355/- in December, 2016 arrived at by the assessing officer was taken both while working the unexplained cash deposit as well as while working the cash availability for the next month viz. January, 2017. 4, The appellant therefore submits that the addition made by the assessing officer should be reduced by this sum of Rs. 2,24,355/-. 5. The authorities below erred in not giving credit of Rs. 2,25,000 being the rental advance taken by the appellant simply because of want of confirmation. 6. The appellant submits that the rental advance was duly reflected in his balance sheet and further submits that it is normal practice of receiving rental advance when the property was let out and the rental income shown by the appellant was also accepted by the assessing officer. 7. The appellant therefore prays that a sum of Rs. 2,25,000/- may be allowed as available for cash deposit in the bank account. 8. The authorities below further erred in not allowing the withdrawal of Rs. 6,50,000/- drawn from the firm M/s Sesha Sai Herbals in which the appellant is a par....
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.... 3. The assessee is an individual filed her return of income on 28.10.2017 admitting total income of Rs. 30,94,490/-. The case was selected for limited scrutiny under CASS to verify the "cash deposit during the year" and the AO issued statutory notices accordingly. The assessee submitted before the AO that she is a retired government officer and carrying on the business of manufacture of herbal medicines as a partner in M/s. Sesha Sai Herbals (PAN-ACKFS1677D). The assessee furnished bank statements held in IOB and Canara Bank and filed a cash flow statement explaining the source of cash for the cash deposit made in the bank account. However, the assessee stated that no books of accounts maintained for herbal business carried on by her. 4. Since, the complete details of cash flow was not provided by the assessee the AO recomputed the cash flow statement from the available records for the F.Y.2016-17 and found the deficit of cash of Rs. 81,78,522/- compared to cash deposits made and added the same u/s.69A r.w.s 115BBE of the Act as unexplained money and brought to tax by passing an order dated 10.12.2019. 5. Aggrieved by the order of the AO the assessee preferred an appeal b....
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....its are from business of herbal medicines. During the course of appellate proceedings, it is submitted 2.76 acres of land was purchased on 25.01.2017 along with her husband and the payments of land has been made in June 2016 itself and the 50% share of her husband Rs 59,20,000/- was deposited in her account. But the appellant had not furnished any documentary evidence towards the sources of the such huge cash of her husband. It is also mentioned that she had received cash of Rs. 16,00,000/- for late payment to trade creditors. No evidence was filed in this regard also. The main reason for selection was cash deposit. 5.3.2 In the appellate proceedings, burden of proof lies on the assessee to prove that facts and findings of the AO are incorrect. If the assessee fails to prove or rebut with cogent evidence against such facts and findings, no interference is required with assessment order. In the instant case, the cash has been deposited in his bank account and he is the owner of the cash deposited and he is having the possession of this cash. The burden of onus is on the assessee to prove the sources for the cash deposits. If it is withdrawn and re-deposited in the bank acco....
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....missed as infructuous. 7. In the result, the appeal is 'dismissed'." 8. Aggrieved by the order of the ld.CIT(A) the assessee challenged the same before us. 9. The ld. AR for the assessee assailing the action of the ld. CIT(A) submitted that the ld.CIT(A) has erred in not considering the details and explanations in support of the source of the cash submitted during the appellate proceedings. Further, the ld.AR submitted the following written arguments before us: "The above appeal was filed against the addition of Rs. 81,78,522/- representing cash deposited in the bank account treated as unexplained money under section 69A of the Act. The appellant however seeks relief to the extent of Rs. 61,42,031/-. The appellant submits that the assessing officer has arrived at the unexplained cash deposit by drawing a cash flow statement on his own which is extracted in the assessment order itself. (a) The Assessing officer while arriving at the deficit cash available for cash deposit at Rs. 81,78,572/- has committed a mistake in that the deficit balance of Rs. 2,24,355/- as on 30/11/2016 was taken twice as deficit balance as on 30/11/2016 and also while....
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....sum of Rs. 14,00,000/- in which Rs. 7,50,000/- was by cheque on 18/09/2016 and balance sum of Rs. 6,50,000/- was drawn by cash. The appellant herein attaches the capital account of the appellant in the books of the firm as evidence with withdrawals from the firm. The cash withdrawal of Rs. 6,50,000/- was available for cash deposited in the bank account. The assessing officer observed that detailed capital account of the appellant in firm was not submitted and only abstract was submitted and that the capital account filed there was no such credit shown. The appellant submits that withdrawals from the firm, only the partner's account would be debited and there cannot be any credit as presumed by the assessing officer. Since the cash withdrawn of Rs. 6,50,000/- from the firm is available for cash deposit, the assessing officer may be directed to allow credit for the said sum of Rs. 6,50,000/-. (iii) Amount provided by relatives- Rs. 50,42,676/- The appellant submits that during the year she has purchased agricultural lands of 2.81 acres for Rs. 1,00,85,352/- and the finance for the property was made by the appellant as well as her husband and the HUF of the husba....
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....ts that even if it is felt that the property belongs to the appellant alone even then the amount advanced for purchased of the property by the appellant's husband and the HUF cannot be denied. In fact they have given confirmation letters to the assessing in the remand proceedings - vide page 9 of the CIT(A) order. Thus the source for the cash deposited as received from the appellant's husband and the HUF has been established and therefore the same cannot be considered as unexplained cash deposit in the bank for making the addition u/s 69A. The appellant therefore prays that a sum of Rs. 50,42,676/- may be considered as explained cash deposit and the addition made may be deleted. The appellant therefore prays that addition to the extent of Rs. 61,49,031/- (Rs. 2,24,355+2,25,000+6,50,000+50,42,676) may be deleted as explained cash deposited and render justice." 10. In support of the above submissions, the ld.AR submitted a Paper Book of 23 Pages consisting of cash flow statement, bank statement, income tax return filed by the assessee's husband K.Subramanian and his HUF for the A.Y.2017-18 and the financials of partnership firm M/s. Sesha Sai Herbals as o....
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....ncome received from the tenant in cash every month has been offered as income in the return of income filed. However, the assessee has failed to submit any evidence like rent agreement in support of the advance received from the tenant before any of the authorities. Therefore, the claim of the assessee to consider the rental advance as source for cash deposit to the tune of Rs. 2,25,000/- cannot be considered and hence, we are inclined to reject the same by upholding the view taken by the AO and that of the ld. CIT(A). 12.2 The assessee has stated that she is a partner in the firm M/s.Sesha Sai Herbals and has drawn Rs. 14,00,000/- during the financial year 2016-17, of which Rs. 6,50,000/- has been drawn in cash. We note that the assessee has filed balance sheet and schedule of capital accounts as on 31.03.2017 of the said firm, wherein the assessee has withdrawn Rs. 14,00,000/- from her capital account during the year, out of which only Rs. 7,50,000/- has been drawn through bank account (on 18.05.2016 - Canara Bank A/c No. 8446201000156) and the balance Rs. 6,50,000/- has been drawn by cash. Therefore, we are convinced that the assessee has drawn Rs. 6,50,000/- by cash from the....