2022 (11) TMI 623 - AT - Income Tax
Unexplained cash u/s 69A - assessee submitted that cash was deposited out of loan and advances recovered in the current year which were given in the preceding year and out of cash withdrawal and also out of the profit earned from business during the year - HELD THAT:- As perused the cash book and other details in support of the recoveries of the loan shown by the assessee and find that the assessee after recovery of the loan has shown deposits in the bank account which was subsequently withdrawn and again the advance was made by the assessee to the same parties.
In many of the cases as perused the confirmation and find that the assessee after recovery of the loans and advances has again made the loans and advances in the short span of time. Therefore it is difficult to believe the version of the assessee that he has recovered loan & advances in cash and deposited the same in the bank and again given the loans and advances to the same parties after making withdrawal from the bank.
Indeed, the transaction shown by the assessee with respect to such loans and advances certainly seems to be abnormal but the same cannot be rejected until and unless it is cross verified from the concern parties. As such no addition can be made based on surmise and conjecture. Had there been any doubt about the credibility of the loan shown by the assessee, the onus was upon the revenue to disprove the contention of the assessee based on the relevant documentary evidence. Accordingly in the absence of any cross verification, we are not inclined to uphold the finding of the authorities below about the source of cash deposit.
With respect to the bank withdrawal, we note that the assessee has claimed to have withdrawn from the bank which is evident from the order of the authorities below. Admittedly, the advances were made by the assessee as on 31 March 2014, thus it is transpired that withdrawal from the bank was utilized for making such loans and advances to the extent of the amount discussed above. However there was some amount left out of the withdrawal from the bank amounting which probably has been utilized by the assessee for making the cash deposit in the bank.
Assessee has declared an income in the income tax return and therefore a presumption can be drawn that there was cash available with the assessee to the tune of such profit declared by the assessee in the income tax return which probably has also been utilized to some extent for making the deposits in the bank. Thus a cumulative reading of the above stated facts reveals that there was sufficient cash available with the assessee for making the deposits in cash in the bank. Accordingly we set aside the order of the learned CIT(A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is hereby allowed.