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TMI Blog2014 (11) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... s duly incurred by the appellant in earning arrangement with the firm, and as such should have been allowed as admissible deduction in the present case. 4. On facts , material and evidence on record and / or admitted and confirmed by the Bank, it is apparent that the cash deposits were made out of the cash withdrawn earlier and as such, the source of deposit was duly established." 2. Two issues are involved in the above grounds which are as under:- i) as to whether authorities below were justified in disallowing the claimed deduction of Rs. 11,59,309/- on account of business expenses on running, maintaining and on account of depreciation on motor car for earning the income from profession ? ; and ii) as to whether the authorities below are justified in making and sustaining the addition of Rs. 52,60,000/- for alleged unexplained cash deposits out of cash earlier withdrawn. Issue No. 1 3. The relevant facts are that during the year the assessee a qualified Chartered Accountant was a partner in two firms. In this year, the year the assessee had income from profession as partner's remuneration and also had capital gains and taxable interest income. The AO disallowed the claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenses incurred by partners on car running and maintenance , insurance , driver's salary etc. therefore the expenses incurred by the assessee being directly in relation to earning taxable business income, are clearly allowable as a business expenses. He pointed out that certificates from both the firms in support of this statement were furnished, a copy of which has also been made available before the Tribunal at page No. 20 to 21 of the paper book. The Ld. AR submitted further that during the year the assessee owned two cars. Out of these cars one car was exclusively used by him for his professional purposes and the other car was generally used for personal purposes and sometimes for professional purposes. The expenses claimed in the present case are only the expenses incurred on the car was used exclusively for professional purposes, submitted the Ld. AR . He also pointed out that this very issue was examined in the case of assessee itself for the assessment years 2006-07 and 2007-08, in the assessment framed u/s 143 (3) of the Act, wherein no such disallowance was made. In support the Ld. AR referred page Nos. 22 to 29 of the paper book which are the copies of those assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preposition of law that consistency in the approach of the revenue is to be maintained when there is no change of facts on the issue. 6. We have considered the submissions of the parties and have gone through the material placed before us. In support of his contention, the learned AR has relied upon the decisions of Hon'ble Supreme Court, Calcutta High Court, Bombay High Court and Patna High Court. Therefore, it would be proper to first see the ratio laid down in the cases relied upon by the learned AR. In the case of Ramniklal Kothari, the assessee was partner in the partnership firm. The assessee spent the amount for earning of share income from the firm which was disallowed by the lower authorities. When the matter reached to the Hon'ble Apex Court, it was held as under:- "Held, accordingly, that the respondent, who was a partner in four firms but did not carry on any independent business, was entitled to deduct from his share of the profits from the firms amounts paid as salary and bonus to staff, expenses for maintenance and depreciation of motor cars and traveling expenses expended by him in earning the income from the firms." In the case of S.B. Ghose, Hon'ble Calcutta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence in Janak Puri to Gurgaon on daily basis. Besides, the assessee is also required to go to the offices of the clients of the firm at various locations in Delhi and NCR region. Being the partner of the firm and for discharging his professional duties, the assessee is receiving share income as well as remuneration from the firm. Therefore, the expenditure on running and maintenance of the car was incurred by the assessee for the purpose of earning share income and remuneration from the firm. Accordingly, the ratio of the above decisions relied upon by the learned counsel would be squarely applicable to the extent that expenditure incurred by the assessee for earning of share income and remuneration is to be allowed against these income. But, in the case under appeal before us, the assessee has claimed the entire expenditure against the remuneration received from the firm and has not allocated any part of the expenditure against the share income from the firm. Obviously, it is done by the assessee because in the year under consideration, share income from the firm is exempt under Section 10(2A). That merely because in this year the share income is exempt, the ratio of the above d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he part of the AO that the chart of withdrawals / deposits furnished by the assessee does not explicitly indicate the purpose / use of money after withdrawal. The Ld. AR submitted that the explanation made before the AO has now been reiterated in the affidavit of the assessee made available on record. He submitted that it is trite established law that addition cannot be made by AO on the basis of mere doubt / suspicion. The reason for the cash withdrawal followed by depositing the money in his bank account was personally known to the assessee and the explanation was accordingly made before the AO. He submitted that the cash book furnished before the Ld. CIT(A) on which remand report of the AO was called for clearly shows that withdrawals and the deposits mentioned in annexure are all accounted for in the said cash book. It was further explained that the entries in annexure A are exclusive of house hold withdrawal and in support of this the assessee had enclosed statements in annexure B giving the details of house hold expenditure. The Ld. AR referred page Nos. 51 and 52 , 130 and 131, 135 and 136 and 41 and 42 of the paper book filed on behalf of the assessee. These are copies of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd failed to materialize he deposited back Rs. 52,60,000/- out of the aforesaid withdrawals of Rs. 54,65,000/-.There was period ranging from 123 days to 8 days for parking the money with assessee after withdrawal. Further explanation of the assessee remained that the withdrawals and the deposits mentioned are all accounted for in the cash book furnished before the Ld. CIT(A) which was subjected to remand report of the AO. It was also explained that the entries were exclusive of house hold withdrawals. We find that there was cash deposits in the bank account on 17.11.2009, 19.2.2010, 23.3.2010 and 25.3.2010 aggregating to Rs. 52,60,000/- which are clearly covered by earlier withdrawals of Rs. 54,65,000/-. Thus there is no reason to doubt the explanation of the assessee that the deposits were from the earlier withdrawals . The period of paring the money withdrawn ranging from 123 days to 8 days is also not so long to doubt the explanation of the assessee that the money was kept for the purchase of land for which dealing was going on but ultimately could not be materialized. It is prerogative of the assessee to keep the money with him or in his saving bank account and when the source ..... X X X X Extracts X X X X X X X X Extracts X X X X
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