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2016 (9) TMI 1184 - ITAT MUMBAI

2016 (9) TMI 1184 - ITAT MUMBAI - TM - Unexplained source of the cash deposits - Held that:- The assessee has deposited cash in bank to the tune of ₹ 16,18,000/- for which the assessee has explained by way of cash flow statements , cash book , bank book/summary, bank statements etc. to justify the sources of the cash deposit which mainly is claimed by the assessee to have arisen from business receipts from dress designing business, receipt of interest income in cash from Manohar Ahuja and .....

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ed have not been verified by the authorities below. In our considered view and in the interest of justice and fair play, we set aside and restore this issue back to the file of the A.O. for verification , examination and enquiry of the claim of the assessee , in the light of the cash flow statement , summaries, cash book, bank statement and other relevant evidences which the assessee files to support her contentions in her defense with respect to the deposit of the cash in the bank , and also in .....

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- I .T.A. No.2412/Mum/2011 - Dated:- 17-8-2016 - SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Shri Satish Mody For The Revenue : Shri Aarsi Prasad ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee , being ITA No. 2412/Mum/2011, is directed against appellate order dated 14th January, 2011 passed by learned Commissioner of Income Tax (Appeals)- 30, Mumbai (hereinafter called the CIT(A) ), for the assessment year 2005-06 .....

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ing the disallowances made by the Learned Income Tax Officer of a) Society Charges 29292 b) Electricity Charges 6340 c) Telephone Charges 5000 TOTAL : 51699 The appellant is doing her business of dress designing from her residence and hence part of the expenses like society charges, electricity charges, telephone charges have been debited to the Profit & Loss A.O and are allowable as expenses against the business income and should be allowed. 2) The Learned Commissioner of Income Tax, (Appea .....

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essee is not pressing ground No. 1 and the same may be dismissed as not pressed . The ld. D.R. has also not raised any objection to the afore-stated submission of the assessee . We accordingly dismiss ground No. 1 as not pressed. 4. Regarding ground No. 2, the brief facts of the case are that the assessee is an individual and involved in the profession of dress designing. The assessee has shown total receipts from profession of ₹ 6,77,865/- and after deducting expenses , net profit from bu .....

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he Act, the A.O. observed from the date-wise bank summary as well as the bank statements maintained by the assessee during the year, that the assessee has deposited cash amounting to ₹ 16,18,000/- in her bank accounts of which the details are as under:- (a) Standard Chartered Bank (225-0-549348-5) 7,41,000/- (b) ABN Amro Bank 8,02,000/- (c) Standard Chartered Bank(225-1-064758-4) 75,000/- 16,18,000/- The assessee was asked by the AO to explain the source of these cash deposits in the bank .....

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the cash withdrawals shown by the assessee from the bank accounts were still not enough to cover the entire cash deposits. The assessee was asked to give details of receipts from her dress designing business shown in the Profit and Loss Account alongwith a list of all the parties with the name and address , dates and modes of receipts , bills raised in respect of such payments and relevant bank extracts and ledger extracts to support and evidence the same. In reply the assessee submitted that mo .....

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to deposit the same back to the bank account, the A.O. noted that the assessee had shown several cash withdrawals from her accounts as per the bank summary submitted by the assessee whereas the entries shown by the assessee as cash withdrawals in the bank summary were actually not cash withdrawals. The analysis of relevant entries were made by the AO as under:- SN Name of the Bank Date of withdrawal Amount Narration in bank statement 1 ABN Amro 07-09-2004 2,50,000 ABN Amro Equity Fund 2 ABN Amr .....

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15,000/- from the bank , while the rest of the five entries were not cash withdrawal from the bank account and the claim of the assessee is not correct was the observation of the AO. With respect to the assessee s claim that she had withdrawn an amount of ₹ 15,000/- from her bank account which has been deposited back in the bank accounts, it was observed by the AO that however, no evidence has been submitted by the assessee in this respect. Further, the assessee has shown withdrawals of &# .....

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see from her capital account. Hence, the amount of cash deposits in the bank accounts as mentioned above i.e. ₹ 16,18,000/- was added to the total income of the assessee as unexplained cash credits u/s 68 of the Act by the AO vide assessment order dated 18-12-2007 passed by the AO u/s 143(3) of the Act. 6. Aggrieved by the assessment order dated 18-12-2007 passed by the A.O. u/s 143(3) of the Act, the assessee filed first appeal before the learned CIT(A). 7. Before the ld. CIT(A), the asse .....

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ation by the AO while passing the assessment order dated 18- 12-2007 u/s 143(3) of the Act . The assessee submitted that certain inadvertent mistake crept in the bank summary furnished earlier and on account of these mistakes, as analyzed and highlighted in the assessment order, A.O. had come to the conclusion that cash withdrawals shown in the summary are bogus except ₹ 15000/-. The assessee submitted that it is a fact on record that the assessee is carrying on business of dress designing .....

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t received in cash ₹ 78,094 Opening cash ₹ 5,064 Total Rs.7,61,023 Expenses and withdrawals:- Telephone ₹ 8723/- Salary ₹ 78000/- Conveyance. ₹ 6498/- Misc. ₹ 2434/- Withdrawals ₹ 95320/- ₹ 1,90,975 Net surplus Rs.5,70,048 Based on the above, the assessee submitted that total cash available with the assessee was ₹ 12,11,048 (Rs.570048 + 641000) and cash deposited and expended was ₹ 1640500/- resulting in shortage of cash of ₹ 4,29 .....

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the ld. CIT(A) rejected the plea of the assessee on the ground that the assessee has not furnished complete details of all the parties with name and address from whom business receipts from dress designing business were received by the assessee , dates and modes of receipts, bills raised in respect of these receipts and relevant ledger/bank extracts were not submitted by the assessee as called for by the AO . The learned CIT(A) held that the AO has rightly rejected the claim of the assessee tha .....

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the appellate order dated 14.1.2011 passed by the ld. CIT(A) the assessee filed second appeal before the Tribunal. 9. The ld. Counsel for the assessee submitted that the assessee has received income from dress designing to the tune of ₹ 6,77,865/- which was received in cash and also there was receipt of interest of ₹ 78,094/- in cash from Mr Manohar Ahuja, out of which the net profit transferred to capital account was ₹ 209591.75. The profit and loss account of the assessee is .....

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laced on record and submitted that the assessee had further withdrawn an amount of ₹ 15,000/- in cash from Standard Chartered Bank on 02-11-2004 which was accepted by the AO as cash withdrawal . The assessee has also received interest to the tune of ₹ 78,094/- in cash from Mr. Manohar Ahuja which should also be considered while computing cash deposits in the bank and arriving at shortfall of cash in hand to arrive at income to be brought to tax on this count. The ld. Counsel submitte .....

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0. The ld. D.R. relied on the orders of the learned CIT(A) and submitted in alternative that verification is required with respect to the cash flow statement, bank statement etc. submitted by the assessee , hence the matter may be set aside the to the file of the A.O. for verification and de-novo determination of the issue on merits. 11. We have considered the rival contentions and also perused the material available on record. We have observed that the assessee has deposited cash in bank to the .....

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