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2016 (11) TMI 661 - ITAT AHMEDABAD

2016 (11) TMI 661 - ITAT AHMEDABAD - TMI - Unexplained cash deposited in the Bank - Intra-Bank Deposit - Held that:- As far as the third part, i.e., cash withdrawals from Over Draft Account in IDBI Bank and corresponding deposits in the Catholic Syrian Bank Ltd are concerned, the assessee has been able to demonstrate the nexus between the withdrawals and deposits. This evidence in the form of bank accounts cannot be rejected only on presumption that the assessee had already had cash balance and .....

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ss of the depositors. In view thereof, it is held that in respect of opening cash and small loans as mentioned above, the assessee failed to discharge its onus; consequently, the additions in respect of the same are upheld, whereas the addition in respect of Intra-Bank Deposit is deleted. - Decided partly in favour of assessee. - Deemed dividend u/s 2(22)(e) - Held that:- The nature of transactions reflected from the assessee’s account and company account demonstrates that it was a running c .....

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ia Kumar, Sr DR ORDER This appeal by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals)-6, Ahmedabad dated 01.02.2012 for Assessment Year 2008-09. 2. Various grounds are raised; however, the effective grounds are as under:- 1. That the learned CIT(A) has erred both in law and on the facts of the case in confirming an addition of ₹ 15,00,000/- being cash amount deposited in the Bank, holding it as unexplained. 2. That the learned CIT(A) has furthe .....

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ed basis, retained the addition of ₹ 15,00,000/-. Thus, impliedly the break-up of ₹ 15,00,000/- is as under:- i) Opening cash balance - ₹ 55,277/- ii) Small loans received - ₹ 1,07,174/- iii) Intra Bank deposits between The Catholic Syrian Bank Ltd & IDBI Bank - ₹ 13,37,549/- 4. Apropos the opening cash balance, it is contended by ld. Counsel for the assessee that the assessee was having sufficient cash balance at the beginning of the year. Apropos the loans fro .....

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OD A/c and corresponding deposits were made within short time in Catholic Syrian Bank Ltd account. The addition has been made on assumption that when the assessee was having cash in books, there was no necessity to withdraw the amount from Over-Draft (OD) Account. It is contended that this addition is based purely on such presumption, although the assessee by detailed bank statements from both bank accounts reconciled the withdrawals and deposits. Reference is made to the bank accounts placed a .....

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pany which was returned by company & vice versa as and when necessary. Thus, there was no element of loan or deposit in these transactions. They being purely need based current account transactions, there is no justification in deeming it to be deemed dividend and adding u/s 2(22)(e) of the Act. Reliance is placed on Hon ble Gujarat High Court judgment in the case of CIT vs. Schutz Dishman Bio-Tech (P) Ltd in Tax Appeal No. 958 & 959 of 2015, holding as under:- Even otherwise, if the tra .....

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ITO 1288 ITR 38 On.(Tri. Ahmedabad) M/s. Bombay Oil Industries Ltd, v. DCIT, Central Circle-35 Mumbai 128 SOT 383 (Mum.)" 4. It can thus be seen that the Commissioner as a matter of fact found that the payments were not in the nature of current adjustment. There was movement of fund both ways on need basis. The transactions in the nature of loans and advances are usually very few in number whereas in the present case, such transactions are in the form of current accommodation adjustment en .....

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rrently held that looking to large number of adjustment entries in the accounts between two entities, the amounts were not in the nature of loan or deposit, but merely adjustments, application of section 2(22)(e) of the Act would not arise. Consequently, no question of law arises. Tax appeals are dismissed. 6. Ld. DR, in reply, contends that the assessee s conduct from beginning has been evasive as no books of accounts were produced before the ld. AO and for the first time they were produced bef .....

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