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2016 (11) TMI 1300 - ITAT DELHI

2016 (11) TMI 1300 - ITAT DELHI - TMI - Addition on account of credits in the saving bank accounts - difference in denomination of notes - Held that:- In the present case, it is not in dispute that the assessee had withdrawn cash from the bank account and also re-deposited the similar amount in her bank account and since there was a gap in the withdrawal and the deposit in the bank account and even denominations of the notes were also different, however, nothing was brought on record to substant .....

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rought on record that the amount withdrawn by the assessee was utilized elsewhere and not redeposited in the bank account. - Decided in favour of assessee - ITA No. 3705/Del/2015 - Dated:- 12-9-2016 - SH. N.K. SAINI, ACCOUNTANT MEMBER For The Appellant : Sh. Pramod Kapur, CA For The Respondent : Ms. Anima Barnwal, Sr.DR ORDER This is an appeal by the assessee against the order dated 24.02.2015 of learned Commissioner of Income Tax (Appeals)- 12, New Delhi. 2. In this appeal, the assessee has rai .....

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on, the case was selected for scrutiny. During the course of assessment proceedings, the Assessing Officer asked the assessee about the cash deposits of ₹ 8,00,000/- each on 09.02.2010 and 26.02.2010 in ICICI Bank accounts. In response the assessee submitted as under: As regards cash deposited in the bank during the year it is submitted that the same has been deposited out of cash withdrawals made from the banks during the year itself for which day wise cash account is enclosed herewith e .....

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#8377; 1,50,000/- was withdrawn on 13.08.2009 and 27.08.2009 respectively. File the explanation along with evidence failing which decision will be taken as per provisions of the I.T. Act. 3.2 In response to the aforesaid query, the assessee submitted as under: "The assessee had to make balance payment of ₹ 12,00,000/- to Shri Bhupinder Aggarwal against the property purchase as per details given above for which a cheque dated 04.05.2009 was prepared to be given to him for sale deed to .....

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back into the bank after sometime. The assessee had withdrawn small amounts of ₹ 50,000/- and ₹ 1,50,000/- as per your query inspite of cash in hand it is submitted that the money which she had drawn for the buying of property she did not want to touch due to sentimental reasons and also the beliefs which generally the Indian ladies have that money drawn for a particular purpose should not be used for the other purpose as otherwise it may wither away and therefore they generally don& .....

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fied with the submissions of the assessee and made the additions of ₹ 16,00,000/- by observing in paras 3.3, 3.4, 3.10 and 3.11 of the assessment order dated 22.03.2013, which read as under: 3.3 From the above para, it is very much clear that amount of ₹ 15,00,000/- (Rs.9,00,000/- on 05.05.2009 and ₹ 6,00,000/- on 06.05.2009) was not touched at all and the same was deposited back in to the bank after some time. To verify the contention of the assessee details of cash withdrawal .....

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cash deposits are two independent transactions i.e. cash deposits has not been made out of cash withdrawals as stated by the assessee. Moreover, cash was withdrawn in the month of May and was deposited in the month of February which implies that cash was kept at home for almost 9 months. Since, assessee belongs to a business family, possibility of keeping the cash amounting to ₹ 15-16 lakhs at home for a period of more than 9 months is almost nil and same is ruled out. 3.10 While interpre .....

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of her income from the other sources not disclosed to the department and as such same is added to the income of the assessee as per provisions of section 68 of the I.T. Act. Penalty proceedings u/s 271(a)(c) of the I.T. Act are initiated separately for concealment/filing inaccurate particulars of income. 3.5 The Assessing Officer placed reliance on the following case laws: i. Commissioner of Income Tax Vs. Durga Prasad More (1971) 82 ITR (SC) ii. Seth Kale Khan Md. Hanif Vs. Commissioner of Inco .....

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from her savings bank account during the year under Assessment on various dates. Out of the said withdrawals cash was deposited back in her savings bank account. The total cash deposited was ₹ 16.00.000/- which was adequately covered by the withdrawals made by the assessee during the year. The assesses had deposited cash in her saving bank account with ICICI Bank amounting to ₹ 16.00.000/- . The said cash was deposited out of cash withdrawals made from the saving s bank account by th .....

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posit of cash. The assessment has been completed by the Ld.-AO. based on these details collected from the bank by drawing adverse inference that because there is some variation in the denomination of currency notes of cash withdrawn and cash deposited and therefore the cash deposited at a later date is not out of the cash withdrawn from the bank and held that the cash deposited by the assesses is out of her income from the other sources not disclosed to the department and thus added the amount o .....

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of cash in the bank. 3.7 The assessee also distinguished the case-laws relied by the Assessing Officer. It was also submitted that the daily cash book was maintained by the assessee, copy of which was furnished to the Assessing Officer during the course of assessment proceedings. It was stated that the cash withdrawn from the bank on different dates was duly entered and recorded as receipts in the cash book. Out of this cash in hand, certain cash was deposited at a later date, however, the Asses .....

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Appeals), however, did not find any merit in the submissions of the assessee and sustained the addition by observing as under: 8.1 In this case, information was received that the Assessee had made Cash deposits in the ICICI Bank Limited, being ₹ 8,00,000/- on 09.02.2010 and ₹ 8,00,000/- on 26.02.2010, amounting to a total of ₹ 16,00,000/- in the F.Y. 09-10 relevant to A.Y. 10-11. On being required to explain the source of Cash deposited in the bank account, it was claimed that .....

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demanded Cash. It has been further claimed that the cheque dated 04.05.09 for ₹ 12,00,000/- was encashed by that party on 09.05.09. 8.2 The Assessee has sought to claim that the amount was withdrawn to pay to Sh. Bhupinder Aggarwal in case he demanded Cash. There is no doubt that the Assessee had withdrawn this Cash, and also that the Assessee purchased a property from Sh. Bhupinder Aggarwal. A copy of the Purchase Deed of the property was examined as per which the Deed was presented on 06 .....

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9 and 06.05.09. 8.3 It is further noteworthy that if the Assessee claims that this amount was withdrawn to pay to the seller as a substitute of the cheque dated 04.05.09 of ₹ 12,00,000/-, then the amount withdrawn should have been ₹ 12,00,000/-. That the Assessee withdrew ₹ 15,00,000/- can have only two implications : A. The amount of ₹ 15,00,000/- was given to the Seller of the property as Undisclosed Premium on the property being given in Cash, over and above the disclo .....

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rightly pointed out that if the Assessee was actually having so much of Cash in hand, what was the purpose of withdrawing Cash amounting to ₹ 50,000/- and ₹ 1,50,000/- on 13.08.09 and 27.08.09 respectively. 8.6 Though the Assessee claims that "Cash was withdrawn and the same was deposited back into the bank after sometime". It is seen that the claimed "sometime" was a period as long as 9 months, the Assessee claiming that the Cash was withdrawn in May 2009 and tha .....

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amounts of Cash with her, which is clear from the fact that the amounts of ₹ 9,00,000/- and ₹ 6,00,000/- were withdrawn when required, shows that the Assessee was not of the habit of retaining large amount of Cash. If there was any merit in the claim of the Assessee that ₹ 15,00,000/- were withdrawn from the bank to give to Sh. Bhupinder Aggarwal as a substitute of cheque of ₹ 12,00,000/-, then not only the amount would have matched with the balance amount payable, but a .....

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s etc. If the money having been withdrawn on 05.05.09 and 06.05.09 for use on 06.05.09 had been deposited back on 06.05.09 or perhaps within a day or two, there could have been some probability in the claim of the Assessee. But the present claim clearly shows that the Assessee having utilized the amount of ₹ 15,00,000/- for Undisclosed purposes has deposited Undisclosed amount of ₹ 16,00,000/- in February 2010 8.7 It is seen that the Assessee has stated in the assessment proceedings .....

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awn for a particular purpose with cash required for another purpose. This happens because they are not engaged in any business activity and go by their own understanding and beliefs. The day to day cash account of the assessee has been furnished to you from which you can gauge that the assessee maintains the accounts to keep track of her financials otherwise. These transactions are duly reflected in that cash account. 8.8 As the Assessee made the above claim that the Assessee did not even touche .....

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000/-) consisted not only of ₹ 500/- denomination notes but also a very large number of Notes of denomination of ₹ 1,000/- and also Notes of denomination of ₹ 100/-. Further, the Cash deposit on 26.02.10 (Rs.8,00,000/-) was entirely of Notes of denomination of ₹ 1,000/- and ₹ 100/-. 8.9 From the above it is very clear that the Assessee is making false claims, as on one hand she claims that the notes were not even touched and that as per belief of the Assessee she ca .....

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February 2010. Hence this unaccounted income of ₹ 16,00,000/- has to be brought to tax, which has rightly been taxed by the Learned Assessing Officer. 3.8 Aggrieved from the order of learned Commissioner of Income Tax (Appeals), the assessee filed appeal before the ITAT. 4. Learned counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee maintained the cash book in which cash withdrawn from the bank was entered and the sa .....

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ated by the ITAT, Delhi Benches, New Delhi, in ITA No. 1416/Del/2013 & C.O. No. 102/Del/2013, in the case of Sh. Ganga Singh vide order dated 22nd October, 2014, copy of the said order was furnished, which is placed on record. Learned counsel for the assessee also placed reliance on the following orders: i. Income Tax Officer Vs. Mrs. Deepali Sehgal, ITA No. 5660/Del/2012, AY-2009-10; ii. Gordhan Vs. Income Tax Officer, ITA No. 811/Del/2015, AY 2011-12; iii. Mr. C. Vamsi Mohan Nandyal Vs. In .....

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ap was there in re-depositing the cash. It was further stated that the denomination of the notes withdrawn was different from the notes re-deposited in the bank account. Therefore, the addition was rightly made by the Assessing Officer and sustained by the learned Commissioner of Income Tax (Appeals). 6. I have considered the submissions of both the parties and carefully gone through the material available on record. In the present case, it is not in dispute that the assessee had withdrawn cash .....

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d the source of the deposit which was the withdrawal from her bank account. On a similar issue, a coordinate bench of ITAT, Delhi Benches, New Delhi, in the case of Deputy Commissioner of Income Tax Vs. Sh. Ganga Singh, ITA No. 1416/Del/2013 for assessment year 2009-10, observed in para 16 of the order dated 22nd October, 2014, as under: 16. On an analysis of the record, we find that Ld.AO has overlapped the facts. He assumed that the assessee had transferred agricultural land and must have rece .....

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